Arkansas Administrative Code Agency 031 - Collection Agencies, Arkansas State Board of
1. Overview of the Board
The Arkansas State Board of Collection Agencies regulates the debt collection industry in Arkansas. Its main goal is to protect consumers while ensuring that collection agencies operate legally and ethically.
The Board oversees:
Collection agencies (businesses that collect debts owed to others)
Credit services organizations (in some cases)
Individuals working as collection agents
The rules are codified under Agency 031 of the Arkansas Administrative Code.
2. Purpose of the Regulations
The regulations exist to:
Ensure collection agencies operate lawfully under Arkansas law.
Prevent fraud, harassment, or abusive practices toward debtors.
Set standards for licensing, reporting, and recordkeeping.
Establish penalties for violations of the law.
Promote professionalism in the debt collection industry.
3. Licensing Requirements
All collection agencies and their agents must be licensed by the Board to operate in Arkansas. The requirements include:
a) Agency License
A collection agency must:
Apply to the Board with all required forms.
Provide a surety bond (financial protection for consumers).
List the owners and officers of the agency.
Pay an initial licensing fee.
Provide proof of compliance with other state and federal laws.
Agencies must renew their license annually, providing updated information and paying the renewal fee.
b) Agent / Employee Requirements
Individuals who collect debts on behalf of a licensed agency may also need to be registered or certified.
Agents must have good moral character.
Must comply with training or education standards, if required by the Board.
4. Business Operations and Recordkeeping
Collection agencies must follow strict rules regarding how they conduct business:
Records
Maintain accurate records of:
Debts collected
Payments received
Communications with debtors
Records must typically be kept for a set number of years (e.g., 3–5 years).
Communication with Debtors
Agencies must avoid:
Harassment
Threats of violence
Misrepresentation of legal actions
Must provide accurate information about the debt and agency identity.
Fees and Practices
Agencies can only collect fees allowed by law.
Cannot charge illegal interest or fees beyond what the original creditor is entitled to.
5. Ethical Standards
The Board sets ethical standards to protect consumers:
Full disclosure of the agency’s identity when contacting debtors.
No misleading statements about debt amounts or consequences.
Fair treatment of all debtors, without discrimination.
Compliance with federal laws, such as:
Fair Debt Collection Practices Act (FDCPA)
Truth in Lending Act (for certain debts)
6. Disciplinary Actions
If a collection agency or agent violates Arkansas law or Agency 031 rules, the Board can:
Revoke or suspend licenses
Issue fines or penalties
Require corrective actions or audits
In severe cases, pursue legal action for violations
Complaints can be filed by:
Consumers
Competitors
Government agencies
7. Fees and Renewal
License fees are set by the Board and must be paid for:
Initial registration
Annual renewal
Duplicate licenses or updates
Renewal requires:
Proof of compliance with laws
Updated ownership or contact information
Payment of renewal fee
8. Key Takeaways
The Arkansas Administrative Code Agency 031 is essentially a regulatory framework to ensure:
Only licensed, qualified, and ethical agencies operate in Arkansas.
Consumers are protected from abusive or deceptive practices.
Agencies maintain proper records, transparency, and financial responsibility.
Violations are monitored and punished to maintain industry integrity.
RELATED Blog
comments