FTC Informal Staff Opinion: Bergstrom (11-17-95)

[David A. Szwak]

http://www.ftc.gov/os/statutes/fdcpa/le ... rgstrm.htm

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Division of Credit Practices
Bureau of Consumer Protection


November 17, 1995

Jeffrey R. Bergstrom Esq.
Bendelow and Darling, P.C.
The Chancery
1120 Lincoln St., Suite 1000
Denver, CO 80203

Dear Mr. Bergstrom:

This is in reply to your letter of August 30, 1995, concerning a service which your client, Interactive Information Services (IIS), proposes to sell to debt collection agencies. I apologize for any inconvenience caused by our delay in replying. The facts are as stated in your letter and I incorporate it by reference in this reply.

In order for a service provided by your client to violate the Fair Debt Collection Practices Act (Act), your client must be covered by the Act, ie., it must be a "debt collector" under Section 803(6). That Section defines a "debt collector" as someone who ". . . regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." (Emphasis added.) As part of IIS's service to debt collection agencies, it proposes to send a letter to alleged debtors. The purpose of the letter is two-fold: first, to promote a pre-paid long distance calling card offer by IIS and, second, to obtain alleged debtors' telephone numbers so that they can be contacted by the collection agencies in connection with the collection of debts allegedly owed by them to third parties. To the extent that the letter serves a collection function (albeit an indirect collection function), which we believe it does, it brings IIS within the coverage of the FDCPA.

Since IIS is covered by the Act, its collection communications must also comply with the Act. Among other things, this means that the letter referred to above must contain the following disclosures:

a) The letter must disclose that IIS is attempting to collect a debt and any information obtained will be used for that purpose, in accordance with Section 807(1l);

b) The letter (or a written communication sent within 5 days) must contain the information required by Section 809(a), including a statement of the consumer's right to dispute the debt under Section 809(b).
Without these disclosures, we think the letter would violate these sections. In addition, if the name "Nationwide Message Delivery Service" is not the true name of IIS's business, the letter would also violate Section 807(14), which requires that only the debt collector's "true" name be used.

Please note that this is only the opinion of Commission staff; as such, it does not bind the Commission itself. If you have further questions, please do not hesitate to contact me.

Sincerely,

John F. LeFevre