The Federal Fair Trade Commission just issued an advisory opinion to the American Collectors Association. In that opinion, the FTC answered the question, what is a collector supposed to do when a debtor sends in a cease and desist communication letter to a collector while, at the same time, disputing an item on his credit report. The problem is that under the FDCPA, when a third party debt collector receives a cease and desist letter, he is supposed to stop all communication with the debtor, except in certain circumstances. BUT….when the debtor disputes an item on his credit report, a collector may conduct an investigation, but can the collector report his findings back to the consumer if that consumer also sent in a cease and desist letter? The FTC said yes, that indeed, the collector can report his findings and conclusions that result from his investigation.
While ACA has posted a Youtube video on receiving this advisory opinion, it sure raises a lot of questions regarding what the real effect of this opinion will be. For example:
1. After the collector (who has already received a cease and desist letter from a consumer) calls the consumer back and informs him that the debt belongs to the consumer, can the debt collector continue, in that same conversation, to ask for payment from the consumer?
2. if the collector finds that in fact, the debt did not belong to the consumer, does the consumer have an FDCPA action against the collector and collection agency for previously alleging that a debt was due when, in fact, no such debt was ever due?
3. Why would any consumer dispute a trade line with a collection agency. That is just plumb wrong. Consumers, please posit your disputes with the credit reporting agencies. Then and only then have you preserved your rights under the Fair Credit Reporting Act. Complaining to the lender does not preserve your rights.
As you can see, this advisory opinion may raise more questions than it may solves.