Debt collection text messages not protected by bona fide error?


Beginning in late 2020, national media and consumer advocates issued panicked warnings about debt collectors inundating consumers with unwanted text messages, emails and social media posts in an attempt to collect debts. debts after the implementation of Regulation F:

One of the articles quoted above and published by NPR even opens with a following fallacious scenario that would NEVER happen in any professional debt collection agency in the United States today and is clearly prohibited by Regulation F :

“The next time someone tries to friend you on Facebook or follow you on Instagram, it could be a debt collector.”


Won’t the CFPB management comment on its own rules?

Despite these seemingly dire warnings from our most trusted media outlets, the predicted flood of unwanted electronic debt collection communications has apparently not yet arrived. The reality is that the CFPB’s Regulation F guidelines on electronic communications are unnecessarily restrictive and primarily focused on email, when most consumers seek open and secure communications via text messaging or SMS.

Unfortunately, the false media coverage claiming that Regulation F will lead to a flood of unwanted debt collection communications has frightened CFPB leaders into silence, apparently fearing further negative media backlash from NPR, CBS and others if the CFPB was clarifying its own confusing rules on SMS. Again, CFPB leadership is conspicuously absent when needed most. (See also Hunstein: Does CFPB leadership lack courage and vision?) Where is the bold and decisive leadership at the CFPB that can rise above the false media coverage and provide the protection and guidance that consumers in the United States demand?

Court holds text message not subject to bona fide mistake defense

The CFPB’s lack of practical clarity on the use of SMS for debt collection has directly resulted in an increased workload for the Federal Courts to determine the rules. In a recent case, a federal court ruled that a debt collection text message was not subject to the good faith mistake defense under the Fair Debt Collection Practices Act, writing:

“However, [the debt collector’s] procedure consisting in relying exclusively on [the creditor] – without internal controls – is not “reasonably adequate to avoid the specific error at issue”. In Owen, the debt collector contracted with the creditor to assign accounts that are “validly due and payable”. Owen, 629 F.3d at 1275. In holding that the debt collector was not entitled to the defense of good faith error, the Eleventh Circuit said:

[M]above all, [the debt collector] did not indicate any internal error-correction procedures to avoid errors in the calculation of debt amounts, such as interest on overdue interest or additional charges beyond the debtor’s unambiguous written agreement. [The debt collector] has provided no evidence of training techniques it employs to promote FDCPA compliance. For instance, [the debt collector] cited no evidence that it trains its employees to review principal and interest to avoid compound interest errors, let alone internal procedures for separating principal and interest to avoid collection errors. . . . In sum, [the debt collector] did not cite any internal controls it uses to reduce the incidence of improper debt collection. Instead, [the debt
collector’s] procedure consists of outsourcing its monitoring task to its creditor []who must only declare debts that are “validly due and payable”.

Owen, 629 F.3d at 1276 (internal footnote omitted). The same is true here. [Defendant debt collector]as Owen’s debt collector, “did not cite any internal controls it uses to reduce the incidence of improper debt collection”, opting instead to outsource all of its monitoring operations to his creditor, [debt buyer]. Carter vs. Capital Link Management 21-cv-00088 (ND AL 2022).”

The above excerpt from the Court’s decision of July 12, 2022 in the Carter case details the current expectations of this Court for a debt collector to establish a defense of bona fide mistake when sending text messages.

The Carter case is a great example of the kind of detailed practical guidance that the CFPB could provide to debt collectors, such as specific procedures with examples of communicating with consumers via SMS. Unfortunately, the CFPB’s guidelines on electronic communications to date through Regulation F have primarily focused on avoiding third-party disclosures when using email, a harm that is rarely (or even never) affirmed. Additionally, the CFPB’s tortured guidelines on how a debt collector can issue the posting notice electronically are so convoluted that they are impossible to implement in most cases.

It is even more disconcerting that the CFPB chooses to expend considerable taxpayer resources to issue advisory opinions on some issues while being silent on others. For example, on June 30, 2022, the CFPB issued a 10-page advisory opinion reiterating its position on convenience fees that it had previously issued on August 2, 2017. FDCPA Advisory Opinion; Pay-to-Pay fees (

The 2022 advisory opinion above is not materially different from the opinion published by the CFPB in 2017 on exactly the same subject. Why would the CFPB choose to reiterate its position on a long-settled concern such as convenience fees while issues involving text-based debt collectors and letter sellers remain unresolved? Unfortunately, in the absence of relevant guidance from the CFPB, we can expect the Federal Courts to fill the void and continue to define the procedures for communicating via SMS with consumers.

See the complete order in Carter vs. Capital Link Management here.


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