Fair Debt Collection
Tennessee Fair Debt Collection Statute
Tennessee Fair Debt Collection Practices Act 62-20-101. Short title. —
This chapter shall be known and may be cited as the “Tennessee Collection Service Act.”
Tennessee Fair Debt Collection Practices Act 62-20-102. Chapter definitions. —
As used in this chapter, unless the context otherwise requires:
[Acts 1981, ch. 170, § 2; modified; Acts 1988, ch. 823, §§ 1-5.](1) “Board” means the Tennessee collection service board;
(2) “Client” means any person who retains the services of a collection service, and for such services directly provides the fee, commission or other compensation;
(3) “Collection service” means any person who, directly or indirectly, for a fee, commission, or other compensation, offers to a client or prospective client the service of collecting, or purchasing for collection, accounts, bills, notes or other indebtedness due such client for various debtors. “Collection service” includes, but is not limited to:
(A) Any deputy sheriff, constable or other individual who, in the course of that person’s duties, accepts any compensation other than that fixed by statute in connection with the collection of an account;
(B) Any person who, in the process of collecting that person’s own accounts, uses or causes to be used any fictitious name which would indicate to the debtor that a third party is handling the accounts;
(C) Any person who offers for sale, gives away, or uses any letter or form designed for use in the collection of accounts which deceives the receiver into believing that an account is in the hands of a third party, even though the letter or form may instruct the debtor to pay directly to the debtor’s creditor; and
(D) Any person who engages in the solicitation of claims in this state for purchase or collection;
(4) “Collection service license” means a license granted to a collection service;
(5) “Financially responsible” means capable, as demonstrated to the board’s satisfaction, of sound financial management and fiscal discretion. The board may deem to be not financially responsible any person who:
(A) Submits a balance sheet reflecting liabilities in excess of assets;
(B) Is unable to pay debts as they mature;
(C) Submits materially inaccurate financial information; or
(D) Issues a check to a client without sufficient funds for the payment of such check in full;
(6) “Location manager” means an individual who is employed full time at a location of a collection service and designated to be in active and responsible charge of the business of a collection service at the location at which the individual is employed;
(7) “Location manager license” means a license granted to a location manager, pursuant to § 62-20-108.
(8) “Person” means an individual, firm, corporation, association or other legal entity; and
(9) “Solicitor” means any individual who is employed by, or under contract with, a collection service to solicit accounts or sell collection service forms or systems on its behalf.
Tennessee Fair Debt Collection Practices Act 62-20-103. Exemptions. —
(a) The provisions of this chapter do not apply to:
(1) Any person handling claims, accounts or collections under order of any court;
(2) Attorneys at law; or
(3) Any person engaged in the collection of indebtedness incurred in the normal course of business, or the business of a parent, subsidiary, or affiliated firm or corporation; however, no person who is or represents such person to be a collection service is exempt from this chapter.
(b) Nothing contained within this chapter shall be construed to require an individual or business entity, which collects only the individual’s or its own unpaid accounts, to submit to licensure or regulation by the collection service board.
Tennessee Fair Debt Collection Practices Act 62-20-104. Collection service board. —
(a) There is hereby created the Tennessee collection service board, which shall consist of five (5) members appointed by the governor. Members shall serve for a period of three (3) years, except that appointments made to fill unexpired terms shall be for the period of such unexpired terms.
(b) Members of this board shall be residents of this state for at least five (5) years prior to their appointment. At least two (2), but not more than three (3), of the members shall be engaged in the collection service industry. In making appointments to the board, the governor shall strive to ensure that at least one (1) person serving on the board is sixty (60) years of age or older and that at least one (1) person serving on the board is a member of a racial minority.
(c) The board may hold such meetings as it may deem necessary for the purpose of transacting any business authorized under this chapter. All members of the board shall be duly notified of the time and place of each meeting. A majority of the board constitutes a quorum at any such meeting.
(d) Each member of the board shall receive the sum of fifty dollars ($50.00) for each meeting of the board attended by the member. Each board member shall also be reimbursed for actual travel and other expenses incurred by the member in attending each meeting of the board and in performing any other duties provided for in this chapter. All reimbursement for such expenses shall be in accordance with the provisions of the comprehensive travel regulations as promulgated by the department of finance and administration and approved by the attorney general and reporter.
