The Consumer Financial Protection Bureau (CFPB) has issued its final rule to update the Fair Debt Collection Practices Act (FDCPA). The FDCPA provides the framework of rules that serve to protect consumers from abusive debt collection practices.
[November 30,2020 – The final rules were published here.]
The CFPB states the following important changes are part of the revised 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 call 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. For example, the final rule requires that each of a debt collector’s emails and text messages must include instructions for a reasonable and simple method by which a consumer can opt out of receiving further emails or text messages. The final rule also 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 related to debt collection communications: limited-content message. This definition identifies what information a debt collector must and may include in a voicemail message for consumers (with the inclusion of no other information permitted) for the message to be deemed not to be 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.
While the revised rules give consumers some new restrictions on debt collection communications it also opens the door up for collectors with new forms of communications.
Some Important Highlights of the New FDCPA Part 1006 Regulation F
The FDCPA still does not apply to the original creditor, known as first-party debt collectors. However, even an original creditor may get sucked into the rules if they used a different name to collect.
Definations
“Creditor means any person who offers or extends credit creating a debt or to whom a debt is owed. The term creditor does not, however, include any person to the extent that such person receives an assignment or transfer of a debt in default solely to facilitate collection of the debt for another.”
“Debt collector means any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another. Notwithstanding paragraph (i)(2)(vi) of this section, the term debt collector includes any creditor that, in the process of collecting its own debts, uses any name other than its own that would indicate that a third person is collecting or attempting to collect such debts. For purposes of § 1006.22(e), the term also includes any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the enforcement of security interests.”
A debt collector is not “Any nonprofit organization that, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in liquidating their debts by receiving payment from such consumers and distributing such amounts to creditors.”
[So a credit counseling agency is not considered a debt collector but other debt-relief entities might be considered collectors.]
Limited Content Messaging
A new form of messaging now exists:
“(j)Limited-content message means a voicemail message for a consumer that includes all of the content described in paragraph (j)(1) of this section, that may include any of the content described in paragraph (j)(2) of this section, and that includes no other content.
(1) Required content. A limited-content message is a voicemail message for a consumer that includes:
(i) A business name for the debt collector that does not indicate that the debt collector is in the debt collection business;
[This might run original creditors afoul of the FDCPA if they use a different name.]
(ii) A request that the consumer reply to the message;
(iii) The name or names of one or more natural persons whom the consumer can contact to reply to the debt collector; and
(iv) A telephone number or numbers that the consumer can use to reply to the debt collector.
(2) Optional content. In addition to the content described in paragraph (j)(1) of this section, a limited-content message may include one or more of the following:
(i) A salutation;
(ii) The date and time of the message;
(iii) Suggested dates and times for the consumer to reply to the message; and
(iv) A statement that if the consumer replies, the consumer may speak to any of the company’s representatives or associates.”
When a Collector Can and Can’t Communicate With a Debtor
“A debt collector must not communicate or attempt to communicate with a consumer in connection with the collection of any debt:
(i) At any unusual time, or at a time that the debt collector knows or should know is inconvenient to the consumer. In the absence of the debt collector’s knowledge of circumstances to the contrary, a time before 8:00 a.m. and after 9:00 p.m. local time at the consumer’s location is inconvenient; or
(ii) At any unusual place, or at a place that the debt collector knows or should know is inconvenient to the consumer.”
This is Why Being Represented by an Attorney Can be Helpful
“Prohibitions regarding consumer represented by an attorney. Except as provided in paragraph (b)(4) of this section, a debt collector must not communicate or attempt to communicate with a consumer in connection with the collection of any debt if the debt collector knows the consumer is represented by an attorney with respect to such debt and knows, or can readily ascertain, the attorney’s name and address, unless the attorney:
(i) Fails to respond within a reasonable period of time to a communication from the debt collector; or
(ii) Consents to the debt collector’s direct communication with the consumer.”
Contacting the Consumer at Work
Except as provided in paragraph (b)(4) of this section, a debt collector must not communicate or attempt to communicate with a consumer in connection with the collection of any debt at the consumer’s place of employment, if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.
[If you get a call from a debt collector at work, politely inform the collector your employer prohibits such calls and not to call you at work again.]
(4) Exceptions. The prohibitions in paragraphs (b)(1) through (3) of this section do not apply when a debt collector communicates or attempts to communicate with a consumer in connection with the collection of any debt with:
(i) The prior consent of the consumer, given directly to the debt collector during a communication that does not violate paragraphs (b)(1) through (3) of this section; or
(ii) The express permission of a court of competent jurisdiction.”
