Why a Debt Collection Letter Doesn't Look Like One

The most difficult part of a debt collector’s job has been, and always will be, establishing communication with the consumer they are collecting from. Debt collectors go to great lengths to establish contact with consumers primarily through telephone calls and letters. In my experience, once contact is eventually established with the consumer, one of their biggest complaints is the claim they have never been notified about their debt being in collection. This would always come as a surprise because we would send consumers what is known in the debt collection industry as a “validation notice” once we received the account. The validation notice outlines the consumer’s rights to validate their debt if they are unsure of it. So if a debt collector is sending validation letters – and it’s my experience that the majority of debt collectors do — why aren’t consumers receiving them?

The answer most likely is consumers are receiving them, but because the envelopes from debt collectors are often vague and inconspicuous, they aren’t getting opened. These letters are often confused with solicitation from marketing companies who keep the return address and envelope nondescript in order to get the recipient to open the piece of mail. However, a lot of recipients won’t open mail if they do not know where the letter is from or who sent it. The problem with that practice is if you are in debt and a debt collector is contacting you, the last thing you are likely to see on the envelope is anything related to a debt, most notably the name of the creditor or debt collection agency trying to collect from you.

Why the Secrecy?

So why doesn’t a debt collector at least put their company name on the return address? Because that practice could be in violation of the Fair Debt Collection Practices Act. The FDCPA clearly states a debt collector may “not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt.” Therefore, in order to remain compliant with this section of the law, debt collectors are prohibited from placing any information on the envelope, including their business name that would indicate they are a debt collector or that they are attempting to collect a debt.

But while the outside of the envelope may be vague and inconspicuous, the contents inside the envelope are more descriptive and important. Debt collection notices are often personal, confidential and time-sensitive in nature. These letters provide information the consumer needs to know as it relates to their debt, including the status of the debt and what might happen if the debt isn’t resolved soon. Debt collection letters also contain specific disclosures that provide information about how consumers can dispute their debt along with other state-specific disclosures the consumer should be aware of. In addition, when consumers postdate payments with debt collectors, debt collectors may be required to send payment reminders which would also be sent within these envelopes as well.

Letters are one of the biggest expenses for debt collectors, so they want to make sure the letters are being delivered to the right consumer — and being opened by that consumer, as well. However, debt collectors must stay in compliance with the FDCPA and ultimately must hope consumers who receive the letters are going to first open the envelope, read the letter and establish communication with the debt collector so the debt can be resolved. With more consumers preferring to communicate with debt collectors non-verbally, letters will continue to play an integral part of the debt collection and resolution process. So the next time you get a piece of mail that you may not want to open because you don’t recognize the return address, be sure to at least take the time to open the envelope to see whether it contains personal, confidential and time-sensitive information such as a debt collection notice.