FAIR DEBT COLLECTION PRACTICES ACT (FDCPA)

VENDOR & FIELD REPS BEST PRACTICES:VENDOR & FIELD REPS BEST PRACTICES:

THE FAIR DEBT COLLECTION

PRACTICES ACT (FDCPA)

FDCPA History:

• Congress added the Fair Debt Collection Practices Act (FDCPA) to the Consumer Credit Protection Act in 1977 to promote fair treatment of consumers by prohibiting debt collectors from using abusive, deceptive y p g g , pand unfair business practices to collect a consumer’s debt.

• The FDCPA became effective in March 1978, and is codified in 15 USC The FDCPA became effective in March 1978, and is codified in 15 USC 1692 et seq.

• Be mindful that the FDCPA allows individual states to implement Be mindful that the FDCPA allows individual states to implement stricter laws and guidelines than those imposed by the FDCPA. Although many states adhere to the FDCPA at a state level, some states have adopted more restrictive requirements that must be followed during all field services.

FDCPA Purpose:

The primary purposes of the FDCPA are:

• To promote fair and ethical debt collection practices.T hibit d li i t b i d ti d f i d bt ll ti ti• To prohibit and eliminate abusive, deceptive, and unfair debt collection practices.

• To protect reputable debt collectors from unfair competition.• To promote consistent state action to protect consumers from abuses in debt

collection.collection.

Congress made it clear that in enacting the FDCPA it was responding to grave social concerns that were harming society stating that “[a]busive debt collection practices concerns that were harming society, stating that, [a]busive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.” (Section 801-802.)

FDCPA Enforcement:

The FDCPA is enforced through numerous avenues:

• Federal Trade Commission (FTC)

• Consumer Finance Protection Bureau (CFPB)

• State Attorney Generals

• Lawsuits

FDCPA Compliance:

You must comply with FDCPA prohibitions and restrictions.p y p

FDCPA compliance is not optional.

FDCPA compliance is legally mandatory and required!!!

The FDCPA Covers Consumer Debt:

The term “consumer” is defined as “any natural person obligated or allegedly obligated to pay any debt.” (section 803.)

The term “debt” is defined as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” (Section 803.)

Commercial debts (e.g. business debts) are not governed by the FDCPA.

Best Business Practice: Always side with caution, treat consumer debts and commercial debts the same during all field services. In other words, always follow the FDCPA.

Examples of Consumer Debts include:

• M t• Mortgages• Personal secured lines of credit• Credit card debts• Doctor and hospital bills• Auto loans• Student Loans• Rent• Cell phone bills• Insurance premiums

P l l• Personal loans• Most other forms of consumer debt

The list is not exhaustive because of the FDCPA applies to all consumer debts for:• Personal Purposes• Personal Purposes• Family Purposes• Household Purposes

Best Business Practice: Always follow the FDCPA. No exceptions!est us ess act ce: ays o o t e C . o e cept o s!

Who does the FDCPA apply to: YOU

Debt Collectors- a “debt collector” is defined by the FDCPA as follows:

1. “Any person”2. “Who uses any instrumentality of interstate commerce or the mails”- this includes using a telephone

ilor email.3. “In any business”4. “The principal purpose of which is the collection of debt.”5. “Or who regularly collects debts on behalf of another.”6. “Or who collects their own debts if they use another name indicating a third party is collecting the 6. Or who collects their own debts if they use another name indicating a third party is collecting the

debts.”

The FDCPA broadly defines a “debt collector” as any person or entity who regularly collects, or attemptsto collect, consumer debts for another person or institution. In other words, any entity engaging in the

ll i f d b i di l i i i h ll i f d b collection of any consumer debt, or indirectly assisting in the collection of any consumer debt, must comply with the FDCPA.

Who does the FDCPA apply to? You.

Best Business Practice: Always follow the FDCPA. No exceptions!

What does the FDCPA govern:

COMMUNICATIONS with a Consumer in connection with a Consumer Debt.

THIS INCLUDES EFFORTS TO RE-BRIDGE COMMUNICATION

BETWEEN THE CONSUMER AND THE CREDITOR IN CONNECTION WITH A

CONSUMER DEBT.

Wh t d th FDCPA ? All Fi ld Vi itWhat does the FDCPA govern? All Field Visits.

Best Business Practice: Always follow the FDCPA. No exceptions!