(e) The board shall annually select from its members a chair, vice chair, and secretary. No one (1) member of the board shall hold more than one (1) such office.
(f) All questions, submissions or requests directed to the board shall be addressed to the board’s office in Nashville.
(g) The board shall promulgate rules relating to the general conduct of collection service business which are consistent with recognized business practice and the provisions of this chapter.
(h) The director of the division of regulatory boards in the department of commerce and insurance, or the director’s designee, shall serve as executive director of the board, and shall perform all administrative functions for the board. The executive director of the board shall keep an accurate record of its proceedings and transactions.
(i) Members of the board, while acting in good faith, shall not be subject to civil liability relative to the performance of duties delegated to the board by this chapter.
Tennessee Fair Debt Collection Practices Act 62-20-105. License requirement. —
(a) No person shall commence, conduct, or operate any collection service business in this state unless such person holds a valid collection service license issued by the board under this chapter, or prior state law.
(b) Regular employees of licensed collection services need not procure a separate collection service license.
(c) A licensed collection service maintaining more than one (1) place of business within the state shall register each place of business with reference to its specific location, name and purpose upon application for license and upon subsequent renewals of the license. The fees for each location for registration and renewal shall be established by the board.
Tennessee Fair Debt Collection Practices Act 62-20-106. Application for license. —
An application for a collection service license shall be submitted on the form prescribed by the board, and shall be accompanied by:
(1) A nonrefundable application fee as set by the board;
(2) A current personal or corporate financial statement prepared by a licensed public accountant or certified public accountant;
(3) (A) A surety bond executed by the applicant and a surety company authorized to do business in this state, made payable to the state of Tennessee. The amount of this surety bond shall be pro rated and based on the certified number of employees per collection agency as follows:
(i) 1-4 employees — fifteen thousand dollars ($15,000);
(ii) 5-9 employees — twenty thousand dollars ($20,000);
(iii) 10 or more employees — twenty-five thousand dollars ($25,000); or
(iv) Instead of such bond, a certificate of deposit in the sums as outlined in this subdivision which shall be assigned to the board;
(B) Such bond or assignment of certificate of deposit shall be conditioned that the applicant shall faithfully and truly perform all agreements entered into with its clients accounting for the net proceeds of all collections in accordance with this chapter; and
(4) A satisfactory proposed budget of monthly operating expenses for the first six (6) months of operation.
Tennessee Fair Debt Collection Practices Act 62-20-107. Qualifications of applicant. —
No license to conduct or operate a collection service business in this state shall be issued to any person:
(1) Who is not trustworthy;
(2) Who does not have a proven reputation for honesty and fair dealings;
(3) Who is not financially responsible;
(4) Who, in the opinion of the board, is not competent to engage in the collection of the accounts and claims of others;
(5) Who, within the past seven (7) years, has been convicted in any court of fraud or any felony, or had judgment entered against such person in any court for failure to account to a client for money or property collected;
(6) Whose license to practice law has been suspended or revoked within the past seven (7) years;
(7) Who, unless a nonresident applicant, does not maintain in this state a regular office in which are kept complete records of collections and claims handled for clients and against debtors residing in this state;
(8) Who, unless a nonresident applicant, does not maintain in this state bank accounts with sufficient funds at all times to disburse amounts due clients; and
(9) Who, within the past seven (7) years, has filed a petition under the federal bankruptcy laws or state insolvency laws, or has had a receiver, fiscal agent or similar officer appointed by a court for the person’s business or property.
Tennessee Fair Debt Collection Practices Act 62-20-108. Location manager — Notice to board. —
(a) (1) Every collection service shall have, for each location at which it conducts business, a location manager who has submitted an application on a form prescribed by the board, accompanied by a nonrefundable application fee as set by the board, and has demonstrated to the satisfaction of the board that the applicant:
(A) In the event such application as a location manager is made on or after July 1, 1988, has received a high school diploma, or, in lieu thereof, has received a General Educational Development (G.E.D.) diploma;
(B) In the event such application as a location manager is made on or after July 1, 1988, has completed an in-person interview before the board; provided, that the board may, in its discretion, waive the requirement of a personal interview;
(C) Has passed an examination approved by the board; and
(D) In the event such application as a location manager is made on or after July 1, 1988, has been employed by a licensed collection service in a position directly related to the collection of debts and/or the solicitation of accounts receivables for a period of not less than one (1) year within a three-year period of the date on which the examination was administered; or, in the alternative, has demonstrated to the satisfaction of the board that the applicant has adequate experience, within a three-year period of the date on which the examination was administered, in a business which is governed by laws similar to those laws which govern a licensed collection service, including, but not limited to, the Fair Debt Collection Practices Act, as amended, in a position directly related to the collection of debts and/or the management of credit or accounts receivables, such that the applicant is competent to discharge properly the responsibilities of a location manager.
