The Importance of Prior Express Consent

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Whether or not your agents have prior express consent to contact consumers on their mobile devices could be the most important question you’re not asking.

It is not enough to assume, when collecting on third-party accounts, that simply because the client sent the consumer files to your agency, that you also have the consent of the consumer to contact him or her via prerecorded or autodialed collection calls to a cell phone.

And that brings us back to the importance of prior express consent. As it turns out, much depends on what kind of consent the original creditor obtained.

The Consumer Financial Protection Bureau expects there to be a system of checks and balances between creditors and their collection agencies. It is a system often referred to as vicarious liability, and means this: both sides of the collector/creditor equation are liable for the actions or omissions of the other party.

So, if the original creditor failed to obtain that aforementioned consent to contact the consumer on his or her cell phone, it is as if your agency personally failed to get that express consent, too.

When a consumer is in the position of applying for credit of some kind – and this can be anything from a credit card, to store credit, to healthcare costs – they will have to fill out a credit application. The consumer will provide details like name, date of birth, social security number, income. However, often, these applications are missing a key box for the consumer to acknowledge and fill out: a section that explicitly lays out what kind of communications the consumer can expect during the relationship between the creditor and the consumer.

Specifically: how and by whom that consumer can be contacted.

What collection agencies need to be effective – and what creditors should make sure they’re providing in order to keep agencies both productive and, most importantly, compliant – are credit applications that make it explicit that by completing and signing, the consumer is granting permission to both the original creditor and its business associates (i.e., collection agencies), to contact the consumer for business – collection – purposes.

Applications that emphasize permissions are good for consumers and collection agencies alike. Transparent language empowers consumers and protects collection agencies. The clearer the language is, the better protection it offers to all parties.

Express consent language can look like this:

CELLULAR PHONE CONTACT POLICY

By providing us with a telephone number for a cellular phone or other wireless device, you are expressly consenting to receiving communications – including but not limited to prerecorded or artificial voice message calls, text messages, and calls made by an automatic telephone dialing system – from us and our affiliates and agents at that number. This express consent applies to each such telephone number that you provide to us now or in the future and permits such calls regardless of their purpose. Calls and messages may incur access fees from your cellular provider.

Express consent was integral to the success of a collection agency in a recent lawsuit. The case, Mais v. Gulf Coast Collection Bureau, Inc. (768 F.3d 1110, 2014 U.S. App. LEXIS 18554). hinged entirely on this concept of prior express consent.

In Mais, the plaintiff went to an ER with his wife. She is the one who completed and executed an admission for him. The admission form disclosed that the hospital may use information or disclose it to its business partners for “purposes of . . . payment” and also acknowledged receipt of a privacy notice that similarly stated that the hospital may use or disclose information in order to “bill and collect payment.” The admission form also included a space for patients’ telephone numbers, which the plaintiff’s wife provided.

While the entire Mais case is beyond the scope of this article, of the most use and interest to readers should be the reiteration of the importance of language that makes it explicit – in writing – that by providing, for instance, a cell phone on a credit application, the consumer is additionally granting consent to be contacted via that number for business purposes. And, for the purposes of legal compliance, and because of vicarious liability, collection agencies function as an extension of a creditor’s business, and thus can also benefit from, and, in fact, is covered by, this prior express consent language.

As we stated at the beginning of this article, whether or not your agents have prior express consent to contact consumers on their mobile devices could be the most important question you’re not asking. For the sake of your agency – and your bottom line – it’s a question that you need to make a part of your conversation as you on-board any new client.

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Posted in Collection Laws & Regulations, Collection Laws and Regulations .

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