PROHIBITIONS OF THE FDCPA

Harassing or Abusive Practices (Section 806):

Never Never NeverNever, Never, Never…

• Use or threaten to use violence to physically harm a person, his or her reputation, or any property.

• Use obscene, profane, vulgar, abusive or other inappropriate language of which the natural consequence is to abuse the hearer or anyone nearby.

• Use publications to publish the Consumer’s name as a person who doesn’t pay bills or any other types of publication to harm the Consumerother types of publication to harm the Consumer.

• Advertise or list debt for sale to the public to induce payment or threaten to advertise or list debt for sell to the public to induce payment.

• Annoy, abuse, harass or oppress a Consumer by repeated or continuous unwanted communication (e.g. repeated and unwarranted field visits; calling repeatedly or cause a phone to ring, and ring, and ring).

B t B i P ti Al b f i l d tf l Best Business Practices: Always be professional and respectful. Always treat Consumers like you want to be treated.

False, Misleading, or Deceptive Representations (Section 807):

Never, Never, Never…

• Falsely represent the character, amount or legal status of the debt. Do not speak on the debt at all. Always kindly ask the Consumer to contact the Creditor.y y

• State or claim or imply to be a law enforcement agency, or use any badge, uniform or facsimile to claim or imply to be from or apart of a law enforcement agency.

• State or claim to imply to be a consumer reporting agency or credit bureau or use any badge • State or claim to imply to be a consumer reporting agency or credit bureau, or use any badge, uniform or facsimile to claim or imply to be from or apart of a consumer reporting agency or credit bureau.

• State or claim or imply to be vouched for, bonded by, affiliated with or connected to the United p y , y,States, any State or any local government, or use any badge, uniform or facsimile to claim orimply to be from or apart of the federal, state or local government.

• State or claim or imply to be an attorney or that any communication is from an attorney.

False, Misleading, or Deceptive Representations (Section 807) continued:

Never Never NeverNever, Never, Never…

• State or claim that legal action will be taken, or falsely represent or imply that documents are legal process of a lawsuit.

• State or claim or imply that nonpayment will result in arrest or imprisonment of any person, or the seizure, garnishment, attachment or sale of any person’s property.

• State or claim or imply that the Consumer has committed a crime or other conduct to scare or disgrace the consumeror disgrace the consumer.

• Communicate or threaten to report or furnish credit information to a consumer reporting agency.

• Communicate or threaten to communicate to any third-party about the existence of a debt.

• Communicate or threaten to communicate to any person or entity credit information that is known or should be known to be false, including not communicating disputed debts.

False, Misleading, or Deceptive Representations (Section 807) continued:

Never Never NeverNever, Never, Never…

• State or claim or imply that the sale, referral or transfer of the debt will cause the Consumer either to lose a claim, or a defense to a payment, or become subject to any practice prohibited by the FDCPA, or any other rights.

• Falsely represent or imply the account has been sold to innocent purchasers for value.

• Falsify and distribute false written communication to the Consumer.

• Consumer that look like legal documents, court documents, or government documents.

• Use any name other than the true name of the debt collector’s business, company or organization.g

• Use other false representations or deceptive means to collect or attempt to collect any debt or obtain information concerning a Consumer.

B t B i P ti Al ki dl k th C t t t th C ditBest Business Practice: Always kindly ask the Consumer to contact the Creditor.Do not speak on or about the debt.Do not lie about who you are.

Unfair Practices (Section 808):

Never, Never, Never…, ,

• Accept any payment from a Consumer! NCCI does not actually physically collect payment in any way, shape or form. Always kindly ask the Consumer to contact the Creditor.

• Accept a check postdated by more than five days unless notified between three and ten days in advance of when check will be deposited. Never accept payment. Always kindly ask the Consumer to contact the Creditor.

• Deposit a postdated check prior to the date on the check. Again, never accept payment. Always kindly ask the Consumer to contact the Creditor.

• State, claim or imply additional interest, fees, or charges not authorized in the original agreement or by state law will be charged to the Consumer Do not speak on or about the agreement or by state law will be charged to the Consumer. Do not speak on or about the debt.

• Solicit a postdated check for the purpose of threatening Consumer with criminal prosecution. Never accept payment. Always kindly ask the Consumer to contact the Creditor.

