Collector - November 2020 - 44

Right-Party Contact
How to verify the consumer's identity.

A

common compliance question is
whether a debt collector should
verify a consumer's identity
before disclosing a debt, and if so, how?
These are both important considerations,
and the Fair Debt Collection Practices
Act does not provide a direct answer in
either case.
Clearly, the FDCPA prohibits the
disclosure of a debt to a third party under
Section 805 of the act. However, when
speaking with consumers, other provisions
of the act (specifically Sections 806(6)
and 807(11)) require that debt collectors
disclose their identity as well as the fact
the communication is from a debt
collector. The tension between these
sections of the FDCPA becomes clear
when attempting to comply with the
statute in day-to-day practice.
When making outgoing calls, debt
collectors cannot be sure they are speaking
with the correct consumer until they have
confirmed that person's identity. Therefore,
logic dictates that some steps must be taken
to verify a consumer's identity
prior to disclosing the debt, or the caller
risks third-party disclosure. Unfortunately,
the FDCPA is silent on completing the
verification process.
That's why it's essentially a business
decision to determine how to identify
the consumer, at least for purposes of the
FDCPA. Debt collectors have some leeway
in developing policies and procedures
to address this issue. Notably, while
the FDCPA does not provide a specific
verification standard, it is possible other
applicable laws or agreements with a
client may stipulate a verification
standard or may otherwise describe how
the debt collector should verify
the consumer's identity.
One of the more common methods
used to confirm a consumer's identity is to
verify the last four digits of the individual's

44

Social Security number. However, with
the prevalence of identity theft, many
consumers are reluctant to reveal even a
portion of their Social Security number
over the phone. Debt collectors may need to
consider using alternate means of verifying
the consumer's identity.
Policies may vary depending on the
information available to the collector,
but generally include tactics such as
requesting consumers state their current
or previous address, employer, birthdate,
occupation, mother's maiden name, or
other combination of data that is unique to
the consumer.
If consumers are hesitant to provide
this information to the collector, as an
alternative, the collector may want to
ask consumers to simply confirm the
information. For example, the collector
may ask the consumer, "Are you the
John Peterson living at 123 Paradise
Ave?" If the consumer ultimately
refuses to confirm his or her identity,
the debt collector should politely end
the call and document the unsuccessful
verification attempt.

POLICIES AND PROCEDURES
Collection agencies must ensure they
have a written policy detailing the steps
to verify a consumer's identity, and staff
should be trained periodically to ensure
the policy is followed. While no method
of identification is perfect, if an agency
has appropriate written policies and
procedures in place, it can avail itself of the
bona fide error defense in the rare instance
when a third-party disclosure actually
occurs. The bona fide error defense
available under the FDCPA (Section
813(c)) shields a debt collector from
liability for inadvertent errors, but only if
the debt collector has written policies and
procedures in place that are designed and
adopted to avoid the error.
For more information on compliance topics,
check out ACA's member-only SearchPoint
library. The ACA SearchPoint library is
filled with documents that put important
compliance information related to the
FDCPA, FCRA, TCPA, state laws and more
at your fingertips. To access ACA SearchPoint,
visit acainternational.org/searchpoint.

ACAINTERNATIONAL.ORG


http://www.acainternational.org/searchpoint http://www.ACAINTERNATIONAL.ORG

Collector - November 2020

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