Pay Attention to Record Retention
State law may dictate how long collection documents and records must be maintained.
6/10/2019 9:30 AM
The business of debt collection involves a lot of information, which inevitably leads to questions about record maintenance and retention. While documentation may be critical to track the record and history of accounts, payments and communications, records in both paper and electronic format can become burdensome to manage and maintain as information accumulates over time. This begs the question: when is it safe for a debt collector to purge its account files?
The Fair Debt Collection Practices Act does not address how long certain documentation must be maintained, but several states have established record retention requirements for debt collection agencies that specify the storage method and time period for which certain collection records must be kept.
The requirements for retention vary from state to state, and typically range from two to six years. For instance:
- West Virginia requires licensees to maintain accounting records of collections and payments for six years from the date of last entry
- Rhode Island requires information to be maintained for a minimum of five years following the transaction
- Washington requires licensees to maintain accounting records of collections and payments for four years from the date of last entry
- Tennessee sets forth a shorter retention period and requires licensees to retain individual records of collections for a period of three years
Because state requirements may differ, collectors need to be aware of and comply with the document retention requirements for the states in which they collect. To assist in determining their compliance obligations, ACA members should review the ACA SearchPoint® document, State Record Maintenance Requirements, which was recently updated with new information and provides state retention laws and regulations.
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