Unfair Practices (Section 808) continued:

Never Never NeverNever, Never, Never…

• Communicate with a Consumer in a form and method that causes any person to incur charges for communications be concealing the true purpose of the communication (for example, making collect callas or sending telegrams).g g

• Falsify or distribute postcards or flyers to communicate with a Consumer regarding a debt.

• Use words or symbols on the outside of an envelope that indicate you are in the debt collection business or trying to collect a debt All Contact Letters must be placed and provided in a sealed business or trying to collect a debt. All Contact Letters must be placed and provided in a sealed envelope, marked ‘Personal and Confidential’ with the Consumer’s name on the envelope.

Best Business Practices: • Do not speak on or about the debt• Do not speak on or about the debt.• Do not accept payment.• Always kindly ask the Consumer to contact the Creditor.• Always provide Contact Letters in a sealed envelope marked ‘Personal and

C fid ti l’ ith th C ’ th lConfidential’ with the Consumer’s name on the envelope.

Summary of Best Business Practices:

• Always be professional and respectful. Treat consumers like you want to be treated.

• Do not lie about who you are• Do not lie about who you are.

• Do not speak on or about the debt. Always kindly ask the Consumer to contact the Creditor.

• Do not accept payment. Always kindly ask the Consumer to contact the Creditor.

• Always provide Contact Letters in a sealed envelope marked ‘Personal and C fid i l’ ith th C ’ th lConfidential’ with the Consumer’s name on the envelope.

REQUIREMENTS OF THE FDCPA

When is Communication with a Consumer Permitted:

 A debt collector cannot contact a debtor during unusual times. (15 U.S.C. §1692c(a)(1).) Communication (including attempts to communicate) must occur between the hours of ( g p )

8 a.m. to 9 p.m. Further, if you are advised of inconvenient times to communicate with the

Consumer, do not contact them during those inconvenient times. Only conduct field

i b t th h f 8 t services between the hours of 8 a.m. to 9 p.m.

Best Business Practices: • End your day at 8:30 p.m. Be at the location by 8:30 p.m.• Be mindful of time changes (for example, geographic boundaries of time

difference, Daylight Savings).

Where is Communication with a Consumer Permitted:

A d bt ll t t t t d bt t l l d t t t th A debt collector cannot contact a debtor at an unusual place, and may not contact the debtor at his or her place of employment if the debt collector knows or has reason to believe the employer prohibits such communications. (15 U.S.C. §1692c(a)(1) and (3).)

CC d i ( ) i h C k NCCI does not permit any contact (or attempt to contact) with any Consumer at work or any place of employment concerning a consumer debt. During a field service to a place of residence, if a consumer states “do not contact me at work” or even remotely implies concern about being contacted at work, you must report it in the Field Report. Best Business Practices:

• Do not contact any consumer at work or place of employment. • Always tread lightly when contacting (and attempting to

contact) a Consumer at any location. ) y• Report any Consumer concerns of being contacted at work

in the Field Report.

What if a Consumer States He or She Wishes Communication to Cease:

A debt collector must cease all communication with a debtor if the debtor informs or A debt collector must cease all communication with a debtor if the debtor informs or advises that he or she wishes the debt collector to cease further communications. (15 U.S.C. §1692c(c).)

If a Consumer demands, states, advises, or requests you to stop contacting them, you must cease (meaning STOP) all communication. You must report it in the Field Report.

Examples:Examples:• “Don’t come back here.” • “Leave and don’t come back.” • “You are not welcome here again.” • “Stop trying to contact me.” • “Stop coming here.”

Best Business Practices:• Do not take offense• Do not take offense.• Always be professional and respectful. Treat Consumers like you want to be treated. • Report it in the Field Report.

What if the Consumer States He or She Has an Attorney:

If a debt collector knows that the debtor has retained an attorney to handle the debt, contact with the debtor must stop and all contact must be with that attorney, unless the attorney is unresponsive or agrees to allow direct communication with the debtor. (15 U.S.C. §1692c(a)(2).)

During a Field Service, if a Consumer informs, advises or makes you aware that he or she is represented by an attorney, you must cease (STOP) all communication with the Consumer. At most, you can ask for the name and telephone number of the attorney. You must report in the Field Report that the Consumer is represented by an attorney, and the attorney’s name and number if the Consumer provides the informationConsumer provides the information.

Best Business Practices: • Do not take offense. • Always be professional and respectfulAlways be professional and respectful.• Treat Consumers like you want to be treated. • Report it in the Field Report.

