Email Collections Risk

Collections Training Resource
July 19, 2013 — 2,164 views  
Become a Bronze Member for monthly eNewsletter, articles, and white papers.

Debt collection is a vital part of the entire banking industry not only in the United States, but also all over the world. With the current economical environment not being the friendliest in recent memory, it is easy to understand why many lending financial corporations do not extend more trust to their customers than what is printed on the agreement. Email collection risks are something that many financial firms need to understand better in an effort to make sure that they stay on the right side of the law.

Violation of Fair Debt Collection Practice Act

It is important to understand that email collection risk extends to the fact that it is illegal according to the Fair Debt Collection Practice Act. This is because of the fact that constantly sending emails to defaulting customers leads to harassment and badger – something that falls under the harassment or abuse clauses in the Act. The Act also stipulates that debt collection agencies are not allowed to, in any way, use vulgar language or even threaten to use violence – in an effort to get the defaulting customer to pay the debt.

Because of the fact that a number of debt collection agencies are not aware of the various email collection risks that could affect them, there are a number of advisors that a firm could contact to understand the details more clearly.

Email Communication Must Comply with FDCPA

However, there are a certain guidelines that you should keep in mind when drafting an email to a defaulting customer to ensure that you stay on the legal side of any email collection risks that you may fall foul of. For instance, any financial institution sending out or corresponding with a customer about a debt should ensure that the electronic communication cannot be read by anyone else. This is essential as the law specifically states that before sending a customer an email detailing or disclosing the debt, consent to do so must be obtained. 

The use of email risk with collections stems from the fact that studies show as many as 75% of all Americans (roughly 204.3 million people) access the Internet from their own homes to conduct rather complex online services. The use of email helps businesses of all sizes to communicate with their client base and customers. Additionally, when it comes to receiving bad news – such as defaulting on payments – the fact that there is no confrontation involved through email makes people more open to receiving ‘past-due’ notices in their email inboxes.

Licensing Issues

Licensing issues tend to be a problem when dealing with customers that are not usually around their registered address for many months in a year. For instance, while you may have communicated with individuals through their email addresses, if they are residing temporarily outside your agency’s licensed area, there is not much you can do to collect the debt. There are a number of risks tied into communication through email with regards to collection of debt. It is important that you consult experts in your area to find out how you can stay safe from any email collection risks.

Collections Training Resource