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Wednesday, November 21, 2018

Collecting a Debt: Inconvenient Contact

QUESTION
We tried to collect a debt and our regulator notified us of a complaint for contacting the debtor at an “inconvenient” time. That is his word, not ours. This seems very arbitrary! We really do not know how to figure this out. What time is considered an inconvenient time?

ANSWER
The applicable regulations are much less arbitrary than you think! With respect to an inconvenient time, the consumer is required to provide prior consent or a court needs to authorize such contact, in the absence of which there is a clear mandate that a debt collector may not contact the consumer on any date, at any time, or in any place, if the debt collector knows or should know that such time, date or place is inconvenient.

What constitutes actually knowing the acceptable time, date or place to contact the debtor?

Courts will generally find such actual knowledge pertains if the consumer informs the debt collector, even casually or informally, that a particular time or place of contact is inconvenient. This is supported by the purpose of the Fair Debt Collection Practices Act (FDCPA), which has a primary goal of protecting unsophisticated consumers who are not expected to assert their rights. Moreover, courts will often impose a burden of reasonable injury on the debt collector to determine what times or places are inconvenient.

Please note, the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator. [15 USC § 1692c(d)]

The statutory language sets forth the timeframe for unusual and inconvenient hours: between 9:00PM and 8:00AM. [15 USC § 1692c(a)(1)]

It is worth noting that the Federal Trade Commission (FTC) takes the position that contacting the debtor on Sundays is not presumptively unusual or inconvenient.

However, contact with certain types of employees at their places of employment may be viewed by courts and the FTC as inherently inconvenient. For instance, it is prohibited to contact a nurse or a doctor working at a hospital, or a waiter at the restaurant where he or she works. Be cautious in this regard, since it is easy to fall into a grey area!

Contact with a consumer may be unusual or inconvenient for a variety of reasons other than those described herein, and, whatever the view, be especially careful to determine if the debt collector knows or should know that such a time, date or place is inconvenient.

Jonathan Foxx
Managing Director
Lenders Compliance Group