 

What if the Consumer States He or She is in Bankruptcy or Has Filed for Bankruptcy:

During a Field Service, if a Consumer informs, advises or makes you aware that he or she is in bankruptcy or has filed for bankruptcy, you must cease (STOP) all communication with th C i di t l Y t t it i th Fi ld R tthe Consumer immediately. You must report it in the Field Report.

Best Business Practices: k ff• Do not take offense.

• Always be professional and respectful. • Treat Consumers like you want to be treated. • Report it in the Field Report.

Summary of Best Business Practices:

• End your day at 8:30 p.m. Be at the location at 8:30 p.m. Be mindful of time changes (e.g. geographic boundaries of time difference, Daylight Savings).

• Always tread lightly when contacting a Consumer at any location. • Do not make any improper disclosures of the purpose of your effort to contact

the Consumer. • Do not take offense. Always be professional and respectful. Treat others like

you want to be treated.

Summary of Must Do’s to ensure compliance with the FDCPA:

• If a Consumer requests, states, advises, demands you to stop contacting them, you must stop all communication and you must report it in the Field Report.

• If a Consumer states do not contact me at work or even remotely implies concern about being If a Consumer states do not contact me at work or even remotely implies concern about being contacted at work, you must report it in the Field Report.

• If a Consumer states do not contact me at home or even remotely implies concern about being contacted at home you must report it in the Field Reportcontacted at home, you must report it in the Field Report.

• If a Consumer informs, advises or makes you aware that he or she is represented by an attorney, you must stop all communication and you must communication and you must report it in the Field Report.

• If a Consumer informs, advises or makes you aware that he or she is in bankruptcy or has filed for bankruptcy, you must stop all communication and you must communication and you must report it in the Field Report.

THIRD- PARTY CONTACT & COMMUNICATION

Who is a third-party:

Who is a third-party?

Any person except the Consumer.

hi h h h f h This means any person other than the name of the person you are attempting to make contact with.

Examples of Third-Parties:

E l f Thi d P i i l d (b li i d ) Examples of Third-Parties include (but are not limited to):

• Neighbors • Roommates • Children • Mailman • Dog walker • Gardener • Repairman p• Friends at the house • Relatives at the house • Any person other than the ConsumerAny person other than the Consumer

Best Practices – Third Parties:

• When speaking with the Consumer, be mindful and aware of your surroundings to ensure no one can overhear your conversation with the Consumer.

• In the event a third-party is within earshot (or even potentially within earshot), politely request the Consumer to speak in private If the Consumer is unwilling to speak in private simply hand the Consumer to speak in private. If the Consumer is unwilling to speak in private, simply hand the Consumer the Contact Letter on a ‘Personal and Confidential’ envelope, and kindly leave.

Example #1 : You make contact with a Consumer at the designated location, and the Consumer is having a party at the house. Politely ask the Consumer to speak outside in private. Once the Consumer steps outside and closes the door, you may proceed with the field service and ask the Consumer to contact the Creditor. If the Consumer is unwilling to speak in private, simply hand over the Contact Letter in a ‘Personal and Confidential’ envelope, and kindly leave. over the Contact Letter in a Personal and Confidential envelope, and kindly leave.

Example #2: You make contact with a Consumer at the designated location, and the Consumer is outside watering the lawn and a neighbor is walking his dog outside. Politely wait until the neighbor walks by and is far enough away to not be within earshot of you and the Consumer. Once the Consumer and you are not within earshot of the neighbor, you may proceed with the field service, ask the Consumer to contact the Creditor, hand the Consumer the Contact Letter in a ‘Personal and Confidential’ envelope , and kindly leave.

Example #3: You make contact with a Consumer at the designated location, and the Consumer is in the garage with another person fixing a car. Politely ask the Consumer to speak outside in private. Walk with the Consumer to an area outside of the house that is far enough for privacy, then proceed with the field service and ask the Consumer to contact the Creditor. If the Consumer is unwilling to speak in private, simply hand over the Contact Letter in a ‘Personal and Confidential’ envelope, andkindly leave.

Restrictions and Prohibitions of Third-Party Contact & Communications:

During a Field Service, if you make contact with a third-party:

• Never disclose or imply the reason of your effort to contact the Consumer. N di l i l th f ff t t t t th C• Never disclose or imply the purpose of your effort to contact the Consumer.

