News & Resources

FTC resolves confusion over deceased debt collection practices

Jul 23, 2011 Mike Garretson

The Federal Trade Commission recently released clarification regarding laws debt collectors must abide by when attempting to collect from someone who is deceased, Statesboro magazine reports. Because many collection firms are not upfront about laws regarding the legal obligations of a relative to pay off the debts of the deceased, it's important for consumers to be aware of the laws. "We definitely tell them," Scott Weltman, of a Cleveland-based law firm that performs deceased collections, told the New York Times. "But is it disclosed upfront - 'Mr. Smith, you definitely don't owe the money'? It's not that blunt." The FTC's clarification of the ruling states that collectors may not mislead family members or others into believing they're liable for paying a descendant's debt. In addition, it notes that an agency cannot reveal the actual debts that need to be paid, contact a relative at unusual or inconvenient times or say an authorized debtor is personally liable for paying off debt using his or her own assets. According to the Times, DCM Services - another agency exclusively focused on deceased collections - provides a three-week training program for employees to learn "empathic active listening" when speaking with relatives of the deceased.