New Study Finds Consumers Prefer Text Messaging; FDCPA Still Doesn't

First, there’s the headline: “A New Study May Finally Convince Collection Agencies To Stop Calling People.”

Referencing a study that examined the practices of two microlenders in the Philippines (“text messaging capital of the world” according to that study), the article’s thesis shows up at the end: “Maybe harassing collection calls could stop soon. Because texting is shown to be more reliable and cheaper than calling, it makes sense that banks would try it out.”

Uy. Do you guys want to take this, or should I? I guess since I’m already in front of the keyboard, I’ll take a crack.

The Fair Debt Collection Practices Act isn’t necessarily the clearest on things like text messaging. And creditors — for instance, in this case, mortgage lenders — aren’t always bound by the FDCPA. (As WebRecon’s Jack Gordon explains, “In some cases, creditors actually are bound by FDCPA. Not by the FDCPA, but by other statutes that impose FDCPA on them, like California’s Rosenthal Act.” Additionally, in some cases where they may not be legally bound, they voluntarily adhere to it as well. “This seems to be a growing trend,” Gordon suggested.)

So, while a mortgage or micro lender could use the technological ease of a friendly text message, this actually isn’t something third-party debt collectors could avail themselves of.

Which is too bad, because, as the article points out, text messaging is a less invasive, more constructive way to reach consumers. The consumer gets the contact without having to talk to a live person. Issues of guilt and shame that can be barriers to collection — we’d like to believe that our financial struggles are a private matter; text messaging helps preserve that polite fiction — are lessened when a text message is used.

It’s possible that new regulations from the Consumer Financial Protection Bureau may augment the FDCPA — but this is a guess. At some point, legislation regulating the collection industry is going to need to reconcile itself to things like technology and the Internet. Until then, though, collectors would do best to shy away from text messaging until a firm and legal answer shows up.