Cease Communication Requests
“Except as provided in paragraph (c)(2) of this section, if a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wants the debt collector to cease further communication with the consumer, the debt collector must not communicate or attempt to communicate further with the consumer with respect to such debt.
(2) Exceptions. The prohibition in paragraph (c)(1) of this section does not apply when a debt collector communicates or attempts to communicate further with a consumer with respect to such debt:
(i) To advise the consumer that the debt collector’s further efforts are being terminated;
(ii) To notify the consumer that the debt collector or creditor may invoke specified remedies that the debt collector or creditor ordinarily invokes; or
(iii) Where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.”
[I’m not a fan of just sending out a cease communication letter or telling the collector to cease communications since it can accelerate being sued. The better path to buy time is to not answer collector calls or be polite.]
Who the Debt Collector Can Communicate With Other Than the Debtor
“Except as provided in paragraph (d)(2) of this section, a debt collector must not communicate, in connection with the collection of any debt, with any person other than:
(i) The consumer;
(ii) The consumer’s attorney;
(iii) A consumer reporting agency, if otherwise permitted by law;
(iv) The creditor;
(v) The creditor’s attorney; or
(vi) The debt collector’s attorney.
[However, I believe that the debt collector could still attempt to find you by contacting others along as it is not disclosed they are trying to collect a debt.]
(2) Exceptions. The prohibition in paragraph (d)(1) of this section does not apply when a debt collector communicates, in connection with the collection of any debt, with a person:
(i) For the purpose of acquiring location information, as provided in § 1006.10;
(ii) With the prior consent of the consumer given directly to the debt collector;
(iii) With the express permission of a court of competent jurisdiction; or
(iv) As reasonably necessary to effectuate a postjudgment judicial remedy.”
Sending Email and Text Messages
Here is new information regarding the sending of text messages and emails. This is an attempt to move communications into the current form of the ways people are migrating towards communicating other than by the telephone.
Emails
“A debt collector maintains procedures that are reasonably adapted, for purposes of FDCPA section 813(c), to avoid a bona fide error in sending an email or text message communication that would result in a violation of paragraph (d)(1) of this section if those procedures include steps to reasonably confirm and document that:
(i) The debt collector communicated with the consumer by sending an email to an email address described in paragraph (d)(4) of this section or a text message to a telephone number described in paragraph (d)(5) of this section; and
(ii) The debt collector did not communicate with the consumer by sending an email to an email address or a text message to a telephone number that the debt collector knows has led to a disclosure prohibited by paragraph (d)(1) of this section.
(4) Procedures for email addresses. For purposes of paragraph (d)(3)(i) of this section, a debt collector may send an email to an email address if:
(i) Procedures based on communication between the consumer and the debt collector.
(A) The consumer used the email address to communicate with the debt collector about the debt and the consumer has not since opted out of communications to that email address; or
[If you use an email address to contact your creditor, you are opening the door.]
(B) The debt collector has received directly from the consumer prior consent to use the email address to communicate with the consumer about the debt and the consumer has not withdrawn that consent; or
(ii) Procedures based on communication by the creditor. (A) A creditor obtained the email address from the consumer;
(B) The creditor used the email address to communicate with the consumer about the account and the consumer did not ask the creditor to stop using it;
(C) Before the debt collector used the email address to communicate with the consumer about the debt, the creditor sent the consumer a written or electronic notice, to an address the creditor obtained from the consumer and used to communicate with the consumer about the account, that clearly and conspicuously disclosed:
(1) That the debt has been or will be transferred to the debt collector;
(2) The email address and the fact that the debt collector might use the email address to communicate with the consumer about the debt;
(3) That, if others have access to the email address, then it is possible they may see the emails;
(4) Instructions for a reasonable and simple method by which the consumer could opt out of such communications; and
[You will need to pay close attention to opt-out procedures if you want to stop, avoid, or block emails.]
(5) The date by which the debt collector or the creditor must receive the consumer’s request to opt out, which must be at least 35 days after the date the notice is sent;
(D) The opt-out period provided under paragraph (d)(4)(ii)(C)(5) of this section has expired and the consumer has not opted out; and
(E) The email address has a domain name that is available for use by the general public, unless the debt collector knows the address is provided by the consumer’s employer.
