MINNEAPOLIS -

ACA International sent a letter to the Federal Communications Commission last week asking the agency to revise a recently released consumer alert cautioning consumers against financial scams.

Officials explained the alert, issued by the FCC on Jan. 10, contains a subhead which states, “Beware of Debt Collection and Other Financial Service Scams, Especially During Post-Holiday Bill Paying Season.” ACA International insisted the alert then describes activity that is associated with debt relief companies, not debt collection.  

In the letter, ACA International stressed that it makes clear that while the organization applauds the FCC’s efforts to protect consumers from the harms associated with “debt relief or refinancing” scammers, “the commission seems to confuse the debt relief market with the different debt collection market in the alert given the disconnect between the subhead and the body of the alert.”

ACA explained to the FCC that debt collection and debt relief services are completely different: they play different roles in the economy, they offer different benefits, they interact with consumers differently, and they are regulated in different ways.  As a result, debt collection and debt relief are not synonymous and caution must be used to ensure each is being referred to and described in the correct manner to minimize confusion.

“For example, ACA pointed out that unlike debt relief services whose value to a consumer is unknown, the debt collection industry provides lenders with the latitude to continue extending credit to consumers, helps businesses that provide goods or services on credit remain solvent and prevents passing the costs of both monetary loss and risk on to consumers,” officials said.

ACA International also explained that debt collectors have enormous federal, state, and local compliance obligations that go well beyond the requirements applicable to the relatively new debt relief industry.

“Given the substantial differences between debt collection and debt relief services, and the lack of activity related to debt collection in the body of the alert, ACA strongly urged the FCC to modify the subhead to delete the reference to ‘debt collection,’” officials said.

“ACA believes this change is important to increase the clarity of the alert and to also reduce its current misleading nature,” they continued.