By Creditor’s Rights & Bankruptcy and Litigation Practice Groups
On October 30, 2020, the Consumer Financial Protection Bureau (“CFPB”) issued a new rule regarding its implementation of the Fair Debt Collection Practices Act (“FDCPA”). The CFPB’s final rule (“Regulation F”) clarifies how the provisions of the FDCPA apply to modern methods of communication, including email, text messages, and telephone calls, and specifies when such communications by debt collectors may cross the line into improper debt collection practices. Nothing in Regulation F alters common understandings about who is or is not subject to the FDCPA.
The FDCPA prohibits debt collectors from using harassment or abuse, false or misleading representations, and unfair practices in debt collection. In general, Regulation F clarifies which actions or communications by a debt collector may presumptively violate the FDCPA. For example, a debt collector commits a presumed violation if it places a telephone call to a consumer more than seven times within a seven-day period, or within seven days after engaging in a telephone conversation with the consumer. Relatedly, a debt collector is presumed to comply with the FDCPA’s prohibition on continuous calls if the debt collector places a telephone call, not in excess of either of those limitations.
Regulation F also includes restrictions on the times and places at which a debt collector may communicate with a consumer. Emails and text messages from a debt collector must include instructions for a reasonable and simple method by which a consumer can opt-out of receiving further emails or text messages.
Regulation F provides debt collectors with a safe harbor from civil liability for an unintentional third-party disclosure if the debt collector follows the procedures identified in the rule when communicating with a consumer by email or text message. It also contains specific provisions clarifying a debt collector’s obligation to retain certain records.
Finally, Regulation F reserves certain sections for a disclosure-focused final rule that will clarify the information which a debt collector must provide to a consumer at the outset of debt collection, including a model notice containing the information required by the FDCPA §809(a). The CFPB is expected to finalize this rule before the end of the year.
This list is a brief overview of the recent changes to the CFPB’s rules. If you have any questions about how these rules apply to your business or want help complying with these rules, please feel free to contact Jared Anderson or another member of the Financial Services Practice Group.