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During this week’s Research Assistant Peer Group call, we had a great discussion about accepting payments from unauthorized third parties. It sparked a lot of interesting questions, one of which was, “Should we even take them at all?”
Most of us have encountered situations where a family member or friend wants to make a payment on a consumer’s account. The FDCPA doesn’t prohibit third-party payments. But it does say that we cannot disclose any information about the debt to anyone who isn’t authorized. In other words, we can accept the payment, but we must be very careful about how we do it, and the information we do (or don’t!) disclose.
Scenario 1: The Consumer Is on the Line
If the consumer says something like, “My mom gave me permission to use her credit card,” that’s not acceptable. The authorized cardholder must be on the phone. If mom isn’t available, kindly explain that you’ll need to speak with her directly and she’s welcome to call back. You will likely hear her repeat, “but she gave me permission”. You need permission directly from the cardholder.
Make sure you take this opportunity to get permission to speak to mom. Get her full name, relationship, and ask if you have permission to discuss all the details of this account with this third party going forward. Note your system of record and when mom calls you can talk to her about the account and take her payment. Make sure any “yes” or “no” answers are clearly stated, no vague responses, noises, or ambiguous words. Clarity is key.
Scenario 2: Third Party Calls Without Consumer Present
If mom calls in and wants to pay and the consumer is not nearby to ask for permission to discuss the account with mom, but mom knows the account number, you can accept the payment. However, you must not disclose any information the third party doesn’t already know. Don’t confirm account balances, client names, personal details, or demographics. Just process the payment if she has all the required information.
Once you have the mom on the phone:
- Remind mom that the call is being recorded.
- Ask her for her full name (as shown on her credit card).
- Ask for her address.
- Confirm they are an authorized user of the credit card.
- If you have prior permission to speak to mom, ask if she understands she is paying a debt owed by (daughter’s name or account number).
- If you do not have permission and daughter is not around to give permission, ask if she understands she is giving you a payment for (account # she supplied).
- Repeat the amount of the payment.
- Provide the confirmation number when the payment is processed.
Other options can include:
- NOT taking payments from third parties at all.
- Or you could direct third parties to your online payment portal, where they must enter specific information only the consumer would have. This protects both your agency and the consumer.
Playing Devil’s Advocate
One member raised an interesting point: What if a third party pays the debt without the consumer’s knowledge, especially during the validation period? Could this deny the consumer a fair opportunity to request validation or to dispute the debt?
For example, imagine a deployed service member who doesn’t receive the initial notice, and a well-meaning parent pays it. While this is a rare situation and no one in our group has experienced it, it’s not impossible. We live in unpredictable times.
Final Thoughts
Ultimately, it’s wise to conduct a risk assessment and determine your company’s position on this issue. Decide where your risk tolerance lies, document your reasoning, and develop a clear policy and procedure. Then, train your team, not just on what they can and cannot do, but why it matters and how to do it right.
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