U.S. consumers send 80 billion text messages a month on their cell phones, according to Maynard, Mass.-based Mercator Advisory Group Inc. The number has not escaped the attention of financial service companies, which see "texting" as a way to build communications with customers.

Financial service providers send 12 million text messages per day, reports Mercator. Most of the messages are  service-related messages permitted by the accountholder – such as alerts sent to notify customers when a transaction has occurred or that a checking account is close to being overdrawn.

"Texting is a channel that consumers consider less intrusive, gets right to the point, and can be used to complement traditional communications channels," John Messall, director of customer finance services at Sprint Nextel, tells Collections & Credit Risk.

The collection industry is concerned, however, that the Fair Debt Collection Practices Act (FDCPA) and state laws are too antiquated to fairly govern the use of text messaging as a means for contacting debtors.

"The biggest concern is that the [FDCPA] and state laws really don't address how to use these new methods of communications," says David D. Cherner, legal counsel and legislative director of state government affairs at ACA International, a trade group for collectors.

For more about this subject and how the collection industry is handling concerns, see the August issue of Collections & Credit Risk.


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