The FTC enforces Fair Debt Collection Practices Act (FDCPA), which prohibits the debt collector from using abusive language in their communication with consumers. This Act was designed to prohibit the use of abusive and deceptive language and eliminate the use of unfair debt collection practices. The Act covers personal, family, and household debt. The debt collectors are permitted to contact the borrower but under specific guidelines.
A debt collector has to send a written validation notice within the first five days of the initial communication. In the written notice, the collector is supposed to provide the consumer with specific details about the money owed and the name of the creditor to whom it is owed.
The communication must also state that unless the consumer files a dispute within 30 days after receipt of the communication and disputes the validity of the debt, it will be assumed valid by the debt collector.
1. Electronic Records & Signatures
The Consumer Financial Protection Bureau (CFPB) has also extended some amended resolutions in March of 2019 under the FDCPA with regards to debt collectors’ communication and disclosures. The CFPB also engaged in a discussion on how to interpret ESIGN, including a regulation that a consumer must consent to receive such disclosures in electronic form.
2. Dunning Letter & How Consumers Can Be Reached?
Our Ceo, Joe Chavarria, read a recent article on a “dunning letter,” which is a letter sent to the consumer to make the payment as soon as possible when the payment has gone past-due. The article talks about how communication should be made with debt collectors and refers to a Court case.
The court case was filed in California and the Seventh Circuit under the ESIGN act. The facts of the case were that the debt collector did not violate the FDCPA. There is a need for high-level communication with the consumer in the initial notice; however, the FDCPA does not prescribe how validation should be made. The Seventh Circuit, therefore, upheld the judgment in favor of the defendant (the debt collector). According to the judgment, the plaintiff lacked standing to pursue a claim.
Joe argues that the consumer went a little wrong in the framing of issues in the case. However, he feels it’s a good thing the matter was taken to court as it brought out a valuable opinion and a very valuable reach to FDCPA. The consumer, in his view, did have a point that the dunning letter is not supposed to ask for payment right away.
As per FDCPA guidelines, an initial letter to the consumer should be written under certain specific requirements. It should mention the exact amount of money owed, the name of the creditor to whom the amount is owed, and a statement saying that unless the consumer files a dispute within 30 days after receipt of the communication and disputes the validity of the debt, it will be assumed valid. The letter is not supposed to ask for payment right away. The legal issues in Joe’s view could have been framed better by the plaintiff with little advice.
The plaintiff argued that at first, she did not know what the debt was about because the letter was not mailed to her, and it was not properly delivered. But where the plaintiff went wrong is that she opened the email and read it. The advisors at our team could have certainly helped check if the email was legal or not. They may have even helped pin the core problem with the communication and identify the grounds on which it may be illegal.
3. Scan Email Communication for Possible Errors
If you ever receive any text messages or email communications from a debt collector, you should run it by our agents to ensure that the communications meet the legal requirements specified by CFPB under the FDCPA. We will ensure that it meets the legal standards and does not require any action.
As a consumer, you need to ensure whether or not it’s a dummy notice? You must also scan the communication for any possible don’ts. If the debt collector is making a reference about making payments, or the communication says that you should make a payment, then it is a violation of FDCPA. Ask yourself questions like, did the debt collector put the proper format into consideration? If you feel the debt collector is harassing you in any way or using profane language, then take screenshots of the communication and save and email it to our team for review, and we will be happy to advise you.