[The debt collector should not email you on an email address that is managed by your employer.]
(iii) Procedures based on communication by the prior debt collector. (A) Any prior debt collector obtained the email address in accordance with paragraph (d)(4)(i) or
(ii) of this section;
(B) The immediately prior debt collector used the email address to communicate with the consumer about the debt; and
(C) The consumer did not opt out of such communications.”
[If you gave the original creditor or a prior debt collector permission either explicitly or by not opting-out then the next debt collector may contact you by email until you opt-out.]
Text Messages
“For purposes of paragraph (d)(3)(i) of this section, a debt collector may send a text message to a telephone number if:
(i) The consumer used the telephone number to communicate with the debt collector about the debt by text message, the consumer has not since opted out of text message communications to that telephone number, and within the past 60 days either:
[Be careful about sending a text to the debt collector or you are opening the door to let them text you.]
(A) The consumer sent the text message described in paragraph (d)(5)(i) of this section or a new text message to the debt collector from that telephone number; or
(B) The debt collector confirmed, using a complete and accurate database, that the telephone number has not been reassigned from the consumer to another user since the date of the consumer’s most recent text message to the debt collector from that telephone number; or
(ii) The debt collector received directly from the consumer prior consent to use the telephone number to communicate with the consumer about the debt by text message, the consumer has not since withdrawn that consent, and within the past 60 days the debt collector either:
(A) Obtained the prior consent described in paragraph (d)(5)(ii) of this section or renewed consent from the consumer; or
(B) Confirmed, using a complete and accurate database, that the telephone number has not been reassigned from the consumer to another user since the date of the consumer’s most recent consent to use that telephone number to communicate about the debt by text message.”
How to Opt-Out of Email and Text Messages
“A debt collector who communicates or attempts to communicate with a consumer electronically in connection with the collection of a debt using a specific email address, telephone number for text messages, or other electronic-medium address must include in such communication or attempt to communicate a clear and conspicuous statement describing a reasonable and simple method by which the consumer can opt out of further electronic communications or attempts to communicate by the debt collector to that address or telephone number. The debt collector may not require, directly or indirectly, that the consumer, in order to opt out, pay any fee to the debt collector or provide any information other than the consumer’s opt-out preferences and the email address, telephone number for text messages, or other electronic-medium address subject to the opt-out request.”
Harassing, Oppressive, or Abusive Conduct
“(a) In general. A debt collector must not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt, including, but not limited to, the conduct described in paragraphs (b) through (h) of this section.
[If you feel you are being harassed, keep a log of the date, time, the identity of the collector, and a description of what the harassment was.]
(b) Repeated or continuous telephone calls or telephone conversations. (1) In general. In connection with the collection of a debt, a debt collector must not place telephone calls or engage any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
(2) Telephone call frequencies; presumptions of compliance and violation. (i) Subject to the exclusions in paragraph (b)(3) of this section, a debt collector is presumed to comply with paragraph (b)(1) of this section and FDCPA section 806(5) (15 U.S.C. 1692d(5)) if the debt collector places a telephone call to a particular person in connection with the collection of a particular debt neither:
(A) More than seven times within seven consecutive days; nor
[Can’t contact you more than seven times in seven consecutive days. So they can contact you at least once a day. You will need to keep a log of these communications.]
(B) Within a period of seven consecutive days after having had a telephone conversation with the person in connection with the collection of such debt. The date of the telephone conversation is the first day of the seven-consecutive-day period.
(ii) Subject to the exclusions in paragraph (b)(3) of this section, a debt collector is presumed to violate paragraph (b)(1) of this section and FDCPA section 806(5) if the debt collector places a telephone call to a particular person in connection with the collection of a particular debt in excess of either of the telephone call frequencies described in paragraph (b)(2)(i) of this section.
(3) Certain telephone calls excluded from the telephone call frequencies. Telephone calls placed to a person do not count toward the telephone call frequencies described in paragraph (b)(2)(i) of this section if they are:
(i) Placed with such person’s prior consent given directly to the debt collector and within a period no longer than seven consecutive days after receiving the prior consent, with the date the debt collector receives prior consent counting as the first day of the seven-consecutive-day period;
(ii) Not connected to the dialed number; or
[It would appear that if a call rolled to voicemail then it would count towards the one a day limitation.]
