QUESTION
I have been reading about the CFPB’s proposed revisions to
the FDCPA. As our bank’s General Counsel and Compliance Manager, I am updating
our policies for the proposed revisions. There seem to be several areas in
particular that were subject to the amendment, but other areas are kept
virtually intact. My review would go a lot smoother if you could provide some
insight into the specific amendments relating to communications. What are
some of the salient changes in the FDCPA involving communications and notices?
ANSWER
Thank you for your question. The CFPB is active in FDCPA
examination and enforcement. On May 21, 2019, the CFPB proposed amending
Regulation F, the implementing regulation of the Fair Debt Collection Practices
Act (FDCPA), to prescribe the rule governing the activities of debt collectors.
The rule would address (1) communications in connection with debt collection; (2)
interpret and apply prohibitions on harassment or abuse, false or misleading representations,
and unfair practices in debt collection; and (3) clarify requirements for
certain debt collection consumer disclosures. [84 FR 23274 (May 21,
2019)]
The proposed rule would restate the FDCPA’s substantive
provisions largely in the order they appear in the statute, sometimes without
interpretation. Perhaps, the intent may be to enable a reader to consult only
the regulation to view all relevant definitions and substantive provisions.
Regarding communications, the proposed rule would:
- Define a new term, limited content message, to identify what information a debt collector must and may include in a message left for a consumer (with the inclusion of no other information permitted) for the message to be deemed not to be a communication under the FDCPA. This definition would allow a debt collector to leave a message for a consumer without communicating, as defined by the FDCPA, with a person other than the consumer.
- Clarify 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 at time or place is inconvenient for debt collection communications.
- Clarify 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.
- Clarify that, subject to certain exceptions, a debt collector is prohibited from placing a telephone call to a person more than 7 times within a 7-day period or within 7 days after engaging in a telephone conversation with the person.
- Clarify 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 prevent harassment or abuse, false or misleading representations, or unfair practices. For example, the CFPB proposes to require that a debt collector’s emails and text messages include instructions for a consumer to opt out of receiving further emails or text messages.
The FDCPA requires a debt collector to send a written notice
to a consumer, within 5 days of the initial communication, containing certain
information about the debt and actions the consumer may take in response,
unless the information was provided in the initial communication or the
consumer has paid the debt. The proposal would include the following provisions
regarding the information a debt collector must include at the outset of debt
collection, including, if applicable, in a validation notice:
Debt collectors must provide information about the debt and
the consumer’s rights with respect to the debt, including prompts that a
consumer may use to dispute the debt, request information about the original
creditor, or take other actions. The rule would allow a debt collector to
include specified optional information.
Also, the rule will include a model validation notice a debt
collector could use to comply with the FDCPA and the rule’s disclosure
requirements.
- Among other items worth noting, the rule would:
- Clarify the steps a debt collector must take to electronically provide the validation notice and other required disclosures.
- Include a safe harbor if a debt collector complied with certain steps when delivering the validation notice within the body of an email that was the debt collector’s initial communication with the consumer.
- Prohibit a debt collector from suing or threatening to sue a consumer to collect a time-barred debt.
Jonathan Foxx, Ph.D., MBA
Chairman & Managing Director
Lenders Compliance Group
