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If you read part 1 of this two-part blog series or listened to part 1 of our webinar “Email Is Hot, Texting Is Hotter: Don’t Be the First to Get Burned,” you might have found some of our comments surprising. Perhaps you left with more questions than you’d had going in. Or you wonder how in the world communicating compliantly via email and text—consistently, day in and day out—is even possible.
I understand completely. There’s no shortage of legal requirements and practical issues to wade through, and there’s a lot riding on your communication practices.
That’s why I’m here today with part 2. It’s based on my continuing discussion with David Kaminski, chair of the Consumer Financial Services Law Practice at Carlson & Messer LLP in Los Angeles. (Part 2 of the webinar is available here.)
Let’s dive straight into some of the webinar highlights.

Work Email Addresses and Mobile Numbers: Are They Safe to Use?

If a consumer provides you with a work email address or mobile number, you should tread carefully. These channels may not be fully under the consumer’s control. If the consumer ends his or her employment, he or she could miss important communications. If a current or previous employer monitors or accesses email or text messages, you run the risk of third-party disclosure.
Here’s what David and I recommend:
  • Always ask consumers for personal contact information. Your best bet, legally speaking, is to minimize the number of work accounts your organization uses for collection-related communications.
  • Get consumers to agree to notify you if their employment status changes. If your terms and conditions are detailed enough, and the consumer assumes responsibility for keeping you informed, you’ll have done your part to ensure the integrity of the collections process. This will afford a good measure of protection in the event of a legal claim.
“So if that consumer had given you consent . . . but now you’ve added in the additional wrinkle of the fact that the person has left the office. She’s no longer there, but they’re monitoring her email. They open the email, and therefore the company gets the . . . analytic results saying, ‘I sent my 1692g notice.’ [ . . . ] Did she receive the notice, or did she not?” – David Kaminski

Text Messages: Navigating Carrier Demands, Consumer Expectations, and the Law

The Cellular Telephone and Internet Association (CTIA) is a self-regulatory body that represents mobile service providers and other industry organizations. The CTIA has its own messaging principles and best practices, but they’re not legally binding. You can’t be sued for violating them.
Still, it’s important to comply with CTIA guidelines so you know your texting practices align with carrier and consumer expectations.
  • Use simple, straightforward language. Consumers must fully understand anything they’re signing up to receive. Opt-in mechanisms must be clear, and when consumers unsubscribe, they must receive an acknowledgement of the action.
  • Be careful with abbreviations. Acronyms can’t spell out inflammatory words (I’d call this one a no-brainer).
  • Terms and conditions are essential. By getting a consumer to agree to terms and conditions upfront, you can effectively nullify gaps and inconsistencies between CTIA and Fair Debt Collection Practices Act (FDCPA) requirements.

E-Sign: How It Applies, and How to Comply

A consumer’s E-Sign consent gives debt collectors permission to substitute electronic delivery for snail mail delivery of legally required written documents. You don’t need E-Sign consent to email or text a consumer everyday collection-related communications such as paid-in-full statements, responses to balance inquiries, payment receipts, etc.
However, you DO need to obtain a consumer’s E-Sign consent before you may deliver legally required written documents and disclosures to the consumer electronically. Examples of legally required written documents and disclosures include post-dated payment reminders, validation notices not provided in initial consumer communications, and copies of Reg E recurring electronic funds transfer authorizations.

FACT: Obtaining E-Sign consent is a two-step process.

First, you must inform the consumer of his or her rights. There are several ways to inform consumers of their E-Sign rights:
  • During a recorded conversation with the consumer;
  • In an email;
  • In a text message;
  • In a writing;
  • On a website.
Second, you must ask the consumer to demonstrate his or her ability to access the email address or use the mobile number he or she provided you for E-Sign purposes to receive legally required notices and disclosures.
The consumer can demonstrate his or her ability by: 1) sending you a text message or keyword using the mobile number they provided you for E-Sign; or 2) replying to an email or text message you sent to the email address or mobile number they provided you in connection with their E-Sign consent.
E-Sign consent takes effect only after the consumer has consented to using a particular channel (email or text) AND has demonstrated he or she can use that particular email address or mobile number.

