Can my business collect unpaid debt from a consumer directly?

Yes, original creditors can collect directly from consumers, but they must comply with applicable consumer protection laws in their state.

Do I need to follow the FDCPA?

If you're not a third-party collector, the FDCPA may not apply directly, but many states require similar protections. It's best practice to follow FDCPA standards to stay compliant.

What should I include in a payment plan?

Include the total balance owed, number of installments, due dates, and both parties' signatures. Always provide a copy to the consumer.

Help Business Collect from Consumers – How Collection Agency Works

Help for Businesses Collecting from Consumers

If you run a business and a customer hasn’t paid you — you’re not alone. Whether you’re a dentist, gym, tutor, rental company, or home service provider, collecting past due accounts from individuals (consumers) comes with legal and ethical responsibilities.

⚖️ Understand the Legal Landscape

Even if you’re the original creditor, many states require you to follow similar standards to those set in the Fair Debt Collection Practices Act (FDCPA). If you use a third-party agency, the FDCPA always applies.

✔️ What You Can Legally Do

Send clear, polite reminders and final notices
Offer written payment agreements with clear terms
Document all communication
Refer the account to a licensed consumer debt collection agency

🚫 What You Shouldn’t Do

Call excessively or outside permitted hours (usually 8am–9pm)
Threaten legal action you don’t intend to take
Disclose the debt to third parties (like a spouse or employer)

🧰 Free Tools for B2C Collection

📄 Payment Reminder Template

Use this polite reminder to nudge your customer without escalating.

Subject: Friendly Payment Reminder

Dear [Customer Name],

We hope you’re well. We noticed that payment on invoice #[Invoice Number] totaling $[Amount] is past due. Please take a moment to process this payment or let us know if you need assistance.

If payment has already been made, please disregard this message.

Thank you,
[Your Business Name]

📑 Payment Agreement Template

Want to formalize a plan that helps the consumer repay over time?

PAYMENT AGREEMENT

I, [Customer Name], agree to repay the outstanding balance of $[Amount] to [Your Business Name].

The amount will be paid in [Number] installments of $[Installment Amount] beginning on [Start Date].

This agreement is binding and acknowledges the debt owed.

Signed: ________________________
Date: __________________________

⚠️ Final Notice Before Legal Action

A respectful yet firm last chance before you escalate or report the debt.

Subject: Final Notice Before Escalation

Dear [Customer Name],

Despite prior attempts to contact you, your balance of $[Amount] remains unpaid. This is a final notice before we consider further collection actions, including reporting to a licensed collection agency or pursuing legal avenues.

To avoid additional steps, please make payment by [Due Date].

Sincerely,
[Your Business Name]

📅 Timeline of Escalation

Week 1–2: Friendly reminder by email or letter
Week 3–4: Payment plan offer
Week 5+: Final notice (written)
Week 6+: Referral to consumer collection agency or small claims court

🧭 Not Sure What to Do?

If you’re unsure whether to write off the account, settle, or escalate, use our interactive Consumer Collection Tool to help evaluate next steps.

Need help with B2B accounts instead? See our commercial collection tools →