Consumer Financial Protection Bureau Issues Final Rule To Revise Regulation F of The Fair Debt Collection Practices Act
Section 1033 of the Dodd-Frank Act of 2010 tasks the Consumer Financial Protection Bureau (“CFPB”) with implementing rules for consumer financial services related to the Fair Debt Collection Practices Act (“FDCPA”). On October 30, 2020, the CFPB released a final rule to restate and clarify practices by debt collectors when collecting consumer debt. The final rule to revise Regulation F of the FDCPA focuses on how often a debt collector can communicate with a debtor and on what means a debt collector can communicate with a debtor.
The Rule issued by the CFPB clarifies the FDCPA’s general prohibition on harassing, oppressive, or abusive conduct applies to telephone calls as well as other communication media, such as email and text messages. The Rule states that a debt collector does not violate the Rule regarding unusual or inconvenient places by calling a consumer’s mobile telephone or sending an electronic communication, unless the debt collector knows the consumer is at an unusual or inconvenient place. The Rule also clarifies that all of a debt collector’s conduct, taken together, is considered in determining whether the debt collector’s conduct violates the prohibition on harassing, oppressive, or abusive conduct even if, individually, the conduct would not have violated the prohibition. The debt collector is presumed to comply with the prohibition if the debt collector places telephone calls to a particular person in connection with the collection of a particular debt seven or fewer times within seven consecutive days and not within seven consecutive days after having had a telephone conversation about the debt.
Furthermore, the Rule provides relevant examples demonstrating how the prohibition restricts emails and text messages.
For instance, the Rule advises that a debt collector who communicates via text message must communicate a reasonable and simple method that the debtor can use to opt out of additional text messages (i.e.“Reply STOP to stop texts to this telephone number”). This requirement applies to a specific email address, telephone number, or other electronic medium address (such as a social media name or account). If a debtor opts out of receiving electronic communications from a debt collector, a debt collector may respond once, confirming the debtor’s request to opt out and stating that the debt collector will honor it.
The Rule further clarifies use of social media by debt collectors. Under the Rule, a debt collector must not publicly post a message regarding the collection of a debt on the debtor’s social media page. However, a debt collector may send a private message over social media unless the debtor advises the debt collector not to use that forum to communicate.
Additionally, the Rule was revised and now requires the debt collector to retain evidence of compliance or noncompliance starting on the date that the debt collector begins collection activity on a debt until three years after the debt collector’s last collection activity on the debt. If a debt collector chooses to record telephone calls, a debt collector must retain those recordings for three years after the date of the telephone call.
Lastly, the CFPB states that a second “disclosure-focused” final rule, which deals with debt validation notice and time-barred debt disclosures, will be implemented in December 2020.
Hill Wallack LLP will provide an update once the second final rule is implemented in December 2020.
If you have questions about this or any other issues, please contact one of our creditors' rights/bankruptcy attorneys.
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