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It’s a text that would make most people take notice: ALERT ALERT ALERT .. YOUR PAYMENT WAS DECLINED DUE TO AN INSUFFICIENT ACH TRANSACTION…CALL 866.597.3075. But it wasn’t really an alert. There wasn’t a declined payment. And an “insufficient ACH transaction” isn’t even a real thing.

It was a deceptive text message sent by debt collectors to illegally lure purported debtors into contacting them.

That’s just one example from three separate cases filed as part of an FTC law enforcement sweep called “Messaging for Money.” Taken together, the lawsuits against Unified Global Group, Premier Debt Acquisitions, The Primary Group, and affiliated individuals and corporations allege a veritable con-ucopia of deceptive claims, unfair practices, and violations of the Fair Debt Collection Practices Act. What unites them is the use of misleading texts, just one way the FTC says some debt collectors are twisting technology to violate the law.

Federal courts in New York and Georgia have entered orders to put a temporary halt to the defendants’ activities. But even at this early stage, the complaints in the Messaging for Money cases suggest 3 dos, 3 don’ts, and 1 don’t-even-think-about-it for other members of the debt collection industry.

Don’t use deceptive texts to collect debts. It isn’t illegal in and of itself to use texts in debt collection. But no matter how debt collectors communicate with consumers, the law still applies. One particular concern in the Messaging for Money cases is that by sending misleading texts, debt collectors used false pretenses to get consumers to contact them. The technology may be new, but the tactic has a long and unsavory lineage. (For example, 40 years ago the FTC challenged the practice of encyclopedia salesmen quite literally getting their foot in the door by falsely claiming to be conducting educational surveys.) Representing a debt collection text as anything other than a debt collection text runs afoul of established standards.

Do identify yourself.  Under Section 806(6) of the FDCPA, debt collectors have to make “meaningful disclosure” of their identity to consumers. No falsity, no flim-flam, and no fooling. The FTC says some defendants violated that provision by leaving threatening voicemails that didn’t disclose they were debt collectors. Others refused to identify who they worked for. Consumers have a right to know if collectors who contact them are authorized to collect on a debt. The rise of sleazy phantom debt collectors makes that right even more important.

Do make the “mini-Miranda” disclosures required by law.  Section 807(11) of the FDCPA mandates what industry insiders call a mini-Miranda. In an initial communication with a consumer, the collector has to disclose that he or she is attempting to collect a debt and that any information obtained will be used for that purpose. Later communications also have to disclose that they’re coming from debt collectors. The FTC says that all three Messaging for Money cases involve violations of the mini-Miranda requirement.

Do follow up with proper validation notices.  Within 5 days after the initial communication with a consumer, a debt collector has to send a written notice detailing certain specifics, including the amount of the debt, the name of the creditor, the procedure for disputing the debt, and other information outlined in Section 809 of the FDCPA. The FTC alleges the Messaging for Money defendants often didn’t follow up with the required notice. Some of them continued to press for payment even after consumers offered evidence that they didn’t owe the money.

Don’t reveal the existence of a debt to third parties.  According to the FTC, some of the Messaging for Money defendants blabbed to third parties that the consumers in question owed money. Outside very specific and narrow procedures authorized by the FDCPA, Section 805(b) makes it illegal to tell others – including friends, family, neighbors, co-workers, and employers – about a person’s debts.  

Don’t help yourself to more than you’re authorized to collect.  Section 808(1) of the FDCPA makes it illegal for debt collectors to collect any amount that isn’t expressly authorized by the agreement creating the debt or allowed by law. Among the prohibited categories are “any interest, fee, charge, or expense incidental to the principal obligation.” According to the FTC, the “processing” or “convenience” fees one company imposed violate that part of the law.

And now for that don’t-even-think-about-it.

Don’t even think about falsely threatening people with arrest, imprisonment, lawsuits, wage garnishment, etc. – or impersonating people affiliated with the government or the legal system.  Let’s get this one off the table immediately: Debt collectors can’t have people arrested for not paying a private debt, so threats about arrest or jail are illegal. But that didn’t stop some of the defendants from making it seem like arrest was imminent. According to one complaint, a debt collector told the consumer the police would be sent to her husband’s workplace to arrest him for “defraudment of a bank.” Some defendants added to the credibility of the threat by suggesting a phony affiliation with a government agency. One example alleged by the FTC: voicemails left with consumers or family members claiming to be from “the State Officials Office,” threatening to dispatch “a uniformed officer to [the consumer’s] home or place of employment to enforce this body attachment.” Laying it on thick, the defendants often ended those messages with instructions to “secure any large animals or firearms on the premises.” As the Messaging for Money complaints illustrate, it’s also illegal to threaten consumers with civil lawsuits when the debt collector hasn’t filed or doesn’t intend to. And don’t even think about claiming a phony relationship to the judicial process. For example, the FTC says the defendants in one case falsely claimed, “I’m a process server with Primary Solutions, appointed to serve you papers for case [eight-digit number]. . .”  Other defendants lied to consumers about their affiliation with attorneys or law firms. The bottom line: Bogus bluffs and impersonations violate the FDCPA and the FTC Act.


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March 28, 2016
I have a question about part of this. I know things can get down to details in some situations involving the FDCPA. In regards to the "mini-miranda", which is required by law, if a debt collector on a phone call said "This is an attempt to collect a debt and any information obtained would be used for that purpose." is that in any way a violation of the fdcpa? Notice the small change of "would be used" instead of "will be used". Any information you can offer on this would be greatly appreciated. Thanks in advance.
October 05, 2017
Does the mini miranda need to be recited during every attempt to contact the consumer via telephone (and voice mail message)?
November 16, 2017

In reply to by Jeff

Yes. Any time a third party debt collection agent contacts you pertaining to the debt AFTER they have verified who you are, they must recite the mini Miranda otherwise they are at fault for not adhering to the collection methods outlined by the FDCPA

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