QUESTION
Recently, we were cited by our regulator for not stopping our
communications in our debt collection efforts. Apparently, we violated a
regulation that requires us to stop such communications at a certain point. When
should we stop communicating with a borrower for debt collection purposes?
ANSWER
Under the Fair Debt Collection Practices Act (FDCPA), once a debt
collector receives written notice from a consumer that either the consumer
refuses to pay the debt or that the consumer wishes the debt collector to cease
further communication with the consumer, the debt collector must cease
communicating with the consumer with respect to such debt. [15 USC § 1692c(c)]
Note that the term “consumer” includes the consumer’s spouse, parent
(if the consumer is a minor), guardian, executor, or administrator. [15 USC §
1692c(d)]
Notification is effective upon receipt by the debt collector. Due to
the strict liability standard of the FDCPA, the debt collector will generally
be liable for any communication sent after the date of receipt, even if the
debt collector has no actual knowledge of the request.
Issues will arise under the applicable provision with respect to what
constitutes a valid written notice from the consumer, or whether a consumer’s
subsequent communication to the debt collector waives the prior request to
cease communication. One suggestion is to use the “least sophisticated
consumer” standard, as courts have used this standard in interpreting the
FDCPA; that is, courts will liberally interpret a notice to be valid and will
uphold a consumer’s rights despite communications that appear to waive the
request to cease communication.
Also note, issues may arise with respect to multiple debts owed by a
consumer. The Federal Trade Commission (FTC) has weighed in on this subject. According
to the FTC, a consumer who requests that communication be ceased with respect
to a previous debt, must repeat that request in connection with a subsequent
debt being collected by the same debt collector. [Atteberry, FTC Informal Staff
Letter, 12/30/77]
Jonathan Foxx
President & Managing Director
Lenders Compliance Group
