Disclosures and Debt Collection: The Mini-Miranda and the FDCPA

Mike Bevel,
insideARM/CPF

We recently posed a question to Compliance Professional Forum members regarding disclosures on letters:

“Do people put the Mini-miranda on letters that are not attempts to collect?”

Specifically, we were looking for benchmarking information. Do agencies take a different tact depending on the nature of the letter? Do some letters get different mini-Miranda disclosures, or are there variations?

One thing to keep in mind: “mini-Miranda” is industry jargon. A search of the FDCPA for that phrase won’t pull up any hits. It’s a shorthand way to refer to the disclosure obligations contained in 1692e(11):

[The following shall be considered false, deceptive, and misleading:]

“(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.”

CPF Editorial Review Board Member John Bedard of Bedard Law Group suggested:

Often missed by collectors is the importance of this section having two distinct obligations – one obligation to disclose certain information in the initial communication and another distinct obligation to disclose certain information in subsequent communications.  The jargon used by collectors i.e. the “Mini-Miranda” is most often used to refer collectively to both obligations.  Most of the time it makes sense to do that.

It may not always appropriate to include both disclosures in a communication to a consumer.  For example, when sending a consumer written confirmation that their payment is received and there is no longer a balance due (which communication is presumably a subsequent communication) the collector is not required to include the disclosure “This is an attempt to collect a debt and any information obtained will be used for that purpose.”  The reason is because (1) it is not an attempt to collect a debt, and (2) the FDCPA does not require it because the confirmation letter is not the initial communication with the consumer.

Thoughts from readers would be absolutely appreciated. And if you’re worried about confidentiality, you can email me privately: mbevel@insidearm.com. Are you currently putting the (e)11 disclosure on all communications, or are you being selective? How are you auditing to make sure the right disclosures go on the right letters, and how quickly can you fix it when things go wrong?