SMS Regulations: Debt Collection Digital Communications in the USA

New rules have been implemented for debt collection digital communications in the United States of America (USA). These new rules impact on how companies in the USA can use SMS messaging for the debt collection notifications.

The Federal Trade Commission (FTC) has issued rules on debt collection digital communications in terms of the Fair Debt Collection Practices Act of 2010 (FDCPA). These regulations are titled the Debt Collection Practices (Regulation F) of October 2020, which come into effect from 30 November 2021.

The following rules apply specifically to SMS messaging used for sending debt collection communications in the USA:

• A debt collector is defined as a party who directly or indirectly collects or attempts to collect debt from consumers.
• Debt collectors can call a consumer, or send letters, emails, or SMS messages to collect a debt.
• Debt collector communications apply per debt and not per consumer, and there are no restrictions on how many times a debt collector can contact a consumer via text or email, however, the frequency of messages cannot be abusive or harassing.
• A debt collector’s SMS notification must include instructions for a consumer to opt-out from receiving further SMS communications.
• Debt collectors cannot contact a consumer before 8 a.m. or after 9 p.m., unless a consumer agrees to it.
• A consumer can stop a debt collector from contacting them by via mailing a letter to the debt collector. On receipt of the letter, a debt collector can contact a consumer to confirm it will stop contacting the consumer or whether they plan to take other actions, such as filing a lawsuit.
• A debt collector must give a consumer valid information about the debt in communication, and this notification must include the following information: how much money is owed, the name of the credit to which the money is owed, how to get the name of original creditor, and steps to take if a consumer does not think it is their debt.

These rules on debt collection digital communications give specific application to existing laws regulating commercial SMS messaging to ensure consumer protection in the USA, namely:

• Telephone Consumer Protection Act of 1991 (TCPA) regulates telemarketing and puts in place consumer protection measures to limit unwanted (unsolicited) commercial SMS messages. The TCPA mandates explicit consent as the basis for receiving SMS messages, even if a business has a relationship with a consumer, and consumers may revoke consent to receive calls or SMS messages in any ‘reasonable’ way, at any time. The TCPA’s do-not-call rules are set out here.
• Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) which applies the TCPA to unwanted mobile service commercial messages, specifically regulating marketing communications sent via SMS by companies to a consumer does not have a business relationship. This act stipulates that opt-out requests must be honoured promptly.

To enable organisation to comply with above applicable laws to SMS messaging, the Cellular Telecommunications and Internet Association (CTIA) promotes voluntary industry best practices.

The CTIA’s Messaging Principles and Best Practices provides a guide to running SMS campaigns in the USA in accordance with the above laws – TCPA and CAN-SPAM, including making use of opt-in processes to obtain written consent to receive SMS messages from a company (section 5.1.2), applying opt-out processes (section 5.1.3), and ensuring message content follows best practices (section 5.3).

Disclaimer: Please note that this regulatory information is not legal advice. Please consult with your legal counsel before running any campaigns.