Florida Commercial Collection Agency

Commercial debt collection is a significant aspect of business operations in Florida, helping businesses maintain liquidity and sustain cash flow. Florida’s laws governing commercial debt collection aim to protect the rights of both creditors and debtors, ensuring that collection practices are fair and effective.

As an award-winning commercial debt collection agency, Prestige Services, Inc., is expertly-skilled and experienced in debt collection efforts for businesses. In this article, you will learn the main laws regulating commercial debt collection in Florida and explore some best practices to optimize the collection process while remaining compliant with state regulations.

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What is Commercial Debt Collection?

Commercial debt collection involves the recovery of outstanding debts owed by one business to another (B2B). Unlike consumer debt collection, which involves individuals, commercial debt collection is focused on recovering funds from other businesses.

This process can range from friendly reminders and invoicing to formal litigation if the debtor fails to pay within a reasonable timeframe. Effective debt collection helps businesses avoid financial strain and maintain operational efficiency. However, commercial debt collection in Florida is regulated, and creditors must follow specific procedures to collect debts legally.

Florida Laws Governing B2B Debt Collection

Commercial debt collection in Florida is governed by various laws and statutes, most notably the Florida Consumer Collection Practices Act (FCCPA), the Uniform Commercial Code (UCC), Florida’s interest rates, and the statute of limitations. Understanding these laws is essential for Prestige Services, Inc., to successfully help businesses seeking recovery of outstanding debts legally and efficiently.

Florida Consumer Collection Practices Act (FCCPA)

One of the most important Florida government entities governs collection practices for both commercial and consumer and is called the Florida Consumer Collection Practices Act (FCCPA). This entity includes Florida Statutes Section 559.55–559.785, with portions impacting commercial debt collection by prohibiting abusive, deceptive, or unfair practices in debt recovery. This includes restrictions on the frequency and nature of communication with debtors, protecting businesses from harassment.

Under FCCPA, creditors and collection agencies must avoid using threats, profane language, or misleading information. Even in B2B collections, creditors should ensure that their actions do not violate FCCPA guidelines, as doing so can lead to legal penalties.

Learn more about FCCPA.

Uniform Commercial Code (UCC)

The Uniform Commercial Code (UCC) governs commercial transactions in the United States, including Florida. Article 9 of the UCC specifically addresses secured transactions, which play a crucial role in commercial debt collection when a creditor has a security interest in the debtor’s property. UCC filings create a legal claim on the debtor’s assets, allowing the creditor to recover funds through the sale of these assets if the debtor defaults.

In Florida, commercial creditors must ensure that they follow proper UCC procedures to secure their interests in assets legally. By filing a UCC-1 form, creditors can establish their legal claim over specific assets, which can be particularly beneficial in recovering funds from debtors with valuable business property.

Learn more about UCC.

Florida Statutes on Interest Rates & Fees

Interest rates in Florida are governed by Chapter 687 of the Florida Statutes. Commercial creditors should be aware of statutory limits on interest rates to avoid charging excessive or illegal interest on overdue accounts. Florida allows parties to agree on interest rates within contracts, but if no rate is specified, the default legal interest rate is applied. The default statutory interest rate in Florida changes periodically and is set by the Chief Financial Officer of the state.

In commercial debt collection, creditors are permitted to charge late fees and collection costs if the terms are included in the original contract. Transparent and detailed contracts are essential to ensure that all fees and interest rates are enforceable. While fees are common in business contracts, Prestige Services, Inc., institutes a “no collection, no fee” performance-based fee structure—we only charge contingency fees upon successful debt collection.

Florida Statute of Limitations on Debt Collection

The statute of limitations on commercial debt in Florida is five years for written contracts and four years for oral contracts. Creditors must be aware of this timeline, as any attempts to collect debts after this period could be legally contested by the debtor.

The statute of limitations begins on the date of the last payment or the date of default, whichever is later. It’s essential to act promptly and document all communication and payments to maintain the enforceability of the debt.

Florida Collection Best Practices

To enhance the effectiveness of debt recovery while remaining compliant with Florida law, businesses can implement several best practices for commercial debt collection.

1. Documentation & Record Keeping

Maintaining accurate records of all transactions, communications, and payments is crucial. Each account should include details on invoices, payment terms, communications with the debtor, and any follow-ups or reminders. If the debt eventually needs to be taken to court, this documentation will be essential evidence supporting the creditor’s case. Proper record-keeping also ensures that debt collection practices are transparent and can be audited if necessary.

2. Communication Protocols

Open, professional communication with debtors is essential to maintain positive business relationships. Regular, polite reminders about outstanding debts can often prompt payment without the need for aggressive collection actions. It’s advisable to maintain a structured communication protocol that respects FCCPA guidelines and ensures all interactions are documented. Written communications, whether email or letters, should be courteous, direct, and free from any language that could be perceived as harassment or coercion.

3. Compliance with State Laws

Compliance with Florida’s debt collection laws is crucial for businesses to avoid legal issues. Ensuring that collection practices align with the FCCPA, UCC, and Florida statutes is essential, especially when working with a collection agency. Familiarity with legal requirements—such as interest rates, acceptable fees, and statute of limitations—is necessary for effective and lawful debt recovery. Any deviation from these regulations could result in penalties, weakening the creditor’s position.

Effective Use of Attorneys & Collection Agencies

In some cases, partnering with a professional debt collection agency or an attorney can streamline the process and increase the likelihood of successful debt recovery. Collection agencies specializing in commercial debt understand the legal nuances and can pursue debts on behalf of the creditor. In fact, at Prestige Services, Inc., we provide in-house attorney “pre-litigation,” and attorney forwarding services for the consideration of a formal lawsuit.

Using legal professionals can also benefit creditors in cases involving large sums or complex contracts. Attorneys can assist with filing a UCC-1 form or represent the creditor in court, especially if the debtor refuses to pay. Although these services come with costs, they can be invaluable for businesses facing high-stakes debt recovery.

Check Laws by Cities in Florida

SUMMARY OF FLORIDA COLLECTION LAWS*

INTEREST RATE
Legal: 10% – Judgment 10% or contractual

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct: 4 – Written Contract 5 – Domestic Judgment 7 Renewable – Foreign Judgment Sit not recorded in-state

BAD CHECK LAWS (CIVIL PENALTY)
After 30 day demand-treble amount in addition to amount owed, bank & court costs & reasonable attorney fees.

GENERAL GARNISHMENT EXEMPTIONS
See federal law except 100% head of household. – Liberal Homestead Exemption – 1st $1,000 of automobile.

COLLECTION AGENCY BOND & LICENSE
Bond: Yes – $50,000 (Commercial) – License: Yes – Fee: Yes – $200 – Registration / $50 – Investigation $200 – Renewal

* These are not comprehensive statutes and therefore PSICollect.com and Prestige Services, Inc. disclaims any liability resulting from reliance by any party upon the legality and accuracy of the contents thereof.

Contact Prestige Services, Inc.

The use of professional debt collectors can benefit businesses by providing expertise in negotiation and settlement and reducing the likelihood of legal missteps that could result in penalties or damage to the business’s reputation.

As an award-winning commercial debt collection agency licensed in Florida, Prestige Services, Inc., offers a variety of exceptional debt collection services to help businesses get money that is owed to them.

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