Final Rules Clarifying the Fair Debt Collection Practices Act & Reg F

The Consumer Financial Protection Bureau (CFPB) recently released details to clarify how the 1977 Fair Debt Collection Practices Act applies to debt collector communications. Let’s take a look at a summary of the newest rules and explanations.

What is defined as a debt collector?

The CFPB’s rules apply to debt collectors which are defined as collection agencies, debt buyers, loan servicers, and collection law firms. More specifically, creditors collecting on debts they originally owned do not qualify as debt collectors. 

Contacting About a Debt

The CFPB’s rules restrain debt collectors from harassing, abusing, using unfair practices, and making false or misleading representations when contacting someone about an alleged owed debt. The following are new specifications about when and where collectors can contact consumers.

7 Calls in 7 Days

Compliance with the CFPB rules prevents a debt collector from calling the same consumer more than seven times within seven consecutive days. Additionally, if a debt collector has a conversation with a person over the phone, the collector is prohibited from calling them again for seven days. The only exception is if the person provides consent directly to the debt collector to place another call within seven days.

Time and Location

Debt collectors are not allowed to try to contact a consumer before 8:00 a.m. or after 9:00 p.m. in their local time zone. Collectors are not allowed to contact a someone at their place of work. The only exception to this rule is if the debt collector has received permission from the consumer or a court of competent jurisdiction to contact outside of the listed times or places.

With TCN’s Natural Language Compliance tool, contact centers can create countless rules to specifically follow regulations and keep their campaigns on track. Rule sets can be assigned to different campaigns to ensure numbers are not called within the seven day period or outside the allowed time frame.

Retaining Records

The CFPB’s rules require debt collectors to keep records showing compliance, starting the day collection activity begins and for three years after the collector’s last activity on the debt. It’s important to note that collectors need to keep telephone recordings of each call made in connection with a debt for three years after the call occurs. 

With TCN’s Voice Recording Storage managing call recordings is smooth and easy.

Reasonable Procedures

The rules establish “reasonable procedures” that allow debt collectors to send emails and text messages to consumers. Let’s take a deeper look at how to communicate through these channels.

Email

With consumer consent, a debt collector is allowed to send emails to a public email address — excluding employer or private domains. This can be done if the consumer uses their email address to communicate with the collector about the debt. Communication with consumers via email is also permitted if the creditor acquired the email from them and the person was notified that the debt was being transferred to the debt collector.

Before a debt collector can send an email, the creditor needs to send the consumer a notice clearly stating the debt is being transferred to the debt collector and a heads up that the collector might use the consumer’s email address to communicate about the debt. This notice must also inform the consumer that others with access to their email might also see the messages. Additionally, the creditor needs to include instructions on how to opt-out of such communications and inform the consumer of the date by which they need to request to opt-out.

If the debt collector obtains the email address from a previous collector, email communication can continue to occur if the prior debt collector used the email to communicate with the consumer and they did not opt-out.

Text Messages

If the consumer directly gave their phone number and consent to be contacted about the debt through text message, both can communicate through text. If doing so, the collector must either renew consent or confirm the number has not been reassigned every 60 days. 

If the consumer initiates communication with the debt collector through text message, the collector is allowed to also send text messages. Every 60 days, the consumer must send a text from their phone number or the collector must confirm that the number has not been reassigned since the last time the consumer sent a text message.

Opt-Out Language

When sending an email or text message to a consumer, the debt collector must include a clear statement describing simple instructions for the consumer to opt-out of further communications by email or text — the option to opt-out must be free of charge.

Limited-Content Message

Under the CFPB’s rules, a voicemail is not subject to the FDCPA’s restrictions on “communications.” A voicemail message may qualify as a “limited-content message” if it includes certain information.

A limited-content message must be a voicemail — other forms of communication such as email or text do not qualify. The limited-content message may only be left for the consumer, not for a third party. Under the FDCPA, a limited-content message qualifies as an “attempt to communicate” but does not count as a “communication.” Adopting the definition of “limited-content message” will allow a debt collector to rely on fewer repeated phone calls while also reducing the risk of third-party disclosure. 

To qualify as a limited-content message, a voicemail must include:

• A business name for the debt collector that does not indicate the collector is in the debt collection business
• The name of whom the consumer can contact to reply
• A request that the consumer replies to the message
• The phone number for the consumer to use to contact the collector

To qualify as a limited-content message, a voicemail may include:

• A greeting
• The date and time of the message
• Suggested dates and times for the consumer to reply
• Explanation that if the consumer replies, they may speak to any of the company’s representatives

TCN is always coming out with new technology and resources to keep your contact center up-to-date and informed with new regulations. Check out the Complete Guide to TCPA Compliance for more information and updates to keep  your contact center in the clear. To learn more about the final rules clarifying the Fair Debt Collection Practices Act, download TCN’s eBook here.