(2) Such examination shall be composed, administered, and graded by an outside, independent educational testing organization. The final selection and approval of such testing organization and the examination shall be made by the commissioner of commerce and insurance and the collection service board.
(b) (1) The examination shall cover such subjects as the board may deem necessary for a proper evaluation of the examinee’s competence to operate a collection service business.
(2) In case of failure, the fee for each reexamination shall be set by the board.
(3) No person shall be administered the location manager examination as provided in this subsection (b) more than three (3) consecutive times. In the event a person fails the location manager examination three (3) consecutive times, that person must wait one (1) year following the third failure before taking the examination again. The location manager examination shall be administered approximately every one hundred twenty (120) days so that the examination is administered three (3) times annually.
(c) (1) Any person who meets the requirements of subsection (a) shall be issued a license to act as a location manager.
(2) The location manager license shall be prominently displayed at all times at the location of the collection service at which the licensee acts as location manager.
(d) (1) A location manager license issued pursuant to this section shall be revoked if, within a two-year period prior to the date of such revocation, the licensee:
(A) Did not act as a location manager;
(B) Did not work on a full-time basis in a licensed collection service; or
(C) Was not employed by an attorney-at-law in a position directly related to the collection of debts and/or the solicitation of accounts receivable.
(2) A location manager license issued pursuant to this section shall be revoked if the licensee fails to renew the location manager license as provided for in § 62-20-112.
(e) The board shall be promptly notified in writing of any change in address, management, location manager, or ownership of a collection service business.
Tennessee Fair Debt Collection Practices Act 62-20-109. License fee and display. —
(a) The board shall grant a collection service license to a qualified applicant upon receipt of a fee as set by the board, such fee shall not be prorated for any portion of a year.
(b) The collection service license shall be prominently displayed at all times at the licensee’s place of business.
Tennessee Fair Debt Collection Practices Act 62-20-110. Bond. —
(a) The bond posted or the certificate of deposit assigned in accordance with this chapter shall be in full force and effect during all periods and in all places and areas in which the licensee is doing business within this state as a collection service.
(b) If any collection service violates the conditions of such bond or certificate of deposit, the injured client may maintain an action in such client’s own name on the bond or certificate of deposit of such collection service in any court of competent jurisdiction.
(c) In no event shall the aggregate liability of the surety exceed the amount of such bond, nor shall the board or this state be liable to any client relative to an assigned certificate of deposit.
Tennessee Fair Debt Collection Practices Act 62-20-111. Solicitors’ identification cards. —
(a) (1) No person may act as a solicitor for any collection service unless such person possesses a valid solicitor’s identification card issued by the board to such collection service.
(2) Identification cards shall be obtainable by written application of the collection service licensee, accompanied by an annual fee as set by the board.
(3) Such cards shall be the property of, and in the name of, the collection service licensee, who may transfer them from one (1) of such collection service licensee’s solicitors to another.
(4) The collection service licensee shall be responsible for the proper training and conduct of each solicitor acting in such collection service licensee’s behalf.
(b) In order to protect the rights of creditors, all letters of collection or notices of collection from a collection agency to a debtor shall contain language stating that the collection agency is licensed by the collection service board of the department of commerce and insurance.
Tennessee Fair Debt Collection Practices Act 62-20-112. Expiration and renewal of licenses. —
(a) All licenses and identification cards shall expire on the December 31 following the date of issuance or renewal.
(b) Application for renewal of a collection service license shall be submitted to the board prior to such expiration date, and shall be accompanied by:
(1) A fee as set by the board;
(2) Evidence of renewal of the bond or certificate of deposit under the terms required by this chapter;
(3) A current balance sheet prepared by a licensed public accountant or certified public accountant; and
(4) Proof that all taxes that are applicable to the collection service licensee and that are then due and payable have been paid.
