Recording a telephone conversation is a State law question. States are broken down into two categories.
Some States are "One Party" States where the permission of both parties is not required.
One Party States: Alaska; Arkansas; Colorado; District of Columbia; Georgia; Hawaii; Idaho; Indiana; Iowa; Kansas; Kentucky; Louisiana; Maine; Minnesota; Mississippi; Missouri; Nebraska; Nevada; New Jersey; New Mexico; New York; North Carolina; North Dakota; Ohio; Oklahoma; Oregon; Rhode Island; South Carolina; South Dakota; Tennessee; Texas; Utah; Vermont; Virginia; West Virginia; Wisconsin and Wyoming
Some States Require the permission of both parties to the call.
Two Party (or ALL Party) States: California; Connecticut; Delaware; Florida; Illinois; Maryland; Massachusetts; Michigan; Montana; New Hampshire; Pennsylvania; and Washington.
Does it matter where I call from?
This means that if a call comes to you and the call originated in a one party State it can be recorded without announcing that to the other participant. If someone calls you from New York (a one party state) you may record the call without their knowledge.
The difficulty here is how can you know for sure if the call originated from a one party State? This is especially difficult for collection calls.
Why do I want to do this?
You are recording the call because you want to use the call later. Again, if the call originates from a one party State (you can ask the person "Where are you calling from?") then you can record and use later. However, if you are unsure, you will be able to use the recording if you state "I am recording your call and continuing with this call will constitute your consent to recording this communication" at the beginning of the call the recording can be used no matter where the call originated.
What should I avoid?
Remember too that you are being recorded also, so the value of the recording will affect it's value to you if you do not act responsibly.
How do I protect myself?
We often see this tactic used when people are going to file bankruptcy and they are trying to make a record of abusive collection tactics after the collection agency has been advised that the person has an attorney. When recording an incoming call state "This is to advise you that this call is being recorded" and you can continue to record the call and use that record as evidence in later proceeding for collection abuse.