Why Everyone Needs a Refresher on False, Deceptive or Misleading Representations or Means

If you have ever come across a sign or a set of instructions that you think are just completely obvious — like the post of a giant hot dog at IKEA with an asterisk that says “not actual size” — those kinds of statements are usually not there accidentally. They are there because enough people did something or said something that led to the sign needing to be placed there to keep that behavior from happening again. The same is true for debt collectors. When it was enacted in the late 1970s, the Fair Debt Collection Practices Act laid out a number of behaviors that collectors were specifically prevented from engaging in — they can be summed up as lying. When it issued its debt collection rule, Regulation F, the Consumer Financial Protection Bureau opted to keep most of those prohibitions in. In the latest episode of “You Wanted a Rule, You Got a Rule,” John Bedard of Bedard Law Group walks through those prohibitions. And while many of them may be very familiar to participants in the debt collection industry, it can be helpful to review the prohibitions, because these are the types of behaviors that regulators will aggressively seek to stop.

When it was written, the Fair Debt Collection Practices Act laid out a number of things that collectors are not allowed to do. In order to maintain consistency, and because there are still collectors today doing those things they are not allowed to do, the CFPB kept many of the original provisions from the FDCPA in its debt collection rule. That includes ensuring that collectors do not use false, deceptive, or misleading representations when attempting to collect on debts. In this episode, John Bedard walks through all of the things that collectors need to learn to make sure they do not run afoul of the law in this important area.

Sometimes, being clever can get you into trouble. That is also true of collectors, Bedard notes. One of the prohibitions in this section of the rule, for example, is misrepresenting that a company is part of the government, which could make consumers think a debt is more serious.

“Companies that have a company logo that looks very much like a government seal or, you know, an agency seal or something like that could get folks in trouble,” Bedard says in this episode. “You know, I also see some some clever company names like International Recovery Services so that when they answer the phone, they answer it as, ‘IRS. Can I help you?’ Representations or behavior that mislead the consumer about who you are or using documents with the with the the acronym IRS, will probably raise the ire of some consumers and consumer lawyers as being violations of this portion of the of the rule.”

Another portion of this section of the rule to be aware of is using a company name other than the true business name. Companies that want to use the limited-content message, but which are not able to because their company name makes it clear they they are a debt collector may want to use a different company name when leaving messages. But to do so, those companies will need to make sure to follow the proper steps to officially change their name. They should not just use a different name or acronym for the purpose of leaving messages.

This section of the rule is also the one that addresses the meaningful attorney involvement standard that has become a hot-button issue for plaintiffs and plaintiffs’ attorneys. “The genesis of this meaningful attorney involvement claim against attorneys is grounded in misrepresentation,” Bedard said.

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