(c) All licenses shall be subject to late renewal for a period of sixty (60) days following their expiration date by payment of the prescribed fee plus a penalty as set by the board.
(d) Application for renewal of a location manager license shall be submitted to the board prior to such expiration date, and shall be accompanied by:
(1) A renewal fee as set by the board; and
(2) A completed and executed renewal form as provided by the board.
Tennessee Fair Debt Collection Practices Act 62-20-113. Licenses nontransferable. —
(a) No license shall be transferable to another person.
(b) Upon change of ownership of a collection service, the new owner shall apply for and obtain a new collection service license before commencing or continuing business.
Tennessee Fair Debt Collection Practices Act 62-20-114. Requirements of collection service licensees. —
Each collection service licensee shall:
(1) Keep and retain for a period of three (3) years accurate individual records of collections, including the amount and date of payment, and the names of the debtor and creditor;
(2) Issue, upon request, individual collection receipts, showing the amount and date of payment, names of the debtor and creditor, and the balance (if any) remaining unpaid;
(3) Maintain a separate fiduciary or trust bank account with sufficient funds at all times to disburse such amounts as due all clients; and
(4) Maintain records and books reflecting the true condition of bank accounts at the end of each calendar month.
Tennessee Fair Debt Collection Practices Act 62-20-115. Investigations — Denial, revocation or suspension of licenses. —
(a) (1) The board may, upon its own motion, or shall, upon the sworn complaint in writing of any person, investigate any collection service and/or licensee operating in the state.
(2) The board shall transmit any such complaint within fifteen (15) days of receipt thereof to the accused licensee by registered or certified mail.
(3) Such licensee shall, within twenty (20) days, file with the board the licensee’s sworn answer to the complaint.
(b) The board may suspend, revoke or refuse to renew any license held under the provisions of this chapter, for any of the following causes:
(1) Obtaining a license through misrepresentation or fraud;
(2) Collecting or attempting to collect from the debtor any fee, commission or other compensation not provided by law for collection services rendered to a client, except that a collection service may recover from debtors reasonable charges imposed by banks for processing insufficient fund checks; provided, that such charges do not exceed nine dollars ($9.00) per check.
(3) Failing to report and pay to a client the net proceeds of all collections made during a calendar month within thirty (30) days, unless otherwise provided by mutual agreement between the licensee and the client;
(4) Violating, or cooperating with others in violating, any provision of this chapter, or any rule lawfully promulgated by the board;
(5) Failing to comply with any applicable state or federal law or regulation pertaining to the credit and collection industry; and
(6) Any cause for which issuance of a license could have been refused had it existed and been known to the board at the time of issuance.
Tennessee Fair Debt Collection Practices Act 62-20-115. Investigations — Denial, revocation or suspension of licenses. —
(a) (1) The board may, upon its own motion, or shall, upon the sworn complaint in writing of any person, investigate any collection service and/or licensee operating in the state.
(2) The board shall transmit any such complaint within fifteen (15) days of receipt thereof to the accused licensee by registered or certified mail.
(3) Such licensee shall, within twenty (20) days, file with the board the licensee’s sworn answer to the complaint.
(b) The board may suspend, revoke or refuse to renew any license held under the provisions of this chapter, for any of the following causes:
(1) Obtaining a license through misrepresentation or fraud;
(2) Collecting or attempting to collect from the debtor any fee, commission or other compensation not provided by law for collection services rendered to a client, except that a collection service may recover from debtors reasonable charges imposed by banks for processing insufficient fund checks; provided, that such charges do not exceed nine dollars ($9.00) per check.
(3) Failing to report and pay to a client the net proceeds of all collections made during a calendar month within thirty (30) days, unless otherwise provided by mutual agreement between the licensee and the client;
(4) Violating, or cooperating with others in violating, any provision of this chapter, or any rule lawfully promulgated by the board;
(5) Failing to comply with any applicable state or federal law or regulation pertaining to the credit and collection industry; and
(6) Any cause for which issuance of a license could have been refused had it existed and been known to the board at the time of issuance.
