Texting to Collect?

We work with both debtors and creditors, which makes the issue of texting to collect on past-due debts very interesting. A South African study showed that using cellphone SMS messaging in debt collection has driven response rates as much as 200% higher than what was achieved by letters and even summonses.

From the debtor’s perspective, a text reminds without feeling confrontational. Text messaging is immediate and personaly directed and debtors can respond via text. As one industry observer said, “They can say what they want, without problems that occasionally result from actual telephone dialog… People have been conditioned to respond negatively when they receive collections telephone calls.  Debtors don’t suffer embarassment or feel cornered by ‘The Call’.”

From the creditor’s perspective, text messaging works because cell phones have become almost “an extension of the person” and as such are always turned on and in close proximity to their owners. Using texting services gets around the strict guidelines for collections dialog and gets around the cultural and language misunderstandings of person-to-person contact.

Use caution when collecting

Just because technology exists to allow creditors to harass debtors by text doesn’t make it legal. Collection texts are governed by the Fair Debt Collection Practices Act and their state counterparts, using the same framework applicable to calls, in person visits, writings, and other collection efforts.  In a 2009 case, Hartung v. J.D. Byrider, Inc. a collections agent violated several sections of the Fair Debt Collection Practices Act and a total of $33,312.00 was awarded to the debtor (Hartung).

J.D. Byrider and CNAC allegedly assigned her debt to Defendant John Anderson for collection; Anderson allegedly contacted T-Mobile, misrepresented that he was Ms. Hartung’s father, and requested that he be added to a user on her T-Mobile account.  According to Hartung’s complaint, Anderson then used the information gained from T-Mobile to begin “unlawful and harassing collection attempts by frequently calling and text messaging Plaintiff.”  Hartung alleged that over the course of five days, Anderson contacted her seventeen times, by either text or call, by her cell phone.  These seventeen messages allegedly included a false statement that he was an attorney hired by CNAC, and a false statement that he would have Hartung arrested if she did not give him the car.  Even after Hartung contacted her local sheriff’s office and Anderson was ordered by the sheriff’s office to stop contacting Hartung, the contact continued, by text and voice mail.  The court specifically noted that Anderson had called Hartung’s employer, called her names, told her he had taken pictures of her, and made inappropriate sexual comments about her.

Whether you are in debt or need to collect, if you are unsure of your legal rights, contact a qualified legal counselor.