CFPB Issues Final Rule on Debt Collection Practices

The CFPB recently issued a final rule amending Regulation F, which implements the FDCPA, to address, among other things, debt collection communications and related practices by debt collectors. The final rule will become effective one year after publication in the Federal Register.

The final rule follows the CFPB’s proposed rule, which WBK previously covered here. CFPB Director Kathleen Kraninger stated that the “final rule [] provides clear consumer rights and limitations for debt collectors on using modern technologies to communicate with each other… And [the] rule will allow consumers, if they prefer, to limit the ability of debt collectors to communicate with them through these newer communication methods.” 

Some of the key provisions of the final rule include, in part, the following:

• Allows for the use of newer electronic communications (e.g., emails and text messages) for debt collection purposes subject to certain requirements, including opt-out options.  Additionally, a debt collector may obtain a safe harbor from civil liability for unintentional third-party disclosures if the debt collector follows the procedures identified in the final rule when communicating by email or text message.
• Prohibits debt collectors from communicating with a consumer in connection with the collection of a debt through social media if the communication is viewable by the general public or the person’s social media contacts.
• States that a consumer may restrict a debt collector from using certain media (e.g., email) for debt collection communications, subject to certain exceptions.
• Clarifies that a debt collector is presumed to violate the FDCPA’s prohibition on repeated or continuous telephone calls if they call a person more than seven times within a seven-day period or within seven days after engaging in a telephone conversation with the person.  In addition, a debt collector is presumed to comply with such prohibition if they do not place calls in excess of the aforementioned frequencies.
• Requires debt collectors to comply with the Electronic Signatures in Global and National Commerce (E-SIGN) Act if certain FDCPA disclosures are transmitted electronically.
• Introduces a new term, “limited-content message.”  Voicemail messages left for a debtor that follow the content requirements of the final rule are considered to be limited-content messages.  Such messages are considered to be an “attempt to communicate” and not “communication” for purposes of the FDCPA.
• Restricts the times and places at which a debt collector may communicate or attempt to communicate with a consumer, and notes that a consumer need not use specific words to assert that a time or place is inconvenient for debt collection communications.
• Clarifies that the personal representative of a deceased consumer’s estate is a consumer for purposes of Section 1006.6, which addresses communications with consumers in connection with debt collection.
• Prohibits a debt collector from selling, transferring for consideration, or placing for collection a debt if the debt collector knows or should know that the debt has been paid or settled or discharged in bankruptcy.

The CFPB expects to issue a disclosure-focused final rule in December 2020 to implement the FDCPA’s requirements regarding consumer disclosures and certain related consumer protections.  In that final rule, the CFPB intends to, in part, clarify what information a debt collector must provide to a consumer at the outset of debt collection, including a model notice.  Moreover, the CFPB also plans to address consumer protection concerns related to requirements prior to furnishing consumer reporting information and the collection of time-barred debt.