Collector - March 2021 - 27

state laws. For example, some states do not
allow debt collectors to conduct collection
activities using any other name but their
legal name.
In addition, some states require a debt
collector to obtain a license for any name
they use that is different from the one that
appears on their license. Others require that
a debt collector use only the exact agency
name that appears on the agency's state
license (except for skiptracing purposes and
on the exterior of envelopes).
For states like these, agencies would
need to conduct a state-specific analysis of
licensing requirements and other relevant
state law to determine whether they
would be able to leave a limited content
message using a trade name (registered
or unregistered) that does not appear on
their debt collection license for the state or
states in which they seek to leave the limited
content messages.
Agencies must keep in mind that even
if the FDCPA allows the use of acronyms,
certain states prohibit their usage. This
prohibition limits an agency's ability to
leave limited content messages if their name
reveals they are a debt collector.
Debt collectors must also keep in mind that
not following state licensing requirements
can lead to unfair, deceptive or abusive acts or
practices (UDAAP) enforcement by the CFPB.
Recently, the CFPB entered a consent
order with RAB Performance Recoveries
LLC. In the order, the CFPB alleged that
the debt buyer was not licensed to collect
debts in Connecticut, New Jersey and
Rhode Island, but had sent settlement
offers to consumers and obtained
judgments against consumers. According
to the bureau, these actions violated
Sections 1692e(5),(10) of the FDCPA and
included false and misleading actions
that qualified as UDAAP. The debt buyer
entered into a consent order with the
CFPB, " without admitting or denying any
of the findings of fact, conclusions of law,
or wrongdoing, except that [it] admits the
facts necessary to establish the Bureau's
jurisdiction over [the debt buyer] and the
subject matter of this action. "

COLLECTOR 03.21

The debt buyer was required to refrain
from collecting on the subject accounts
and assisting others to engage in this
type of conduct. It was also required to
vacate any judgments not discharged in
bankruptcy, cease collecting on stipulated
accounts, and cease any garnishments and
other post-judgment enforcement activity.
Finally, the debt buyer had to pay
$204,000 to the bureau.
Debt collectors and debt
buyers should both consider this
consent order as a reminder of the
importance of licensure and how
sometimes violations of state laws can
become violations of federal laws as well.

BRINGING IT ALL TOGETHER
The FDCPA does not necessarily require debt
collectors to register a trade name in order
to comply with its obligations. It's clear that
courts approve of trade names when they're
registered where used and that some courts
have approved of the use of trade names
registered in the debt collector's home state-
even if they're not registered in the state where
the debt collection communication takes
place and where state law otherwise requires
foreign entities to file a certificate of assumed
name or similar docket.
Even if a debt collector does not register
its trade name, as long as it's used in the
normal course of business with the public
(including with individual consumers) and
does not misrepresent the debt collector's
corporate identity, role in the debt collection
process or institutional affiliation, it should
pass muster under the FDCPA and its true
name requirement.
With that in mind, however, if a specific
state's law bans debt collectors from using any
name except their legal, registered or licensed
company name (including trade names),
debt collectors will probably want to avoid
using an unregistered or unlicensed trade
name to prevent unintended state regulatory
consequences and potential liability under
applicable state consumer protection laws.
Laura Dadd is ACA International's
compliance analyst.

1

The FDCPA does not
necessarily require debt
collectors to register a trade
name in order to comply with
its obligations.

2

Courts have approved
of the use of trade
names registered in the debt
collector's home state.

3

Some state laws ban
debt collectors from
using any name except their
legal, registered or licensed
company name (including
trade names).
27



Collector - March 2021

Table of Contents for the Digital Edition of Collector - March 2021

Collector - March 2021 - Cover1
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Collector - March 2021 - 1
Collector - March 2021 - 2
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