The Federal Trade Commission has finalized a policy statement clarifying that the agency won’t take enforcement action under the Fair Debt Collection Practices Act (FDCPA) or the FTC Act against companies that are trying to collect the debts of deceased consumers, if the companies communicate with someone who is authorized to pay debts from the estate of the deceased.
The policy statement also emphasizes that debt collectors might not mislead relatives to believe that they are personally liable for a deceased consumer’s debts, or use other deceptive or abusive tactics. Family members typically are not obligated to pay the debts of a deceased relative from their own assets. The FDCPA limits whom debt collectors can contact after a loved one has died to people such as the deceased person’s spouse and the executor or administrator of the deceased person’s estate.
Since the FDCPA was enacted in 1977, state probate laws have changed, and now, less formal procedures often govern the appointment or selection of those who are responsible for the disposition of the estate. In various instances, there might be no formal executor or administrator of an estate. In the enforcement policy statement, the Commission looks to reconcile the FDCPA’s requirements with current trends in state probate law.
In keeping with the FTC’s October 2010 proposed policy statement, the final policy statement specifies that the agency will not take law enforcement action under the FDCPA if a debt collector communicates about a deceased person’s debts with that person’s spouse, the executor or administrator of the deceased person’s estate, or anyone else who is authorized to pay the debts from assets in the estate.
The final policy statement also describes how debt collectors might communicate with family members and others to locate someone who is authorized to pay the deceased person’s debts from the estate, and specifies that collectors may not mislead individuals into believing that they have the right to pay the decedent’s debts when they do not.
It also specifies that, in looking to locate someone who is authorized to pay the deceased person’s debts from the estate, collectors aren’t able to reveal or refer to the debts, but can say they wish to discuss payment of the deceased person’s bills. Also, in keeping with the FDCPA’s prohibition on unfair, deceptive, or abusive collection practices, debt collectors may not contact family members and others at unusual or inconvenient times or places.
The policy emphasizes that, in communicating with someone who is authorized to pay the debts from assets of the deceased person’s estate, collectors have avoid creating the misleading impression that the individual is personally liable or could be required to pay using his or her own assets, or assets held jointly with the deceased person.
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