The Federal Trade Commission wants public comment on a proposed policy statement clarifying when the FTC will take action under the Fair Debt Collection Practices Act and the FTC Act against companies trying to collect the debts of deceased consumers.
In collecting these debts, the FDCPA generally allows collectors to contact only the decedent’s spouse, or the executor or administrator of the decedent’s estate.
State probate laws since the FDCPA was enacted in 1977 have expanded the types of individuals authorized to pay a decedent’s debts from assets in the decedent’s estate - beyond the categories expressly permitted under the FDCPA. In the proposed enforcement policy statement issued today for public comment, the FTC seeks to reconcile the law's requirements with state probate law developments.
The proposed policy statement provides guidance about what collectors must do to identify persons with whom they may communicate about paying the decedent’s debt without improperly revealing the debt to others. In addition, the statement emphasizes that, in communicating with someone who is authorized to pay the debts from assets of the decedent’s estate, collectors must avoid creating the misleading impression that the person is personally liable or could be required to pay using his own assets or assets held jointly with the decedent. The proposed statement notes that to avoid this misleading impression collectors may have to disclose that this is not the case.
The FTC, under the proposed statement, would not take legal action alleging that a collector violated the FDCPA by communicating about the decedent’s debts with the decedent’s spouse, the executor or administrator of the decedent’s estate or anyone else who is authorized to pay the debts from assets in the decedent’s estate.
The FTC is accepting public comments on the proposed policy statement until November 8. Comments should include the reference “Deceased Debt Collection Policy Statement.”
Collections & Credit Risk is interested in hearing from collection industry participants about this issue and the FTC's proposed statement. Contact Darren Waggoner, editor, at 815.463.9008 or by e-mail at: darren.waggoner@sourcemedia.com.
