Collection Agency Liability Insurance

Collection Agents Liability Insurance is Errors & Omissions coverage for companies that recover past due debt. Collection Agencies are used by lenders or creditors and often they are hired after the creditor has made several failed attempts to collect. There are strict regulations that these companies must adhere to and can experience claims from negligence or accidental noncompliance. The Errors & Omissions coverage applies to both the defense and loss costs.

Defense for suits alleging failure to comply with the Consumer Protection Acts are the most common suits these specialist face. FDCPA lawsuits are rising every year. Even frivolous claims cost money to defend; thus, this coverage is vital to a Collection Agent’s business

Typical claims for Collections Agencies E&O are technical violations under the FDCPA or TCPA, such as:

• Failing to properly disclose that the caller is a debt collector
• Failing to properly disclose in writing that the insured is collecting a debt
• Calling a cell without consent or after consent is withdrawn
• Calling the wrong person on a cell – no consent
• Charging improper fees when accepting payment via CC (i.e., unlawful convenience fees)
• Contacting friends, family, co-workers of the debtor for more information
• Intimidation over the phone / aggressive call tactics after authorized hours or numerous times a day.