Advisory opinion letter to Mr. Tobin

Dear Mr. Tobin:

We hereby request .the Federal Trade Commission for an Advisory Opinion stating that, assuming the propriety of all other aspects of our client’s debt collection activities, the fact that it locates its offices on or adjacent to the offices of its clients would not in itself result in a violation of the Guides Against Debt Collection Deception, 16 C.F.R. §237, or Section 5 of the Federal Trade Commission Act, 15 U.S.C. §45.

1842 FEDERAL TRADE COMMISSION DECISIONS
83 F.T.C.
(a). Present Activities

We represent Debt Collectors, Inc., (“DCI”) which is a debt collection ‘agency incorporated in Delaware and qualified to do business in Illinois and Florida. Its numerous clients are completely independent of and unaffiliated with DCI, its officers, directors, stockholders and employees.

DCI performs routine debt collection services that have never been challenged by the Federal Trade Commission, and are clearly permitted under the Commission’s Guides Against Debt Collection Deception. DCI’s services include serving notices, either in writing or by telephone, on slow or delinquent accounts submitted for collection by its clients, collecting funds remitted by such debtors and transmitting such funds to its clients. Delinquent accounts which are not collected by DCI are referred by DCI to DCI’s local agents in the debtors community for further collection efforts.

DCI employs a full-time staff of clerical and supervisory personnel who are unconnected with DCI’s clients. DCI also independently incurs telephone, postage, rent, printing and related business expenses. DCI performs its services on a fee-plus-cost basis, with fees generally based on a fixed amount per month or per account submitted for collection, and with all other expenses incurred by DCI being billed at cost. (b) Proposed Activities Our client now proposes the sole change of placing its personnel performing such lawful debt collection services for a particular client on or adjacent to the premises of the client. The office space required would be leased by DCI from its client or the owner of the building. In nearly all cases the public would have direct access to DCI’s proposed offices.

Closer physical proximity will not in any way affect DCI’s inde pendence, or the pattern of services described above. DCI will retain complete control of and be wholly responsible for the debt collection services as an independent contractor of the client. In fact, in appropriate circumstances, DCI may, and most likely will, perform services for other clients from its offices on the premises of a particular client. DCI will retain its total independence from its clients. DCI’s officers, directors and shareholders will remain independent of the clients. All clients will be required to agree not to hire the employees of DCI. No activities of DCI will in any way suggest that the collection activities are those of the client. DCI will make every effort to present clearly the fact that DCI is independent of its clients and DCI will place on the doors to its offices and on all notices and stationery its corporate name and the phrase “An independent collection agency.”