In October, the CFPB released its long-awaited debt collection rule that supplements the Fair Debt Collection Practices Act (FDCPA). There is a lot to the new rule, and anyone subject to the FDCPA will have to review the rule and determine if changes to internal processes are needed (which is likely). The new rule also brings much needed guidance to debt collection using modern technologies like voicemail, email, text messages, and social media. These technologies did not exist in 1978 when the FDCPA became effective, so most in the industry welcome guidance from the CFPB that is applicable across the country.
The new rule provides procedures for communicating with consumers via email and text messages, and it protects consumers by requiring debt collectors to provide ways for consumers to opt out of electronic communications. The new rule also identifies the conditions under which a debt collector may use social media to contact consumers. Additionally, the CFPB introduced the limited-content message. A limited-content message is a voicemail that contains very specific information. As long at the required information is included and not supplemented by anything that is not specifically stated in the rule, the debt collector may leave a voicemail for a consumer without that limited-content voicemail counting as a communication. Along with recognizing the ability to send communications electronically, the CFPB also allows for disclosures required by the FDCPA to be sent electronically under certain conditions.
Notably, the CFPB included a safe harbor for certain emails and text messages used in collecting a debt. Essentially, as long as the rule’s procedures are followed, sending emails and text messages will be deemed to not be an unfair or unconscionable means of collecting a debt.
The document released by the CFPB includes the CFPB’s interpretations of the rule. These interpretations present various scenarios and discuss whether or not there is a violation of the rule and why. These interpretations will be valuable to legal, compliance, and training teams to make sure the rule is properly implemented.
The new rule will go into effect on November 30, 2021. If your business is subject to the FDCPA, Michael Best can help you implement the rule into your collection process.