AFSA Recaps Latest FTC Discussion about Consumer Rights Regarding Debt Collection

Clear direction about whether a repossession agency or lender can contact debtors through some of the latest technology methods such as cell phones or social media remains uncertain, according to the American Financial Services Association.

AFSA staff members recently attended a workshop hosted by the Federal Trade Commission on consumer protection related to debt collection and new technologies. With advancements in technology, AFSA pointed out that debt collectors are relying more on pre-recorded messages to contact consumers and are expanding communication to third parties, such as relatives, employers and neighbors about the primary borrower, which can cause problems for the consumer.

“Most of the new methods for debt collectors to communicate with consumers — e-mail, cell phones, and social media — are either not regulated or lack clarity in current regulations like the Telephone Consumer Protection Act and Fair Debt Collection Practices Act,” the association asserted.

“Several panelists said that the Consumer Financial Protection Bureau should take over governance of consumer protection regarding new technologies that debt collectors are using to approach consumers and gather loan data,” AFSA added.

Along with sharing the overall assessment of the workshop, the association ran down several points raised during each of the panel sessions. Here are some of the highlights:

Panel 1: Obtaining Information about Persons: Skip-Tracing and Beyond

AFSA recalled that workshop discussion pointed out that skip-tracing technology helps avoid the collection of incorrect data, but it has become easier to not contact consumers in-person and allows, in many cases, collectors to contact third parties other than the primary borrower, such as relatives, to find out information about the borrower.

“There should be a limit as to the resources that are available to contact the consumer. This could be done through personnel training. The Fair Debt Collection Practices Act addresses this issue, but it is important to scrub the data collected to be able to contact the right people,” association officials noted.

“With increased level of accuracy in place, the industry should stop using Social Security Numbers, balancing accuracy with mitigating the risk of ID theft,” they continued.

“FTC has privacy measures in place, but there needs to be clarification that skip-tracing firms must follow these safeguards. Also, there are no dispute mechanisms in place if the loan data is inaccurate,” they added.

Panel 2: Telephone Technologies: Dialing, Talking, and Texting, in an Age of Enhanced Mobility

AFSA mentioned the moderator for this session expressly clarified that the panel was not going to focus on the TCPA or FDCPA. The discussion intended to address consumer protection generally.

“Sometimes when a collection agency calls a consumer, the agency’s phone number is truncated and omits information such as the agent or debtor's name. This poses a problem for a consumer that was erroneously contacted and is not the debtor because of in an automated message they cannot get a hold of the agency,” association officials recollected.

“One of the panelists stated that an average debt collector makes 183 calls a day to consumers to collect a $200 debt,” they interjected.