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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C.
20580
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Division of Credit Practices
Bureau of Consumer Protection
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August 19, 1992
Douglas M. Fisher
Solomon and Solomon, P.C.
Washington Square
Box 15019
Albany, New York 12212-5019
Dear Mr. Fisher:
This is in response to your request for a staff opinion regarding
the Fair Debt Collection Practices Act ("FDCPA"). I
apologize for the delay in responding.
The issue you raise may be summarized in the following manner.
Your firm performs collection activities for creditors. A consumer
indebted to the creditor dies and leaves no surviving spouse.
Because the consumer had very few assets, the consumer's relatives
choose not to probate the estate. They do, however, wish to pay
off the deceased consumer's debt to your client. One of the relatives
contacts your office and asks how much the consumer owes. The
question on which you would like a staff opinion is whether your
firm would violate the FDCPA if it revealed to the relative the
amount of the debt so that the relative can pay it off.
Section 805(b) of the FDCPA provides:
Except [for attempts to locate the consumer], without
the prior consent of the consumer given directly to the debt
collector, or the express permission of a court of competent
jurisdiction, or as reasonably necessary to effectuate a postjudgment
judicial remedy, a debt collector may not communicate, in connection
with the collection of any debt, with any person other than
the consumer, his attorney, a consumer reporting agency if otherwise
permitted by law, the creditor, the attorney of the creditor,
or the attorney of the debt collector.
Under the FDCPA, the term "communication" means "the
conveying of information regarding a debt directly or indirectly
to any person through any medium." For purposes of Section
805, the term "consumer" includes the consumer's spouse,
parent (if the consumer is a minor), guardian, executor, or administrator.
Although the statutory definition of "consumer" does
not specifically mention those relatives of a deceased consumer
who voluntarily seek to repay the consumer's debts, it is the
staff's opinion that, when the object of a contact is to repay,
such relatives are sufficiently similar to executors or administrators
to be included in the definition for that purpose. This is consistent
with the Commission's policy of encouraging prompt repayment of
debts and possesses none of the problems associated with the unauthorized
disclosure of their existence. The restriction imposed by Section
805(b) on communicating with third parties is intended to prevent
unscrupulous debt collectors from embarrassing consumers or tarnishing
their reputations by revealing their debts to friends, neighbors,
employers, and family members who do not already know of them.
In the scenario described above, however, the family member already
knows that a debt exists and is only seeking to discover the total
amount owed in order to repay it. The potential harm at which
Section 805(b) is aimed does not exist. We believe, therefore,
that a third party communication of the nature you describe is
permissible for purposes of repayment.
The views expressed herein represent an informal staff opinion.
As such, they are not binding on the Commission. They do, however,
reflect the staff's current enforcement position.
Sincerely,
Thomas E. Kane
Attorney
Division of Credit Practices
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