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Collection Agency

How to Ensure Your Collection Notices are Safe and Compliant

By Cornerstone SupportJune 8, 2016

Collection notices communicate important information to your customers about their debt. It’s a basic and standard tool in the credit and collection industry, but comes with a few challenges. It’s critical that collection agencies make sure they are communicating properly with consumers, and watch out for letters that may not be compliant with the Fair Debt Collection Practices Act.

A few issues to keep in mind when writing your collection notices:

  1. Vague letters
  2. Language that doesn’t apply to a consumer’s situation
  3. Language that may confuse a consumer
  4. Language on your first notice that may overshadow the validation notice
  5. Contradicting language to the FDCPA about the consumer’s rights to dispute

You should be using safe harbor language in your collection notices. This was established in a Seventh Circuit Court of Appeals decision – Miller v. McCalla, Ramer, Padrick, Cobb, Nichols and Clark – to assist debt collectors in complying with provisions in the FDCPA. The FDCPA requires that a collector state the amount of the debt in the initial communication (or within five days) with the consumer. It’s a good idea to just quote the text of the FDCPA verbatim.

Consider the physical details of your collection notice, such as if personal information is visible through a window envelope, as well as the language in it (including details about the statute of limitations of a debt).

“If the initial communication is a letter, what can sometimes cause problems for collectors is stating the exact amount of the debt under circumstances where the debt is accruing interest or other charges on a day-to-day-basis.” Nicole Strickler, a partner at Messer Stilp and Strickler Ltd

You may choose to have an attorney send written communications to consumers on your behalf for added assurance about compliance with state and federal laws, but it’s important for all parties to be on the same page in that instance. Be cautious – the context and placement of an attorney involvement disclaimer is very important on the letter.

Keep it simple! If a consumer asks for more details or resources, agencies can provide those in oral communications separate from initial letters or validation notices.

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Taylor Bishop
4 years ago

Thanks for the interesting article about collection notices. It’s good to know that there is terminology used for the notices. It sounds important to know what this harbor language is like especially to prevent any miscommunication.

Keith Montgomery
Keith Montgomery
Reply to  Taylor Bishop
4 years ago

Taylor, we are glad we can help. Please let us know if there is anything else we can do to help you.

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