Can Debt Collectors Communicate with Consumers Via Text Message?

According to recent research, 264 million smartphone users collectively look at their phones some 12 billion times a day.[1] Further, millennials (those born between 1980 and 1996[2]) prefer texting over email, phone and social media to communicate with businesses.[3] Despite America’s love of texting, many businesses, including those in the credit and collection industry, do not utilize any text platform to communicate with consumers. One reason for the hesitance is confusion concerning the legality of utilizing text messaging as a method of communication. This article will explore the utilization of text messaging in the context of debt collection.

Fair Debt Collection Practices Act (“FDCPA”)[4]:   The Fair Debt Collection Practices Act does not prohibit collectors from using text as a method of communication. Texts are still subject to the same general prohibitions as all communications subject to the Act. For example, deceptive “door opener” text messages, which use a false pretense to get a consumer to return the collector’s call, are impermissible. In the past, at the FTC’s request, federal courts in New York and Georgia halted three debt collection operations that allegedly used text messages to falsely threaten to arrest or sue consumers, unlawfully contact third parties, and failed to identify themselves as debt collectors as required by the law. According to the FTC, the companies sent texts to trick consumers into calling them back using statements such as, “YOUR PAYMENT DECLINED WITH CARD ***-****-***-5463. . . CALL 866-256-2117 IMMEDIATELY, even though the consumers had never attempted to make any payment.[5] Notably, these messages would be impermissible under the Act whether sent by text message, by telephone, or in writing as unlawful misleading communications.

Deception aside, providing the disclosures required by the Act can be a struggle in text message. §1692e(11) of the Act requires disclosure in the initial communication with a consumer that the debt collector is attempting to collect a debt and that any information obtained will be used for that purposes. Further, all subsequent communications must include the disclaimer is from a debt collector. But, that is not all. Under Section 1692g(a) of the Act, within five days after the initial communication (unless the information is contained in that initial communication or the consumer has paid the debt), the debt collector must send the consumer a written notice containing--- the amount of the debt, the name of the creditor to whom the debt is owed, and a further disclosure stating:

Unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector. If the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector. Upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

The first question is whether a text can satisfy the “written notice” requirement of §1692g. As of the date of this article, there has been no case to consider whether a collector may satisfy its §1692g “written notice” obligations by text message. From a logical perspective, a text message is certainly a notice made in writing. As a practical matter, however, it would be impossible to fit all of the required §1692e(11) and §1692g(a) information in a single text message to a consumer. This begs the question of whether several text messages, sent in unison or consecutively, constitute a single communication or multiple communications under the Act. While the case law does not answer this question, certainly under basic logic a compelling argument can be made to suggest that a group of messages sent in unison constitutes a single, as opposed to multiple, communication.

The timing of text transmission is important for another reason. Under §1692c(a)(1), debt collectors are prohibited from contacting consumers at any unusual time or place or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that a convenient time for communicating with a consumer is after 8:00am and before 9:00pm, local time at the consumer’s location. But, what does this mean for a text message, which may be sent at a particular time but read much later than the time of transmission. According to the CFPB, which is currently developing debt collection rules, “[b]ecause an email or text message is generally available for consumer’s receipt when the debt collector sends it, the time of sending will be the determining factor--- not, for example, when the consumer sees or opens it. Using the time the message is sent will also provide greater certainty to collectors in determining if they are communicating at a presumptively inconvenient time.”[6] Given this proposed rule, it is fairly safe to assume that text messages will be treated similarly to voicemails in that the time the communication is sent, not received, will be the relevant inquiry for purposes of §1692c(a)(1).

Uniform Deceptive Acts & Practices (“UDAP”):

State laws, many times known as UDAP laws, also regulate debt collection activity. Accordingly, while misleading texts are a problem under the FDCPA, they also may be a problem under relevant state law. For example, N.M. Stat. Ann. § 57-12-2(D) generally prohibits the false or misleading oral or written statements made in connection with the collection of debts. In Duke v. Garcia[7], a court found that an automobile finance company violated N.M. Stat. Ann. § 57-12-2(D) by sending a consumer false text messages designed to collect a deficient auto loan. In Duke, the finance company’s employee transmitted multiple text messages to the consumer stating a “warrant had been filed for her arrest and something akin to ‘I hope you enjoy jail.’” However, no warrant was ever filed for the consumer’s arrest.[8] In granting summary judgment against the finance company, the court found that the texts were actionable even though the consumer was not actually deceived by the messages as they tended to “deceive or mislead a reasonable person.”[9]

The Telephone Consumer Protection Act (“TCPA”): The TCPA restricts the use of automatic telephone dialing systems (“ATDS”), artificial or prerecorded voices, and unsolicited faxes.[10] The FCC is charged with implementing regulations and providing guidance on the TCPA’s provisions. As to wireless or cellular telephone numbers, the TCPA places a broad ban on the use of an ATDS to place calls without the prior express consent of the called party. Importantly, for purposes of this article, is the uniform understanding that a text message is a “call” within the meaning of the TCPA.[11] In short, debt collectors may not send text messages to consumers using an ATDS without prior express consent[12].

