Deceptive Practices
To paraphrase Popeye, I can stands so much, and I can’t stands no more! That’s how I feel about a practice going on that is sure to embarrass the industry. We are so regulated and under so much scrutiny as it is, we do not need to fan the anti-bill collector fire.
The practice I am referring to is offered by what I used to consider smart and responsible industry vendors. In this practice, outbound dialer campaigns display the local area code of the consumer called.
No problem here, if your local collection office is in the same area code or region as the consumer. However, these services allow an agency in Pocatello, ID to show a Manhattan area code when calling a Manhattan consumer.
The purveyors of this “service” promise higher contact rates and more returned phone calls from consumers.
Here’s what I promise you. Class action lawsuits. The practice is deceptive pure and simple.
If you are using these services or thinking about them, imagine yourself in the witness stand under oath or being deposed.
Plaintiff’s Attorney: Mr. Agency Owner, your offices are in Pocatello, ID. Is that correct?
Agency Owner: Yes.
Plaintiff’s Attorney: Do you or have you ever had an office in Manhattan?
Agency Owner: No.
Plaintiff’s Attorney: Then why Mr. Agency Owner would you show a 212 area code on your caller ID when calling Manhattan residents?
Agency Owner: My vendor told me the consumer would call back 30% more often if I showed a local caller ID for the consumer.
Plaintiff’s Attorney: So it was your intent to deceive the consumer into accepting or returning the call, because you had a local presence in New York. Is that about the sum of it?
Agency Owner: ¬¬¬¬¬¬¬¬¬¬¬¬-_____________________________________________________________________
You fill in the above line. I would not want to be in that seat.
I do not know how you could explain the reason for using such a service unless it was to trick the consumers into taking or returning your phone call. Every compliance attorney I have asked has expressed concern if not alarm over this practice. All said they would advise their clients against using it as it would likely violate § 806(6) and perhaps §§ 807 and 808 of the FDCPA.
Read the ACA’s FastFAX 1168 on FDCPA and Caller ID. Agencies have been hammered for far less devious practices.
Since the folks selling this disservice and the folks using this product are running dialers, if found to be deceptive, then you are building huge classes for plaintiffs’ attorneys.
I have been in this industry for 25 years, and I am proud to be a bill collector. We provide a great service and keep credit markets liquid. That’s honorable. I have to take a stand, however, when I see dishonorable practices. Now, pass the spinach!
The practice I am referring to is offered by what I used to consider smart and responsible industry vendors. In this practice, outbound dialer campaigns display the local area code of the consumer called.
No problem here, if your local collection office is in the same area code or region as the consumer. However, these services allow an agency in Pocatello, ID to show a Manhattan area code when calling a Manhattan consumer.
The purveyors of this “service” promise higher contact rates and more returned phone calls from consumers.
Here’s what I promise you. Class action lawsuits. The practice is deceptive pure and simple.
If you are using these services or thinking about them, imagine yourself in the witness stand under oath or being deposed.
Plaintiff’s Attorney: Mr. Agency Owner, your offices are in Pocatello, ID. Is that correct?
Agency Owner: Yes.
Plaintiff’s Attorney: Do you or have you ever had an office in Manhattan?
Agency Owner: No.
Plaintiff’s Attorney: Then why Mr. Agency Owner would you show a 212 area code on your caller ID when calling Manhattan residents?
Agency Owner: My vendor told me the consumer would call back 30% more often if I showed a local caller ID for the consumer.
Plaintiff’s Attorney: So it was your intent to deceive the consumer into accepting or returning the call, because you had a local presence in New York. Is that about the sum of it?
Agency Owner: ¬¬¬¬¬¬¬¬¬¬¬¬-_____________________________________________________________________
You fill in the above line. I would not want to be in that seat.
I do not know how you could explain the reason for using such a service unless it was to trick the consumers into taking or returning your phone call. Every compliance attorney I have asked has expressed concern if not alarm over this practice. All said they would advise their clients against using it as it would likely violate § 806(6) and perhaps §§ 807 and 808 of the FDCPA.
Read the ACA’s FastFAX 1168 on FDCPA and Caller ID. Agencies have been hammered for far less devious practices.
Since the folks selling this disservice and the folks using this product are running dialers, if found to be deceptive, then you are building huge classes for plaintiffs’ attorneys.
I have been in this industry for 25 years, and I am proud to be a bill collector. We provide a great service and keep credit markets liquid. That’s honorable. I have to take a stand, however, when I see dishonorable practices. Now, pass the spinach!
Replies to This Discussion
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Permalink Reply by Neal Cropper on -
Question....
If you can use the number to return the call and it does not go into some telephony black hole but actually calls the agency, why is this bad?
It is just a contact number?
If I ran an agency in the USofA I would block all my calling numbers, but thats just me.
