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John Zasada, Compliance Consulting Director, Financial Institutions Group

On Oct. 30, 2020, the Consumer Financial Protection Bureau (CFPB) released a final rule, Regulation F, implementing the Fair Debt Collections Practices Act (FDCPA). The CFPB issued a proposed rule to amend Regulation F back in 2019, and that proposal resulted in more than 14,000 comments. The entire process from start to finish with the final rule was more than seven years.

The rule clarifies how the FDCPA applies to relatively new technologies, such as text and email messages. It establishes a presumption on the number of calls debt collectors may place to reach consumers on a weekly basis. A debt collector is presumed to violate federal law if the debt collector places telephone calls to a particular person in connection with the collection of a particular debt more than seven times within seven consecutive days or within seven consecutive days of having had a telephone conversation about the debt.

The rule requires debt collectors who communicate electronically to offer the consumer a reasonable method to opt-out of such communications at a specific email address or telephone number. The rule also provides that consumers may, if the debt collector communicates through electronic communications, use electronic communications to place a cease communication request or notify the debt collector they refuse to pay the debt. If a consumer opts-out of receiving electronic communications from a debt collector, a debt collector may respond once, confirming the consumer’s request to opt-out and stating the debt collector will honor it.

The rule clarifies the FDCPA’s general prohibition on harassing, oppressive or abusive conduct applies to telephone calls, as well as email and text messages. It provides examples demonstrating how the prohibition restricts emails and text messages.  For example, if a debt collector sends a consumer numerous, unsolicited text messages per day for several consecutive days, the debt collector may violate the prohibition.

The CFPB decided to not adopt the proposed safe harbor for debt collectors against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission.

This final rule does not address consumer disclosures. The CFPB stated it will address consumer disclosure in a second debt collection final rule to be issued in December 2020.

For assistance with staying in compliance with FDCPA, contact Doeren Mayhew’s regulatory compliance specialists.