In California, debt collection companies do not have to register for a license nor are they subject to state financial regulators. In other states they do. As a result, there is nothing to prevent a debt collection company from setting up operations in California or in states with like arrangements and to engage in unscrupulous collection tactics without concern for any consequence from a governing agency or board. They are however, subject to the Fair Debt Collection Practices Act (FDCPA) and can be sued by the individual consumer who has been subject to their abuses. The consumer can also report them to the state Attorney General’s office, and with enough reports on file, action may be taken by the Attorney General’s office.

The individual consumer can stop an abusive debt collector dead in their tracks with an attorney well versed in the Fair Debt Collection Practices Act. If a collection agency has policy and practices across the boards that violate consumer rights under the FDCPA, and given the right circumstances, a California class action lawsuit can be brought against that company which can have the net effect of putting it out of business all together.

No one can stop these vicious, abusive debt collectors unless the abused consumer reports thes abuse to a consumer advocate who focuses on Fair Debt Collection Practices claims.

Once these abusive debt collection agencies have been forced to close their doors, they can open up again the very next day. This is basically true of any business that has been incorporated, or formed as a limited liability company. The same executives that operated a scandalous collection agency can turn around and form a new company and begin all over again. If they were required to be licensed, their history as collectors would no doubt come into play as the state was deciding whether or not to allow to them to open for new business.