CFPB Summary: Final Rule re: Debt Collection Practices (Communications)
12 CFR Part 1006
Prepared by the Legislative and Regulatory Affairs Division
January 2021
The Bureau issued a final rule to revise Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA) that addresses, among other things, communications in connection with debt collection and prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection. The final rule focuses on debt collection communications and related practices.
The rule becomes effective on November 30, 2021. The final rule can be found here.
Summary
Congress passed the FDCPA to eliminate abusive debt collection practices by debt collectors, to ensure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged and to promote consistent State action to protect consumers against debt collection abuses. The FDCPA established specific consumer protections, enabling consumers to establish controls on when/how debt collectors contact them, establishing privacy protections surrounding the collection of debts, and protecting consumers from certain collection practices.
The Bureau is adopting this final rule to implement and interpret those consumer protections, including by clarifying how they apply to newer communication technologies. In addition, the Bureau intends to issue a disclosure-focused final rule to implement and interpret the FDCPA’s requirements regarding consumer disclosures and certain related consumer protections.
The final rule has four subparts. Subpart A contains generally applicable provisions such as definitions that apply throughout the regulation. Subpart B contains rules for FDCPA debt collectors. Subpart C is reserved for any future debt collection rulemakings. Subpart D contains certain miscellaneous provisions.
To address such concerns about debt collection communications and to clarify the application of the FDCPA to newer communication technologies that have developed since the act’s passage, the final rule:
- Clarifies restrictions on the times and places at which a debt collector may communicate with a consumer, including by clarifying that a consumer need not use specific words to assert that a time or place is inconvenient for debt collection communications.
- Clarifies that a consumer may restrict the media through which a debt collector communicates by designating a particular medium, such as email, as one that cannot be used for debt collection communications.
- Clarifies that a debt collector is presumed to violate the FDCPA’s prohibition on repeated or continuous telephone calls if the debt collector places a telephone calls to a person more than seven times within a seven-day period or within seven days after engaging in a telephone conversation with the person. It also clarifies that a debt collector is presumed to comply with that prohibition if the debt collector places a telephone call not in excess of either of those telephone call frequencies. The final rule also provides non-exhaustive lists of factors that may be used to rebut the presumption of compliance or of a violation.
- Clarifies that newer communication technologies, such as emails and text messages, may be used in debt collection, with certain limitations to protect consumer privacy and to protect consumers from harassment or abuse, false or misleading representations, or unfair practices.
- Provides that a debt collector may obtain 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.
- Defines a new term – “limited content message,” which identifies what information a debt collector must and may include in a voicemail message for consumers in order for the message to not be deemed a communication under the FDCPA. This definition permits a debt collector to leave a voicemail message for a consumer that is not a communication under the FDCPA or the final rule and therefore is not subject to certain requirements or restrictions.
- Clarifies standards a debt collector must meet when sending the required disclosures in writing or electronically.
- Addresses certain other consumer protection concerns such as clarifying debt collectors’ obligation to retain records evidencing compliance or noncompliance with the FDCPA and Regulation F; prohibiting the sale, transfer for consideration or placement for collection of certain debts; and clarifying debt collectors’ obligations when responding to duplicative disputes.
- Clarifies that the personal representative of a deceased consumer’s estate is a consumer for purposes of Section 1006.6, which addresses communications in connection with debt collection. In addition, the rule also clarifies how a debt collector may locate the personal representative of a deceased consumer’s estate.
Disclosure Focused Final Rule
The Bureau is reserving certain section of Regulation F for a disclosure-focused final rule that clarifies the information that a debt collector must provide to a consumer at the outset of debt collection and to provide a model notice containing the information required by the FDCPA Section 809(a). The Bureau also intends to address in the disclosure focused final rule consumer pro