FACT: An initial communication that includes the 1692g validation notice DOES NOT trigger the E-Sign requirement.

This is because there is no writing requirement in play for the initial communication. Section 1692g of the Fair Debt Collection Practices Act (FDCPA) makes clear you only need to “send” the consumer the validation notice [in writing] if you DID NOT provide it in the first communication (e.g., in the body of an email or verbally in a phone call) or if the consumer has already paid the debt.
Since E-Sign consent is required only for notices and disclosures that must be provided to the consumer in writing as a matter of law, it does not apply to the validation notice provided in the first communication.

FACT: A communication subsequent to the initial communication with the consumer DOES trigger the E-Sign requirement.

This is because the FDCPA imposes a writing requirement on a validation notice if it’s provided in a communication subsequent to the initial communication.
For example, if your first communication with the consumer was a text or phone call and you did not include the 1692g validation notice in that communication, you must send the consumer the validation notice within five days of that communication. In this context, the word “send” means by first class or certified mail with return receipt requested.
If you would prefer to email or text the written validation notice to the consumer, you may substitute the U.S. Postal Service mail delivery method with a digital delivery method if you first obtain the consumer’s E-Sign consent to do so.
Just remember: if you have an initial communication with the consumer that did not include the validation notice, you would be legally required to obtain E-Sign consent within the five-day window and electronically deliver the validation notice or link to the validation notice within the same five-day window.
If you fail to obtain the E-Sign consent, the validation notice is not opened, or the link to the validation notice in the email is not clicked within the five days of that initial communication, you must send the validation notice to the consumer using first class U.S Postal Service mail delivery.

TIP: To obtain proper E-Sign consent, provide detailed information and terms and ask for a response.

To obtain E-Sign consent properly, you’ll need to specify, among other things, the scope of consent (e.g., all active accounts now and in the future), the option to withdraw at any time, hardware and software requirements, whether any fees apply, instructions for obtaining paper disclosures, how to update contact information, and how to reach an agent.
When you send disclosures and terms, request a response (for example, “text YES”) so you can confirm the validity of the email address or mobile number and lock down the consumer’s formal consent.

TIP: Always confirm receipt of legally required documents.

There is no mailbox rule for electronic communications. Once you hit “send,” be sure to verify receipt via analytics. You can ask consumers to verify receipt themselves, but having indisputable proof on your end is essential legal protection for your business. Remember to verify open rates of emails as well as any links you use to provide information to the consumer.
“Revocation is that word that I think is so important in this whole context . . . . Anytime someone withdraws consent, whether you believe they did that in the proper manner . . . once that’s communicated, the best and safest course to minimize your risk is to honor that and comply with it.” – David Kaminski

Recommended Reading From Our Resource Library

Email and text may seem daunting, but you can move confidently to distinguish your service and strengthen your market position via consumer-friendly electronic communications. It’s easier than you think, especially with compliance-minded tech that streamlines collection operations while safeguarding your business by helping prevent noncompliant communications.

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Disclaimer: Ontario Systems is a technology company and provides this infographic solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2021 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

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Posted by Rozanne Andersen

Rozanne Andersen serves as Ontario Systems’ Vice President and Chief Compliance Officer. She is a licensed attorney and a 30+ year veteran and advocate of the banking, credit, and collection industry. She holds Chief Compliance Officer certifications from both ACA International and RMAI International. In 2020, Andersen received an international Compliance Officer of the Year award from Women in Compliance. Prior to joining Ontario Systems, Andersen served as former general counsel, director of government affairs, and CEO of ACA International. Since 2011, she has led Ontario Systems’ regulatory compliance efforts to ensure compliance solutions are embedded in the company’s software, contact management, payment processing, and cloud solutions. Ontario Systems is widely recognized as a leading software provider to the collection, healthcare, debt buyer and Federal, state, and local government markets.
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