Collector - July 2018 - 25
f you've been in the accounts
receivable management industry
even for a brief period, you know
that the only constant is change. While
the Fair Credit Reporting Act and Fair
Debt Collection Practices Act generally
dictate the direction of our business,
court decisions often drive policy changes.
Keeping up with those changes can be
overwhelming-especially when it comes
to the disclaimer language in our notices.
The FDCPA does not directly address the
issue of disclosing interest charges on a
debt, and case law provides conflicting
views on how to handle this subject. As a
result, best practices for disclosing interest
charges on collection letters can vary from
state to state, depending on how courts
have ruled in a particular jurisdiction.
Understanding recent and established case
law can help shed light on this issue.
In March 2018, the Second Circuit
reviewed the district court's decision in
Taylor v. Financial Recovery Services. The
Second Circuit agreed with the district
court, finding that not including an interest
disclosure in a collection letter where there
is no interest accruing does not violate the
FDCPA. The court reasoned that the only
impact such a disclosure would have is
encouraging a consumer to delay repayment
of their debts.