Debt Collection via Text Messages?

by Jeff Sovern

A company claims to make it possible.  But what about the FDCPA's required disclosures?  Some of them, like the validation message required under section 1692g, are only required within five days of the initial communication, and so can be sent in other ways, but under section 1692(e)(11), all communications must disclose that the communication is from a debt collector.  Given the character constraints in texting, that won't leave much room for dunning the consumer. I wonder how effective such texts will be.  Many billing plans charge the recipients of texts so I imagine consumers won't be happy not only to receive such texts but also to pay for them.  That also brings up section 1692f, which prohibits unfair practices, and in subsection (5) specifically bars:

Causing charges to be made to any person for communications by concealment of the true purpose of the communication.  Such charges include, but are not limited to, collect telephone calls and telegram fees. 

That doesn't sound so different from texts for which consumers are charged, and of course was written in an era before texts were invented (do we even have telegrams anymore?).  But would such texts conceal their true purpose, and if not, does that render that provision inapplicable?  (HT to Gina Calabrese). 

Comments

[Deepak]

The Federal Trade Commission's 2009 workshop report on debt collection concludes that "the law should incorporate a presumption that consumers will incur a charge for a call or text message made to their mobile phones. Thus, the law would generally prohibit debt collectors from contacting consumers via cell phones" absent "prior express consent" from the consumer.

http://www.ftc.gov/bcp/workshops/debtcollection/dcwr.pdf

[David Coleman]

This is a very interesting article. There is no such restriction on debt collection in Australia as this, except possibly that you could face penalties under the SPAM Act in Australia if you send an unsolicited electronic message like a text message. Perhaps this could be overcome with an option out option built into the text message service.