Debt Collectors, by Law cannot…..
It’s a question that’s on a lot of people’s minds once they fall behind on their timeshare’s interest or annual maintenance fee payments. Fortunately, it’s also a topic that the Federal Trade Commission (FTC) covers in great detail in its recent business blog post, “Debt collectors: You may ‘like’ social media and texts, but are you complying with the law?”
Interestingly, the only form of contact that is expressly prohibited under the Fair Debt Collections Practices Act (FDCPA) is a postcard, which, by definition, “reveals the existence of a debt to anyone who sees it,” says writer Colin Hector. That leaves many open channels – including letters, phone calls, and, increasingly, digital avenues – for debt collectors. Each of these channels, however, is bound by the law and different compliance challenges.
Let’s break down some of the FTC’s most interesting points and look at just how debt collectors can – and cannot – legally contact you.
So what, according to the FDCPA, can’t debt collectors do? By law, debt collectors…
… CAN’T Be Deceptive
Per the FTC, it is illegal for debt collectors to use false pretenses to deceive consumers using social media or text messages. This deceit can come in a variety of forms: It is legally dubious, for example, for a debt collector to send a consumer (or a member of the consumer’s social network) a friend request on social media without disclosing their status as a debt collector.
Similarly, debt collectors are barred from using what Hector calls “door openers,” which are text messages “that used false pretenses to get consumers to call the collector back.” These can come in many forms – for example, a collector looking to get a speedy reply may be tempted to send phony fraud alert that looks like it was sent from the consumer’s credit card company.
… CAN’T Reveal The Existence of Debt to Third Parties
Just as the contents of a postcard are visible to anyone who picks the card up, so too are social media posts on Twitter, Facebook, or Tumblr visible to third parties, particularly friends and colleagues in the consumer’s social network.
Remember, according to the FTC, under Section 805(b) of the FDCPA, it’s illegal to reveal the existence of a debt to a third party. Section 806(3), meanwhile, bars publishing “a list of consumers who allegedly refuse to pay debts.” Thus, a debt collector attempting to contact you on social media may run afoul of the law.
On the other hand, regardless of the medium in which they attempt to contact you, debt collectors…
… MUST Only Impose Legal Charges
In order to be pursued, all of your debts must be legal, binding, and real. As the FTC puts it:
“The FDCPA prohibits debt collectors from collecting charges unless the charge is expressly authorized by the agreement creating the debt or permitted by law.”
… MUST Provide Appropriate Disclosure
Remember, according to the FTC, it is illegal for a debt collector to reach out to you under false pretenses. That is because of FDCPA Section 807(11), which states that initial and later communications between a collector and a consumer must disclose that it’s from a debt collector attempting to collect a debt, as well as the fact that any information obtained from contact will be used for the purpose of collecting debts.
And this does not stop being mandatory simply because it is hard to convey this information over a text. As the FTC blog puts it, “the disclosure provisions of the FDCPA apply regardless of how debt collectors choose to communicate with consumers,” a precedent recently illustrated by the FTC’s settlement with National Attorney Collection Services.
Want More Information?
For anyone looking for more guidance and background on fair debt collection practices – from a consumer’s or collector’s point of view – the FTC is a great resource. We encourage you to browse the entire text of the FDCPA here, or peruse the FTC’s consumer information and industry guidelines via their “Debt Collection” center here.
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.