Letters - A Compliance Officer's Nightmare

  • Written by Debra J. Ciskey

ciskey debra jI have heard more than one compliance officer lament about the risks involved in sending correspondence to consumers. Even operations staff prefer not to send letters, as the common belief is letters do not collect money — collectors collect money. The abundance of state requirements related to collection letters complicates the issue since the requirements often relate to the attributes of an individual account. For example, if you are sending a letter to a consumer that is an initial notice related to medical debt on an account that is purchased, and is out of statute yet still eligible for and intended to be credit reported, there are at least four distinct disclosures that must be provided under state law, notwithstanding the federal validation notice and Mini- Miranda requirements. If you have spoken with the consumer and demanded payment in a language other than English before these notices have been sent, then your disclosures would have to be provided in that language. The irony is that consumer groups and some regulators have expressed their opinion that communications with consumers are best achieved in writing. With a response rate of less than 5%, this stance is difficult for industry members to understand.

Luckily, resources related to state law requirements are readily available. My favorite resource and most familiar resource for the most up-to-date information on these requirements is ACA International’s SearchPoint (formerly known as FastFax). This database of issue-specific resources is a benefit of membership in ACA. The documents are updated frequently. I recently reviewed two of the documents, Special Text Requirements and State Specific Language, in my annual review of our own company’s notices and instructions to our letter vendor. In addition, ACA’s compilation of State Collection Laws and Practices is equally as helpful, but as it contains much more information, it may take more time to digest. Other organizations have available resources, but I rely on the ACA references. The collection letter requirements fall into 10 distinct categories which I have listed, along with the states that have requirements in the categories. Space limitations prevent me from providing the text of the requirements, but anyone contacting consumers in the states mentioned, if the category is applicable, should seek to ensure notices address the requirements. Also, the collection of bad checks carries its own set of state required disclosures, and those are not included in the categories in the chart.

Let’s get back to the basics first. To meet requirements of many states, all letters should include: 1) the date the letter was generated, 2) the licensed or registered name of the collection agency, 3) the agency’s address, 4) the toll-free phone number of the debt collector, 5) the agency’s days and hours of operation, 6) name of the creditor, 7) account balance, 8) name of the intended recipient, and 9) the purpose of the letter. State requirements are in addition to those requirements. Also, the recent spate of lawsuits resulting from account numbers and/or other strings of alphanumeric characters, bar codes, and QR codes showing through the window on envelopes caution us from using these until this matter is settled once and for all. Let’s not forget disclosures that would be suggested by federal enforcement actions related to out-of-statute debt.

State-Specific Letter Requirements

Categories Applicable States
Right to cease communication Colorado, Massachusetts (POE cease)
Credit reporting language California, Utah
Disclose existing creditor/debt collector financial or managerial relationship Idaho
Initial notice special language California, Colorado, Illinois, Minnesota, New York, Washington
Itemizations in subsequent communications Washington
Language requirements California, New Mexico
License/permit number and/or regulator info Colorado, Minnesota, New York, North Carolina, Tennessee, Wisconsin
Medical collection specific language California, Connecticut, Minnesota (hospital), Nevada
Out- of-Statute debt language California (purchased debt), Connecticut, New Mexico, New York, New York City,
West Virginia
Purchased debt specific language California, New Mexico


Getting it right with your letter vendors is the next challenge. Communication, quality control, and oversight are the keys here. Ultimately, the debt collector is held responsible for omissions, so don’t make assumptions — check, check again, and recheck.

Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.