FTC’s Guidance on Text Messaging for Debt Collectors

Recently, we highlighted a case in which a debt collector, whose text messages violated federal law (FDCPA, 15 U.S.C. 1692 et seq), agreed to settle Federal Trade Commission (FTC) charges. Even though the order is binding only on the defendant, it offers insight into the FTC’s expectations on the use of text messaging in debt collection.  Below is a summary of these expectations:

  1. Text messages must comply with the requirements of the FDCPA as they are considered communications under the FDCPA.
  2. Text messages and their disclosures must be legible on a consumer’s phone.
  3. The required disclosures should be displayed “clearly and prominently”, which means they must be presented in an understandable language; contain no contradictory language; their location, size and type must be noticeable for an ordinary consumer to read; and their print must be in contrast with the background on which it appears.
  4. Debt collectors must obtain “express consent” from the consumer prior to sending text messages, in which it must be clearly and prominently stated that the consumer may receive collection text messages in connection with the transaction which is the subject of the text message.  Consent must be obtained by the consumer’s signature or electronic signature.
  5. Text messages must disclose that they are being sent from debt collectors.
  6. The initial text message must disclose that the defendants are trying to collect a debt and that any information will be used for that purpose.

The FTC is very clear in its expectations on the use and content of text messaging in debt collection and even though the order is not binding on the whole industry, it is logical that these expectations will also apply to future charges brought by the FTC.