Collector - July 2018 - 21

permissible, it's important to know whether
the laws of the state allow the consumer to
be charged those fees.
For example, Arizona law states that a
collection agency cannot threaten or attempt
to collect any attorney fees, collection cost,
or other fee not provided in the contract
creating the debt. However, certain states
are silent as to the permissibility of adding
fees, including Alabama, Maryland and
South Dakota. The contrast between
state laws underscores the importance of
understanding each individual state's stance
on adding fees in order to limit liability.

DECISIONS OF NOTE
Take a close look at relevant court decisions
within the jurisdiction you're considering
to determine what collection practices
may be risky. When federal and state laws
and regulations are unclear, it's necessary
to look to court decisions for guidance.
However, as judicial opinions can vary
from state to state (and sometimes court to
court), researching case law on pertinent

issues can help you devise compliance
strategies for new markets.
One example that illustrates the
importance case law plays in determining
best practices for collection comes from
the Third Circuit, which is composed of
Pennsylvania, New Jersey and Delaware.
The U.S. Court of Appeals for the Third
Circuit held that a mere string of numbers
(subsequently identified as an account
number) displayed through a glassine
window on the envelope of a debt collection
letter violates the FDCPA. The appellate
court reasoned that the consumer's account
number was not "benign" or "meaningless"
because "it could be used to expose her
financial predicament." However, a majority
of courts in other circuits have expressly
rejected or narrowed the holding.
A debt collector interested in collecting in
a state within the Third Circuit would want
to be cognizant of this ruling when deciding
what information is placed on the outside
of an envelope addressed to consumers, as
ignorance of the ruling could lead to issues
of liability that may not be present in your
home state. That's why it's critical to conduct
a thorough search of case law in another
state before attempting to collect there.
Expanding your collection business into
a new state is a big undertaking, requiring
both an adventurous mindset and a clear
roadmap. Cultivating a firm understanding
of state law and employee requirements
will provide a guiding light to the riches of
expanding into new territories.
Laura Dadd is ACA International's
compliance analyst.

MORE ONLINE
Looking to expand into a new asset class, too?
Get tips on diversification here:
online.collector.com/collectormagazine/201806.

COLLECTOR 07.18

KEYNOTES

1

Some states may not
have a statewide licensing
requirement but do require
a license at the municipal or
city level.

2

Because a collection
agency manager has
a lot of responsibility,
some states require them
to go through a licensing
process. Some even regulate
what should happen if the
collection manager were to
leave the company or die.

3

While including multiple
state disclosures in a
single form letter may seem
like a logical move, this
can open an agency up to
FDCPA liability.
21


http://online.collector.com/collectormagazine/201806/index.php#/12

Table of Contents for the Digital Edition of Collector - July 2018

Upfront
Industry News
Best Practices
FYI
Collection Tips
Navigating Uncharted Territory
Making Sense Out of Collection Notice Requirements
Do You Need to Contact Creditors to Verify a Debt?
Calendar
Honor Roll
Getting on the Right Path
A Better Framework
ACA Members Contribute to Successful Collectors Challenge Month
The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Connecting with Legislators at ACA’s Washington Insights Conference
Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Compliance
ACA SearchPoint
Ad Index
Last Word
Collector - July 2018 - Cover1
Collector - July 2018 - Cover2
Collector - July 2018 - 1
Collector - July 2018 - 2
Collector - July 2018 - 3
Collector - July 2018 - Upfront
Collector - July 2018 - 5
Collector - July 2018 - Industry News
Collector - July 2018 - 7
Collector - July 2018 - 8
Collector - July 2018 - 9
Collector - July 2018 - Best Practices
Collector - July 2018 - 11
Collector - July 2018 - FYI
Collector - July 2018 - 13
Collector - July 2018 - Collection Tips
Collector - July 2018 - 15
Collector - July 2018 - Navigating Uncharted Territory
Collector - July 2018 - 17
Collector - July 2018 - 18
Collector - July 2018 - 19
Collector - July 2018 - 20
Collector - July 2018 - 21
Collector - July 2018 - 22
Collector - July 2018 - 23
Collector - July 2018 - Making Sense Out of Collection Notice Requirements
Collector - July 2018 - 25
Collector - July 2018 - 26
Collector - July 2018 - 27
Collector - July 2018 - 28
Collector - July 2018 - 29
Collector - July 2018 - Do You Need to Contact Creditors to Verify a Debt?
Collector - July 2018 - 31
Collector - July 2018 - 32
Collector - July 2018 - 33
Collector - July 2018 - 34
Collector - July 2018 - 35
Collector - July 2018 - Calendar
Collector - July 2018 - Honor Roll
Collector - July 2018 - Getting on the Right Path
Collector - July 2018 - 39
Collector - July 2018 - A Better Framework
Collector - July 2018 - 41
Collector - July 2018 - ACA Members Contribute to Successful Collectors Challenge Month
Collector - July 2018 - 43
Collector - July 2018 - 44
Collector - July 2018 - 45
Collector - July 2018 - The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Collector - July 2018 - 47
Collector - July 2018 - Connecting with Legislators at ACA’s Washington Insights Conference
Collector - July 2018 - 49
Collector - July 2018 - Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Collector - July 2018 - 51
Collector - July 2018 - Compliance
Collector - July 2018 - 53
Collector - July 2018 - ACA SearchPoint
Collector - July 2018 - Ad Index
Collector - July 2018 - Last Word
Collector - July 2018 - Cover3
Collector - July 2018 - Cover4
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