Since debt collection is a sensitive and highly regulated process, companies should be strategic to avoid any legal backlash. Various federal legislations have been introduced to help secure consumer rights and to help ensure ethical practices.
One way that companies can legally engage with debtors is through the 777 rule. While this is a widely recognized standard in the debt collection industry, some companies may not know how to leverage it.
What is the 777 rule?
The 777 rule governs how frequently companies can engage consumers to collect debt. The rule also stipulates the methods debt collectors can use when contacting debtors. The rule gets its name from a very specific stipulation. Companies aren’t legally allowed to call a consumer more than 7 times within 7 days. Additionally, companies are ethically required to wait 7 days before engaging a consumer again after a live conversation.
This guideline encourages collectors to prioritize quality over quantity in their interactions with consumers. It also empowers companies to foster meaningful communication instead of overwhelming the debtor with persistent contact. Essentially, the stipulation seeks to balance the collector’s need to recover debts with the debtor’s right to privacy and protection from harassment.
Debt collection agencies must adhere to this rule when attempting to recover debts on behalf of creditors. It applies to personal, family or household debts, such as:
- Credit card balances
- Medical bills
- Personal loans
Adhering to the 777 rule minimizes the risk of being accused of harassment, a violation that can result in significant legal trouble.
The 777 rule is a critical standard for companies engaged in debt collection that companies should familiarize themselves with and leverage. With proper legal support, companies can understand when and how the rule applies to their practices.