New Communication Technology May Pose Problems for Debt Collectors

June 25, 2009

Text messaging, mobile phones and social networking sites may be useful, but they present compliance issues.

Today, many debt collectors are looking for new and innovative means to communicate with consumers. The use of fax machines, automated dialing devices, voice mail, cellular phones, e-mail, the Internet, text messages and social networking sites are resources many debt collectors are seeking to use as means of communicating with consumers. While these technologies may seem like effective and efficient ways to lower the cost of communicating with consumers, they pose compliance questions for debt collectors as all communications, including those aided by technology, are subject to the Fair Debt Collections Practices Act (FDCPA).

Debt collectors often consider fax machines, e-mail and text messages to be cost effective ways to communicate with consumers. However, implementing these procedures without violating the FDCPA may be challenging. Using fax machines, e-mail or text messages to communicate with consumers creates a risk of third-party disclosure. Often a consumer's e-mail or portable electronic device is monitored or shared with other individuals, posing a significant risk of third-party disclosure. Similarly, when communicating with consumer via fax, collectors cannot be certain who will have access to the information they are sending and the risk of third-party disclosure is high.

Many times text messages only allow a certain number of characters to be transmitted. If FDCPA disclosures are deemed necessary, it may be very difficult for debt collectors to provide the necessary disclosures via text message.

Because the FDCPA and case law do not specifically address the use of e-mail, text messages or fax communications with consumers, there is little guidance as to how to comply with the FDCPA regarding the use of these forms of communication. However, due to the inherent risks regarding these forms of communication, debt collectors should obtain prior express consent from the consumer before engaging in communication via text message, fax or e-mail.

For more information on the regulations imposed by the FDCPA and communicating with consumers using technological advances, ACA members may view ACA's Technology & the FDCPA Fastfax document.