Last week insideARM wrote about a court decision that addressed the issue of sending a validation notice via email. (Lavallee v. Med-1 Solutions, LLC (Case No. 1-15-cv-1922, U.S.D.C., Southern District of Indiana). In that article, we suggested that this case was a very important and timely decision as the potential for ARM industry use of email to communicate with consumers is gaining momentum.

We also suggested that the Consumer Financial Protection Bureau (CFPB) take notice of this case. The defendant in the case was attempting to balance privacy and security concerns with Fair Debt Collection Practices Act (FDCPA) compliance. Unfortunately for the defendant, the judge in this case determined that the process employed by the defendant put them in violation of Section 1692g(a) of the FDCPA.

Stefanie commented:

“This decision further underscores the need for clear regulatory guidance on how first- and third-party collectors can use newer communication technologies in a compliant way under the FDCPA. Consumer studies and anecdotes continue to demonstrate that many consumers prefer to be contacted through email and texts, as opposed to more the traditional communication formats that existed when the FDCPA was enacted. Regulators and companies share a common interest in wanting to honor consumers’ communication preferences. However, absent guidance, creditors and their third-party agents are left in the dark on how to develop compliant communication strategies that will satisfy their consumers’ preferences without running afoul of the law. Clear guidance on this issue is necessary to develop a consistent approach that all companies can implement and comply with going forward.”

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