Tennessee Fair Debt Collection Practices Act 62-20-116. Actions required at expiration or revocation of license. —
(a) Upon the expiration or revocation of any license held under the provisions of this chapter, the licensee:
(1) Shall within ninety (90) days return or assign all uncollected accounts to the licensee’s clients or their order;
(2) Shall not charge or receive any fee or compensation for the return or assignment of any such accounts;
(3) Shall not charge or receive any fee or compensation on any moneys received or collected subsequent to such expiration, suspension or revocation; and
(4) Shall within ninety (90) days remit all moneys to the owners of the accounts on which such moneys were paid.
(b) This section shall not be construed to:
(1) Prohibit a bulk sale of the business, assets, and good will of a collection service whose license becomes invalid;
(2) Deprive a licensee of the privilege of late renewal granted by § 62-20-112; or
(3) Prohibit the continuation of business at a location of a licensed collection service without a licensed location manager for a period of not more than one (1) year during which time the collection service licensee shall obtain a licensed location manager for such location.
Tennessee Fair Debt Collection Practices Act 62-20-117. Reciprocity — Service of process on nonresidents — Default judgments. —
(a) A nonresident of this state who is regularly engaged in the collection business in another state may obtain a license as a collection service in this state by complying with the provisions of this chapter; provided, that the nonresident applicant maintains a place of business in such other state and such state offers the same privilege to the licensees of this state.
(b) (1) Every nonresident applicant shall file an irrevocable consent that legal action may be commenced against the nonresident applicant in the proper court of any county of this state in which a cause of action may arise, in which the plaintiff may reside, by service of process or pleading authorized by the laws of this state, or by any member of the board, the consent stipulating that the service of process or pleading shall be taken in all courts to be valid and binding as if personal service had been made upon the nonresident licensee in this state. The consent shall be duly acknowledged, and, if made by a corporation, shall be authenticated by its seal.
(2) Any service of process or pleading shall be served on the secretary of the board by filing duplicate copies, one (1) of which shall be filed in the office of the board and the other forwarded by registered mail to the last known principal address of the nonresident licensee against whom such process or pleading is directed.
(3) No default in any such action shall be taken, except upon affidavit certification of the board or the secretary thereof that a copy of the process or pleading was mailed to the defendant as herein provided. No default judgment shall be taken in any such action or proceeding until thirty (30) days after the day of mailing of process or pleading to the defendant.
Tennessee Fair Debt Collection Practices Act 62-20-118. User responsible for ascertaining service is licensed. —
Any person who places an account with a collection service is responsible for determining that such service is licensed as required by this chapter.
Tennessee Fair Debt Collection Practices Act 62-20-119. Confidentiality of information. —
Any financial information submitted by applicants for, or holders of, licenses pursuant to this chapter shall be treated as confidential, and shall be used by the board only for the purpose of determining qualifications to engage in the collection service business.
Tennessee Fair Debt Collection Practices Act 62-20-120. Unauthorized acts. —
Nothing in this chapter shall be construed to permit:
(1) The use or sale of forms which simulate legal forms so as to deceive a debtor or the general public; or
(2) The unauthorized practice of law.
Tennessee Fair Debt Collection Practices Act 62-20-121. Temporary retirement. —
(a) Any licensee may temporarily retire the licensee’s license for a period of three (3) years by giving written notice of such intent and paying each year an annual retirement fee of ten dollars ($10.00) to the board.
(b) Any license not activated within the three-year period becomes invalid.
Tennessee Fair Debt Collection Practices Act 62-20-122. Hearings and judicial review. —
The provisions of the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, govern all matters and procedures respecting the hearing and judicial review of any contested case, as defined therein, arising under this chapter.
Tennessee Fair Debt Collection Practices Act 62-20-123. Violations. —
A willful violation of this chapter, or of any rule lawfully promulgated thereunder, is a Class C misdemeanor.
No location manager license shall be issued to any person:
(1) Who is not trustworthy;
(2) Who does not have a proven reputation for honesty and fair dealings;
(3) Who is not financially responsible;
(4) Who has, within the past seven (7) years, been convicted in any court of fraud or any felony, or had judgment entered against such location manager in any court for failure to account to any client for money or property collected;
(5) Whose license to practice law has been suspended or revoked within the past seven (7) years; or
(6) Who, within the past seven (7) years, has filed a petition under the federal bankruptcy laws or state insolvency laws, or has had a receiver, fiscal agent or similar officer appointed by a court for the person’s business or property.