• Never disclose or imply the existence of a debt. • Never disclose or imply the Consumer owes a debt. • Never use an envelope that has language or symbols that indicate theNever use an envelope that has language or symbols that indicate the

communication relates to the collection of debt. • Never use postcards or flyers to communicate with a Consumer.

During any third-party contact, never under any circumstances discuss, mention, indicate, imply or even insinuate in any way, shape or form that the Consumer owes a debt or the existence of a debt!

Goal of Third-Party Communication is ONLY to:

If you make contact with a Third-Party, you can ONLY:

• Confirm Consumer Location InformationConfirm Consumer Location Information

• Acquire Location Information of Consumer

When confirming or acquiring location information, never under any circumstances discuss, mention, indicate, imply or even insinuate in any way, shape or form that the Consumer owes a debt or the existence of a debt!

Best Business Practice: Always be mindful, cautious, and careful of Consumer’s privacy.

(Treat others like you want to be treated.)

Identification to Third Party:

• If necessary when in contact with a third party, identify yourself by your name.

• Only identify your entity (“NCCI”) if and only if specifically asked by the third-party.Only identify your entity ( NCCI ) if and only if specifically asked by the third party.

• Never identify yourself as a debt collector or state you work for a debt collector.

• If a third-party asks “What is NCCI?” or “What is the purpose of this?”, be courteous and

simply state “This is a private matter.”

B B i P i K d ll hi d i iBest Business Practice: Keep any and all third-party communicationsshort, simple and sweet.

Third Party Contact-One time is enough!

When you communicate with a third-party to confirm or acquire location information, do not contact

the third party again.

Although the law allows a debt collector to contact a third party again if, and only if: (1) the third-

party requests to be contacted again or (2) debt collector has good faith reason to believe the party requests to be contacted again, or (2) debt collector has good faith reason to believe the

information is false, incomplete or erroneous, these two exceptions are very difficult to prove in a

court of law.

Best Business Practice: Once is enough!!!No repeat contact with any third party.

Professional Appearance is Key (Don’t Act or Look Like A Debt Collector !)

Do’s

• Business Casual Attire at all times. For example: Slacks

Khakis

Do Not’s

• Wear a uniform of any kind.

• Wear clothing (e g shirts hats socks) with insignias Khakis Work skirtsCollared ShirtsPolo Shirts Button up shirts/blouses

• Wear clothing (e.g. shirts, hats, socks) with insignias that indicate you are a debt collector or from a financial institution or in the financial services industry.

U li b d ith i i i b l th t • Appear and act professional at all times.

• Use NCCI Badge to demonstrate legitimate business purpose. “NCCI” not National Creditors Connection, Inc. appears on your badge to ensure that any third-party cannot and does not assume

• Use a clipboard with insignias or symbols that indicate you are a debt collector or from a financial institution or in the financial services industry.

• Use a car with a car sign that indicates you are a debt ll f f l hthat any third-party cannot and does not assume

you are attempting to collect a debt

• Use a vehicle without any insignias, symbols or signs.

collector or from a financial institution or in the financial services industry.

• Use business cards that indicate you are a debt collector or from a financial institution or in the financial services industry.

Golden Rules of Third Party Communication

Never, Never, Never…Absolutely, Positively NEVER under any circumstances discuss, mention, indicate, imply or even insinuate in any way, shape or form that the Consumer owes debt or the existence of a debt.

Only, Only, Only …Confirm and Acquire Consumer Location Information

Identify…Yourself by name, only provide the entity name (“NCCI”) if asked, and never state you are a debt collector or work for debt collector.

Once is enough…Once you make contact with a third-party, do not contact them again. No repeat contact with any third party.

Best Business Practices for Third-Party Communication

• Always be mindful, cautious, and careful of the Consumer’s privacy. (Treat Always be mindful, cautious, and careful of the Consumer s privacy. (Treat others like you want to be treated.)

• Keep any and all third-party communications short, simple and sweet.

Common Sense Practice Tips:

COMMON SENSE PRACTICE TIPS:

• Pay Attention to Work Orders (especially the specifics of do’s and do not’s)Pay Attention to Work Orders (especially the specifics of do s and do not s)

• Be Organized – Order Your Work

• Double Check (Triple Check) the Location Is CorrectDouble Check (Triple Check) the Location Is Correct

• Double Check (Triple Check) the Contact Letter is for the correct Consumer and Location

• Always De-Escalate and Walk Awayy y

THANK YOU!