Contacting a debtor through the electronic medium is still a grey area. What if all family members share the email address then technically, collection agencies risk a violation. Emails, social media platforms, and SMS are the preferred mode of contact for the newer generation.
Although several collection agencies have been utilizing electronic mediums like emails, social media platforms, and SMS to contact debtors, in most cases they have taken the debtor’s consent.
- The ideal way is to take a (recorded) consent over the phone from the concerned debtor 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 is missed.
- Another way a collection agency can be authorized to contact debtors electronically is if their client has taken consent “in their own contract with the debtor” (for themself and any collection agency they hire to resolve the debt). This is called the Pass through consent. For example, your client may have this statement in their agreement with the debtor – You agree to allow us, our agents, and debt collectors to contact you by text, telephone and email.
The debt collection industry is constantly under the close lens of government regulators, surrounded by strict collection laws and several opportunist attorneys who are always looking for 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 surely issue more clarification around this in the future.
Therefore, collection agencies now insist that their clients (Original creditors) include a paragraph in their legal service agreement which permits the customers to be contacted (by original creditors or by 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.