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We are planning to mail a collection letter to a customer with the following verbiage. “The bank now intends to pursue whatever legal action is available to collect your debt. In addition, your failure to provide the vehicle transfer documents as agreed in your loan covenants and purchase of an alternate vehicle without notifying the bank might possibly result in a criminal action against you.” I know in our recent webinar over Fair Debit Collection practices it states we cannot threaten to take any action that cannot legally be taken or that is not intended to be taken. We plan to take legal action but we want to make sure this verbiage would be in compliance. Thank you!
I’ll throw out some question that will hopefully help you make a determination… Are all of the statements you’re making true? Are you legally permitted to take the actions against the consumer that you’ve indiated?( Have you consulted with an attorney to ensure all statements reflect actual actions you can take.)
Similar to doing a marketing review, I would put any collection communication through a UDAAP review. The CFPB or your regulator’s exam procedures would be a good place to start.
Finally, we have a list of lending enforcement actions on the resources page of our website under “Enforcement/Lending Compliance Enforcement Actions Chart” https://mycomplianceresource.com/ultimate-compliance-resource/#toggleInfoSection. There are cased in those where UDAAP is cited for collection practices. There should be links to the enforcement action so you can dig in to find what some of their specific issues were. Generally speaking, many of them including harrasing behaviour, threatening actions that were permitted/legal, taking possession of personal items that belong to the consumer, disclosing the debt to third parties, etc, but reviewing these would give you an idea of what has caused others problems.
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