Contacting a debtor through the electronic medium is still a grey area. What if all family members share the email address? Sharing collection details with another person could be taken as a violation. Even though Text messages, Emails, Social media platforms, App notifications, and SMS are the preferred mode of contact for the newer generation.
Several collection agencies have already started using electronic mediums like emails, Social media platforms, and SMS to contact debtors. In most cases, they have taken the debtor’s consent.
Getting notifications on the phone is really convenient and amicable for debtors, versus getting an annoying phone call from a debt collector, moreover, that may not be the best time to talk anyway.
- The ideal way is to take a (recorded) consent over the phone from the concerned debtor, confirming that contacting him/her through SMS or email is acceptable. These could be simple reminders when the agreed installment is due, or if a payment was missed.
- Another way a collection agency can be authorized to contact debtors electronically is if their client himself has taken consent in their initial contract with the debtor before this debt was forwarded for collections. This is called the Pass through consent.For example, your client may have this line in their agreement that was signed by the debtor – You agree to allow us, our agents, and debt collectors to contact you by text, telephone, and email mentioned in this agreement. This single statement in the client’s contract saves everyone time and improves collection rates.
The debt collection industry is constantly under the close lens of government regulators, surrounded by strict collection laws and several opportunist attorneys who always seek an excuse to sue collection agencies over the slightest fault.
The CFPB and FDCPA (federal debt collection laws) have not changed much for decades. The electronic contact rules are still evolving and FDCPA will indeed issue more clarification around this in the future.
Therefore, collection agencies now insist that their clients (Original creditors) include a line in their legal service agreement that permits the customers to be contacted (by original creditors or a collection agency) in case of a late payment/default. Any/all contact information provided can be used for contact, including their phone number, email, SMS, or social media.