January Top Compliance Question: What Information May Debt Collectors Request from Third Parties?

Published: Friday, February 17, 2006

The top compliance question received by ACA's Compliance Department in January pertained to contacting third parties to obtain location information. A debt collector may contact a third party-such as the consumer's neighbor, friends, relatives or employer-for the purpose of acquiring location information of a consumer, commonly referred to as skiptracing. This is the only reason a debt collector would have to contact a third party. Otherwise, a debt collector is prohibited from contacting a third party unless the consumer gives prior consent directly to the debt collector, a court of competent jurisdiction gives its express permission or it is necessary to carry out a post-judicial remedy.

A debt collector must adhere to the provisions set forth under Section 804 of the Fair Debt Collection Practices Act (FDCPA) when contacting a third party for location information. The collector must identify herself and is required to inform the third party that she is correcting or confirming location information regarding the consumer. The collector may not reveal the name of her employer unless specifically requested by the third party. Under no circumstances may the debt collector ever disclose the existence of the consumer's debt to a third party.

In attempting to obtain location information, a debt collector may not communicate with a third party more than once unless the person requests the debt collector contact her again or if the debt collector reasonably believes that the response was erroneous or incomplete and the third party now has correct or complete information. In addition, a debt collector may not contact a third party with the pretense of gaining information already in the collector's possession.

The only information a debt collector can request from a third party is the location information of the consumer. Location information includes the consumer's home address, home telephone number, and the consumer's place of employment. Location information does not include the consumer's telephone number at work, the names of the consumer's supervisors and their telephone numbers, the consumer's salary, or the consumer's paydays. Therefore, asking a third party for any information other than the consumer's home address, home telephone number or place of employment is strictly prohibited under the FDCPA.

Seeking to verify employment is attempting to acquire location information on a consumer because the debt collector is seeking to confirm or correct the place of the consumer's employment. The place of employment is included in the FDCPA definition of "location information." Therefore, when a debt collector contacts a presumed employer to verify a consumer's employment, the debt collector may only request that the company verify whether or not the consumer is currently employed by the company. The debt collector may not request the consumer's work phone number, supervisor's name, dates of employment or any other information as such a request would fall outside of the definition of "location information."

Moreover, several states place greater restrictions on obtaining location information through third parties. Please see E-Compliance document #310 for more information on this topic.

This article is provided by ACA International's Legal and Government Affairs Department .