Last week's blog promised a follow-up this week about more specific information in the nature of debt collection communication. My blog from May 30th, 2018 [which can be accessed by clicking here] addressed debt collection in general. This week, I address restrictions on collection communication via email, phone and text.

To begin this discussion, let's assume that the installment lender or credit seller is communicating with the customer about a debt that is owed by the customer to the lender or seller—not a debt that is owed to a third party. If the debt is owed to another, then the Fair Debt Collection Practices Act probably applies.

So, the more modern and effective methods to communicate with your customer about collection (as opposed to soliciting new loans or services or telemarketing to your customers) include phone calls, texting and email. Of course, snail mail remains an option but hardly new. There are legal and regulatory restrictions associated with these more modern methods, which can be summarized as follows:

  • Original voice calls to the customer's cell phone: If an automated telephone dialing system (“ATDS”) is used, then prior express consent of the customer is required.
    • If not using an ATDS, then no consent is required.
  • Prerecorded/artificial voice calls to the customer's cell phone: prior express consent is required.
  • Text messaging to the customer: If using an ATDS, prior express consent is required.
    • If not using an ATDS, no consent is required.
  • Original voice calls to the customer's home phone: No consent is required.
  • Prerecorded/artificial voice calls to the customer's home phone: No consent is required.
  • Emailing the customer: No consent is required.

It is important to say that even though “consent” may not be required in some of the forms of communications by federal law, states may have enacted laws that require consent. So, it is important to review states' laws and regulations on the subject of consent. Further, it is always good practice to obtain the customer's consent to these various forms of communication anyway; and this is often best done at the start of the customer relationship.

Today's take-a-way:

Practice Pointer: Obtain your customer's prior express consent at the commencement of the customer relationship, to communicate via U.S. Mail, in-person solicitation,* email, text and telephone.

*more about in-person communication (field calling) coming up…