Under the Fair Debt Collection Practices Act (FDCPA), debt collectors are allowed to contact a debtor’s friends, relatives, or neighbors to obtain location and/or contact information. This is an important piece in the skip-tracing puzzle when attempting to find hard-to-reach consumers.
There are many very specific rules that come along with this privilege, however. First, if a debt collector has correct contact information on a debtor, he cannot contact third parties at all. Why, other than to disclose to a third party, would a collector contact a relative if there is already a correct phone number, for example?
Another important caveat is that debt collectors are allowed to contact a third party only once for the purpose of location information (unless that third party grants specific permission for the collector to call back, which almost never happens). This means that collectors and skip tracers need to have the best information possible before making their one call to a solid third party that will help locate a debtor (like a parent, for example).
With robust information processing technology available today, a single phone number can be revealed to be connected or disconnected, a cell number, originated in a time zone that would lead to call violations, or associated with a relative of a debtor. More than that, many solutions can give collectors the exact relationship of a relative to the debtor.
This is very important in an environment where more post-college-aged kids are living in their parents’ home. Even if there are only three people living in the house, there can be – at minimum – four phone numbers associated with a home-dwelling “boomeranger.” In practice, a home landline would be a right party contact number for the child. But the parents’ individual cellphone numbers would not be, and would be under the one contact rule.
The matter is complicated if the kid gave her own cell number as the primary contact on a credit application. Then, the home landline could be off limits (or it could be argued as such in court) because it is technically in the parents’ name.
Having the most information available for your one call to relatives is imperative to reducing call risk in the current litigation-happy collection environment. Third parties will always be a valuable resource for collectors and skip-tracers, but not worth fielding lawsuits over.
Rob Fite is the Vice President of Collection Solutions for LexisNexis® Risk Solutions, and brings with him nearly 20 years of experience in the fields of collections, credit, and risk management. At LexisNexis, Rob is responsible for leading LexisNexis collections market strategies, product development, business direction and revenue growth.
This article originally appeared in the latest issue of Know Your Debtor, a free quarterly newsletter focused on the U.S. consumer environment. Make sure you’re registered to receive insideARM’s newsletters on your User Profile page.