The definition of ATDS under the TCPA has been the subject of much debate. The TCPA defines an ATDS as equipment which has the capacity to: (1) store or produce telephone numbers to be called, using  a random or sequential number generator; and (2) to dial such numbers. In 2015, the FCC issued a Declaratory Ruling and Order which clarified the definition of an ATDS includes systems with the present or future ability to store and produce, and dial, random and sequentially generated numbers.[13] According to the FCC’s ruling, whether or not a dialing system’s capacity to function as an ATDS is actually utilized to make the call is irrelevant.

Notably, this definition was recently successfully challenged in the United States Court of Appeals for the District of Columbia Circuit. On March 16, 2018, the Circuit vacated the Commission’s definition of ATDS finding that the Commission’s “most recent effort [to define ATDS] f[ell] short of reasoned decisionmaking in offer[ing] no meaningful guidance to affected parties in material respects on whether their equipment is subject to the statute’s autodialer restrictions.”[14] At a minimum, the Circuit’s rejection of the FCC’s definition leaves open a new opportunity to argue a more limited definition of ATDS given the plain language of the statute. Nonetheless, debt collectors still need to be aware of the capabilities of texting platforms as some undoubtedly do meet the definition of an ATDS.[15]

If the software meets the definition of an ATDS, it does not necessarily follow that text messages are prohibited. Consent, which may be obtained orally or in writing, transforms an unlawful call into a lawful one. However, a collector must take care to ensure that it documents and retains records on consent as the burden to prove consent is on the collector.[16] Moreover, consent may be revoked by the consumer at any time through different channels.[17] Accordingly, the debt collector must implement a system for recording both consent and revocation thereof.

State Specific ATDS Laws:

Some states, like New York, have no specific regulations concerning the use of auto dialers. Others specifically limit their regulations to telemarketing efforts.[18] Additional state laws specifically allow dialing systems to be employed for debt collection efforts but may add certain disclosure, registration or consent requirements.[19] Most confusing are those state laws which fail to provide clarity on their application to debt collection activity.[20] At a minimum, collectors should contact their legal counsel to assess and determine whether the states in which they operate regulate, or prohibit, the use of their chosen text platform.







[4] 15 U.S.C. §1692 et seq.


[6] (P. 29)

[7] 2014 U.S. Dist. LEXIS 48047, *16 (D. N.M. 2014).

[8] Id. at *3.

[9] Id. at *16.

[10] See, 47 U.S.C. §227(b).

[11] Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 269, n.2 (3d Cir. 2013) (alteration in original) (quoting Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 953 (9th Cir. 2009)). See also In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd. 14014, 14115 (July 3, 2003).

[12] There is a limited exception for debts owed to or backed by the United States. See 47 U.S.C.A. § 227(b)(1)(B) (2012) as amended by Bipartisan Budget Act of 2015, Pub. L. § 301, 129 Stat 584, 588 (2015).


[14] ACA Int'l v. FCC, 885 F.3d 687, 701 (D.C. Cir. 2018) (internal citations omitted).

[15] Franklin v. Express Text, LLC, No. 17-2807, 2018 U.S. App. LEXIS 6102, at *2 (7th Cir. Mar. 12, 2018).

[16] Ruffrano v. HSBC Fin. Corp., No. 15CV958A, 2017 U.S. Dist. LEXIS 132674, at *45 (W.D.N.Y. Aug. 17, 2017).

[17] Legg v. Voice Media Group, Inc., 990 F. Supp. 2d 1351, 1354-55 (S.D. Fla. 2014) (finding that consumer's text message to "STOP ALL" was sufficient to plead revocation of consent); Munro v. King Broad. Co., No. C13-1308JLR, 2013 U.S. Dist. LEXIS 168308, 2013 WL 6185233, at *1, 3-4 (W.D. Wash. Nov. 26, 2013) (evidence of having texted "STOP" was sufficient to overcome the defendant's motion for summary judgment regarding revocation of consent)

[18] See, e.g., Thrasher-Lyon v. Ill. Farmers Ins. Co., 861 F. Supp. 2d 898, 2012 U.S. Dist. LEXIS 50560 (N.D. Ill. 2012) (Debt collector was entitled to dismissal of the claim against it under the Illinois Automatic Telephone Dialers Act, 815 ILCS 350/1 et seq., because nowhere in the complaint did the claimant allege that the messages she received were communications soliciting the sale of goods or services.); Md. Code Ann., Pub. Util. Co. § 8-204(c) (limiting restrictions to “sales or surveys”); Mich. Comp. Laws Ann. §§ 445.111- 445.111(a) (banning under any circumstances the use of recorded messages for a “home solicitation sale.”

[19] See, e.g., Iowa Code Ann. § 476.57(2)(b)(3) (allows auto dialer use for debt collection); Ky. Rev. Stat. Ann. § 367.461 (same); N.J. Stat. Ann. § 48:17-30 (same); N.C. Gen. Stat. § 75-104(a), (b)(3) (allows auto dialer use for debt collection but specifies that (a) no part of the call shall be used for telephone solicitation and (b) the person making the call must clearly identify the person’s name and contact information and the nature of the unsolicited telephone call); 16 Tex. Admin. Code § 26.125 (requires permit registration).

[20] Me. Rev. Stat. Ann. tit. 10 § 1498(1) (defining prohibited “solicitation calls” as those, the purpose of which is to “gather data or statistics or solicit information).