Flame away at my obvious ignorance as to why this is a bad thing.
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Permalink Reply by John McNamara on -
I would never flame away at you. Caller ID is one of the latest areas to get you sued. If you try to trick the consumer with a local area code when you are not local, will more than likely cause problems.
There is case law that cleared an agency that used "Unavailable" on their caller ID. Sounds like what you propose is perfectly fine.
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Permalink Reply by Kevin Stark on -
The only issue w/ unavailable is that it gets caught by 'Privacy Manager' applications. All a debtor has to do is subscribe to one of those services and they'll never get your call. Some of those services also scrub toll-free numbers. Most dialers detect 'Privacy Manager' messages as answering machines, since they don't begin with a tri-tone (a la Operator Intercepts), so it's hard to tell how many of your 'Answering Machine Detects' are truly 'Privacy Manager' messages.
I think that displaying a local number, with an area code/ prefix (NPA/NXX) that matches your physical location, is the most effective and legally the safest. Rotating that number w/ a toll-free can be a good strategy.
Dynamically displaying a local # that mates (at least) the area code of the debtor certainly seems deceptive.
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Permalink Reply by Craig Stewart on -
It does seem deceptive, but like anything else, there is a fine line that I think can be walked legally. Has anyone actually contacted local phone companies to see if they can forward a paid-for number to your main line? I realize that statement's not real clear, so here's an example of what I'm talking about:
1) Agency XYZ in Lincoln, Nebraska has Client ABC, who has a lot of clients in Manhattan.
2) Instead of simply pulsing out a "fake" number, XYZ contacts Verizon to set up the most basic 212 number possible, but instead of Verizon actually hooking up service, it is simply forwarded to XYZ's main office line.
3) XYZ pulses out their now-valid 212 number to debtors in the 212 area code.
Now obviously I am not suggesting that you do this for all area codes, but with some of the bigger ones (212, 312, etc), it seems to make sense. For the cost of a couple of bare-bones phone lines, you get your 30% increase in callbacks without as much danger of being sued over deception.
If this post is completely off base or won't work for some reason, please let me know, as this is something I'd really like to know more about.
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Permalink Reply by John McNamara on
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The collector in me agrees and loves the idea of increased call backs. The 25 year veteran, having seen every imaginable type of complaint fears this as real bait for plaintiff's attorneys.
I think they will go for the angle that the intent of the collector was to trick the debtor into answering the phone. A really good, honest agency was sued for using "Unavailable" on their caller ID. Fortunately the agency won. If you are an ACA member, get your hands on a copy of their FastFax on this subject.
For the sake of clarification, these services are not pulsing fake numbers, but actual DID's that match the debtor. The possible deception is not that they are fake numbers it is that they show a local area code when they do not have an office making calls from that area code.
Again, if you do this, and do not have offices in that area, imagine an attorney working you over to ascertain the reason why you bought the phone lines.
If we as an industry get nailed on this, it sets us back on things like permission to call cell phones, and ability to use SMS and send emails.
As an industry, we tend to be considered guilty until proven innocent. I am almost certain this practice will make us look bad and reinforce that mindset.
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Permalink Reply by David on -
this thread seemed to drop off last month. has the ACA provided any direction via their ethics committee?
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Permalink Reply by JJ Hornblass on -
David, you are right that we should follow up on this. We'll post any information we get. Thanks for the poke.
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Permalink Reply by John McNamara on
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My understanding is that the ACA Ethics Committee is reviewing the practice. I think we should hear something soon.
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Permalink Reply by Mary Wisniewski on -
David,
I checked in with the ACA's press contact, and he said this topic should be addressed at the November Ethic's Committee meeting. Advice should be on its way.
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Permalink Reply by Wes Alford on -
I agree with this post 100%. This is why I run a shop with NO I repeat NO dialer systems. To me going back to old school has more success. Alot of the OC I talk to do not like placing their accounts with agencies who just spin their accounts on a dialer. Get back to basics. Collections is work. The industry has chosend to take a lazy mans approach and has dumpped millions of dollars into the dialer method. What has it got you?
This is just my opinion. My 2 cents.
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Permalink Reply by Todd Tallman on -
I couldn't agree more, John. I am co-chair of a collections committee that has monthly conference calls. I recently had a VP from a reputable vendor speak on a call and I had to convince them to remove references to that "service" from their presentation. It amazes me that other professional collectors can't recognize the incredible risk this poses.
Todd Tallman
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Permalink Reply by John McNamara on
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Thank's for post, Todd. I was beginning to think no one saw this in the same light. It will be interesting to see what the ACA Ethics Committee rules. I still keep coming back to the fact you would have a hard time explaining why you did this other than to trick the consumer in to calling you back or accepting the call. I am following closely and will keep this blog updated.
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