(iii) Placed to the persons described in § 1006.6(d)(1)(ii) through (vi). (4) Definition. For purposes of this paragraph (b), particular debt means each of a consumer’s debts in collection. However, in the case of student loan debts, the term particular debt means all student loan debts that a consumer owes or allegedly owes that were serviced under a single account number at the time the debts were obtained by a debt collector.
(c) Violence or other criminal means. In connection with the collection of a debt, a debt collector must not use or threaten to use violence or other criminal means to harm the physical person, reputation, or property of any person.
(d) Obscene or profane language. In connection with the collection of a debt, a debt collector must not use obscene or profane language, or language the natural consequence of which is to abuse the hearer or reader.
(e) Debtor’s list. In connection with the collection of a debt, a debt collector must not publish a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of sections 603(f) or 604(a)(3) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f) or 1681b(a)(3)).
(f) Coercive advertisements. In connection with the collection of a debt, a debt collector must not advertise for sale any debt to coerce payment of the debt.
(g) Meaningful disclosure of identity. In connection with the collection of a debt, a debt collector must not place telephone calls without meaningfully disclosing the caller’s identity, except as provided in § 1006.10.
(h) Prohibited communication media. (1) In general. In connection with the collection of any debt, a debt collector must not communicate or attempt to communicate with a person through a medium of communication if the person has requested that the debt collector not use that medium to communicate with the person.
(2) Exceptions. Notwithstanding the prohibition in paragraph (h)(1) of this section: (i) If a person opts out of receiving electronic communications from a debt collector, a debt collector may send an electronic confirmation of the person’s request to opt out, provided that the electronic confirmation contains no information other than a statement confirming the person’s request and that the debt collector will honor it;
(ii) If a person initiates contact with a debt collector using a medium of communication that the person previously requested the debt collector not use, the debt collector may respond once through the same medium of communication used by the person; or
(iii) If otherwise required by applicable law, a debt collector may communicate or attempt to communicate with a person in connection with the collection of any debt through a medium of communication that the person has requested the debt collector not use to communicate with the person.”
False, Deceptive, or Misleading Acts by Debt Collectors
“(a) In general. A debt collector must not use any false, deceptive, or misleading representation or means in connection with the collection of any debt, including, but not limited to, the conduct described in paragraphs (b) through (d) of this section.
(b) False, deceptive, or misleading representations. (1) A debt collector must not falsely represent or imply that:
(i) The debt collector is vouched for, bonded by, or affiliated with the United States or any State, including through the use of any badge, uniform, or facsimile thereof.
(ii) The debt collector operates or is employed by a consumer reporting agency, as defined by section 603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)).
(iii) Any individual is an attorney or that any communication is from an attorney.
(iv) The consumer committed any crime or other conduct in order to disgrace the consumer.
[No threats you committed a crime.]
(v) A sale, referral, or other transfer of any interest in a debt causes or will cause the consumer to:
(A) Lose any claim or defense to payment of the debt; or
(B) Become subject to any practice prohibited by this part.
(vi) Accounts have been turned over to innocent purchasers for value.
(vii) Documents are legal process.
(viii) Documents are not legal process forms or do not require action by the consumer.
(2) A debt collector must not falsely represent:
(i) The character, amount, or legal status of any debt.
(ii) Any services rendered, or compensation that may be lawfully received, by any debt collector for the collection of a debt.
(3) A debt collector must not represent or imply that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.
[This is often the easiest way to spot a scam debt collector or fake debt collector because they typically threaten unsuspecting consumers with arrest.]
(c) False, deceptive, or misleading collection means. A debt collector must not:
(1) Threaten to take any action that cannot legally be taken or that is not intended to be taken.
[A debt collector can’t threaten to sue you if they have no intentions of suing you. This is another good reason to keep a log of debt collector contacts and what they said.]
(2) Communicate or threaten to communicate to any person credit information that the debt collector knows or should know is false, including the failure to communicate that a disputed debt is disputed.
(3) Use or distribute any written communication that simulates or that the debt collector falsely represents to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or that creates a false impression about its source, authorization, or approval.
(4) Use any business, company, or organization name other than the true name of the debt collector’s business, company, or organization.
[Scam debt collector should not use fake names but scammers don’t care. They are honey badgers.]
(d) False representations or deceptive means. A debt collector must not use any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.”
A debt collector can use “an assumed name when communicating or attempting to communicate with a person, provided that the employee uses the assumed name consistently and that the debt collector can readily identify any employee using an assumed name.”
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