On Tuesday, May 7, 2019 the Consumer Financial Protection Bureau (CFPB) issued their proposal to amend Regulation F, which incorporates the Fair Debt Collection Practices Act (FDCPA). The proposed rule takes into account the current communication landscape, which vastly differs from when the FDCPA was first enacted. Specifically, it clarifies how debt collectors can communicate with consumers via email and text messages.
The use of text messages, voicemails, and emails is authorized so long as consumers are given the ability to unsubscribe from future communications. However, it introduces a bright-line rule that a debt collector can only call a consumer seven times in seven days for a specific debt. Current rules on communicating at unusual and inconvenient times and places would still apply.
Another key provision includes a validation notice requiring specific information about the debt, such as the account number, an itemization of the debt, and plain language on how to dispute the debt, in addition to a ‘tear-off’ form that consumers could simply mail back, making it easier for consumers to respond to the collection attempt.
The proposed rule provides certainty in areas where there had been great ambiguity and modernizes the FDCPA to better align with today’s technologies, but the potential impact of the individual provisions is still being examined. There is a 90-day comment period to allow for public input, which CFPB Director Kathy Kraninger said the CFPB would carefully consider.
Click for the full text of the CFPB’s proposed rule.
As always, ALAW remains attuned to the latest regulatory changes in our everchanging business environment and will keep you informed of material changes.
As previously reported, creditors’ rights advocates like ALAW have been eagerly awaiting an update to the Federal Debt Collection Practices Act (FDCPA) for clarification on rules which have resulted in substantial fines and lawsuits. This will be the first update to the FDCPA in over 40 years, the biggest question on most minds is whether or not collectors will be able to use email and text messaging to make contact with consumers.
ALAW is hopeful that the new debt collection rules will provide a more favorable business environment for our clients and open respectful lines of communication with younger generations in a way that will benefit all parties.