Collector - June 2015

Communicating with someone other than the consumer in an attempt to collect a debt can be permissible, but it can also be tricky.

The Fair Debt Collection Practices Act restricts the parties that a debt collector can speak to regarding a consumer’s debt—expressly permitting communications with certain third parties and prohibiting communications with others.

Adding another layer of complexity to the issue, some states have laws that are more restrictive than the FDCPA concerning communications with third parties. These elements can make compliance with the law difficult at times. In fact, one of the larger areas of complaints to the Consumer Financial Protection Bureau concerns improper third-party disclosures.

Understanding permissible and impermissible communications with third parties can help collectors remain in compliance with all state and federal laws.

Permitted Communications

The FDCPA allows debt collectors to
speak with particular third parties under
certain circumstances, including:
• The consumer’s spouse.

• The consumer’s parents (if the consumer is a minor).

• The creditor to whom the debt is originally owed.

• The attorney of the consumer, creditor or debt collector.

• A consumer reporting agency (if otherwise permitted by law).

• The consumer’s guardian, executor and administrator (including other individuals authorized to pay debts from assets of the decedent’s estate).

• The co-debtor, or other person legally obligated to pay the debt.

Consumer Consent or Court Order

A collector can also receive permission from a consumer or express permission from a court to speak with third parties about a consumer’s debt.

In the case of receiving prior consent from the consumer, the collector may want to get it in writing or make a recording of the authorization if it is given over the phone. A court can also authorize a debt collector to speak with a third party about a consumer’s debt.

Additionally, a debt collector may
contact third parties as needed to carry
out a post-judicial remedy,
such as a judgment.

Obtaining Location
Information

Debt collectors can contact third parties without a court order or consumer permission to obtain location information about a consumer. This is commonly known as skiptracing.

Communication Challenges

Federal and state laws have specific requirements for communicating with third parties

When skiptracing, collectors have a limited amount of information they can request from a third party. Collectors can only ask for the consumer’s home address, home telephone number and place of employment.

Collectors cannot ask for a better number to reach the consumer at, as this may not fall under the allowable information listed above.

The FDCPA permits a collector to contact a consumer’s place of employment when trying to obtain location information. However, special care should be taken in this instance not to reveal the consumer’s debt.

The request for location information can be made via a phone call or a written communication. When sending a written communication, collectors should not convey that they are a third-party debt collection company. So, for example, written communications should be sent on generic letterhead that does not disclose the name of the collection agency.

It’s also important to keep in mind
that contacting the consumer’s employer
for any reason other than skiptracing is
prohibited, unless:
• The consumer directly gives the debt
collector prior consent;

• The collector has express permission
of a court of competent jurisdiction or
• Contact is reasonably necessary to
effectuate a post-judgment remedy.