Tennessee Fair Debt Collection Practices Act 62-20-126. Loss of location manager. —
In the event that a location of a licensed collection service loses a location manager for any reason, the collection service licensee shall obtain a licensed location manager for such location. The collection service licensee must obtain a licensed location manager for such location within one (1) year of the date of the event responsible for such location being without a licensed location manager. For purposes of this section, the board may, in its discretion, make provisions for special testing sessions for location manager applicants.
Tennessee Fair Debt Collection Practices Act 62-20-127. Prerequisites to assignment of accounts — Commencement of litigation — Application of payments. —
(a) A collection service holding a valid license under this chapter may take assignment of accounts, bills, notes or other indebtedness held by another person or entity, for the purpose of billing, collecting or filing suit in the collection service licensee’s own name, as the real party in interest, if all the following requirements have been met:
(1) The assignment was voluntary, properly executed, and acknowledged by the person or entity making the assignment to the collection service licensee;
(2) The original agreement between the creditor and the debtor does not prohibit assignments;
(3) The assignment was manifested by a written agreement stating the effective date of the assignment and the consideration paid or given, if any, for the assignment. The written agreement must also disclose that the collection service licensee may, for purposes of litigation, consolidate the assigned account, bill, note or other indebtedness with those of other creditors against the individual debtor or codebtors; and
(4) A collection service licensee bringing suit in its own name as an assignee may submit an affidavit of sworn account that has been executed under oath by the assigning party or by a person qualified to execute a sworn account pursuant to § 24-5-107(a). A copy of the sworn account shall be filed with the court for service upon the debtor.
(b) A collection service licensee may commence litigation for the collection of an assigned account, bill, note or other indebtedness in a court of competent jurisdiction located in any of the following counties:
(1) The county in which the debtor signed the account, bill, note or other indebtedness sued upon;
(2) In the case of consolidated accounts that all arose from the same county, the county in which all of the consolidated accounts, bills, notes or other indebtednesses arose; or
(3) The county in which the debtor resides at the commencement of the action.
(c) No collection service licensee shall commence any litigation authorized by this section, unless the collection service licensee appears by an attorney admitted to practice law in the state of Tennessee.
(d) (1) For purposes of commencing litigation, a collection service licensee that has taken an assignment or assignments pursuant to this section may consolidate the assigned accounts, bills, notes or other indebtedness of one or more creditors against one individual debtor or co-debtors, in one case. Each assigned account, bill, note or indebtedness must be separately identified and pled in any consolidated action authorized by this section. The individual amount of each account, bill, note or other indebtedness that forms the basis for any consolidated action shall not exceed two hundred dollars ($200) each, as identified and pled by the collection service licensee, exclusive of court costs, attorney fees and interest that may have accrued before the filing of the consolidated action. The aggregate amount of consolidated accounts, bills, notes and other indebtedness in any one case shall not exceed five hundred dollars ($500), as identified and pled by the collection service licensee, exclusive of court costs, attorney fees and interest that may have accrued before the filing of the consolidated action. Court costs shall be assessed to the losing party. Interest and attorney fees and reimbursable expenses shall be assessed against the losing party, if provided in any of the consolidated accounts, bills, notes or other indebtedness, or as otherwise permitted or required by law.
(2) If a debtor or co-debtor files a sworn denial or otherwise raises a dispute concerning any account, bill, note or other evidence of indebtedness, the court shall dismiss the account, bill, note or other evidence of indebtedness, without prejudice. The collection service licensee may bring a separate case for any such disputed account, bill, note or other evidence of indebtedness within one (1) year of dismissal; provided, however, that the disputed account, bill, note or other evidence of indebtedness cannot be consolidated with any other account, bill, note or other evidence of indebtedness.
(3) For any account on which an affidavit of sworn account is filed pursuant to § 24-5-107(a), a separate affidavit shall be filed for each account in a consolidated action.
(e) Nothing in this section relieves a collection service licensee from complying with the “Fair Debt Collection Practices Act”, 15 U.S.C. § 1692, as amended, or deprives any debtor of the right to assert defenses as provided in that act.
(f) On the face of any warrant or other pleading filed in any consolidated action, or in an attachment thereto, the collection service licensee shall state the order in which the creditor intends to apply payments received on any judgment obtained in the consolidated action. The collection service licensee shall also state that payments will be applied as stated unless the debtor instructs otherwise in writing or the court orders otherwise.