State and Federal Collections Laws
There are also laws individual to each state as well as federal laws governing the collections industry. When it comes to the question of which law to follow, state or federal, the general rule is whichever is the stricter of the two.
States will also have unique requirements pertaining to debt collection within their sate. For example, Minnesota requires that individual debt collectors obtain a license to collect debts in their state. Other states might require the collection agency, not the individual collector, to obtain a license, or become bonded, to pursue bad debt in their jurisdiction. Massachusetts has laws governing the acceptance of payment by debt collectors unique to that state. Some states will not allow wage garnishment. Knowledge of state law will change a collectors approach when negotiating for payment of bad debt.