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Question: We are a large mortgage banker. Our concern involves our servicing unit trying to collect a debt and the prohibitions against communications with third parties in debt collection. We often are not sure about the guidelines for communicating with the consumer in such circumstances. Please let us know what prohibitions affect these kinds of communications?
Answer: The Fair Debt Collection Practices Act (FDCPA) sets forth certain guidelines for communicating with the consumer via a third party. The FDCPA is Title VIII of the Consumer Credit Protection Act, which also includes other federal statutes relating to consumer credit, such as the Truth in Lending Act (Title I), the Fair Credit Reporting Act (Title VI), and the Equal Credit Opportunity Act (Title VII).
Although there are a few exception cases, for the most part, in collecting any debt, a debt collector may not communicate with any person other than:
1. The consumer;
2. The consumer’s attorney;
3. A consumer reporting agency if otherwise permitted by law;
4. The creditor;
5. The creditor’s attorney; or
6. The debt collector’s attorney.
[15 USC § 1692c(a)-(d), inter alia; also see Federal Trade Commission Staff Commentary on the Fair Debt Collection Practices Act]
The debt collector may communicate with other persons, as follows:
1. With the consumer’s prior consent given directly to the debt collector;
2. With the express permission of a court of competent jurisdiction; or
3. As reasonably necessary to effectuate a post-judgment judicial remedy. [Idem]
Please note that “consumer” includes a consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator. [Idem]
Jonathan Foxx is president and managing director of Lenders Compliance Group, Brokers Compliance Group, Servicers Compliance Group and Vendors Compliance Group, national companies devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted by phone at (516) 442-3456, by e-mail at [email protected] or visit www.LendersComplianceGroup.com.