Regulation F and Debt Collection Practices

What is Regulation F and How It Impacts Debt Collection Practices?

The Consumer Financial Protection Bureau (CFPB) has recently finalized two rules, known together as Debt Collection Practices (Regulation F), which impacts the Fair Debt Collection Practices Act (FDCPA). This is the biggest change to the debt collection industry since the inception of the FDCPA back in 1978 and went into effect back on November 30, 2021. To help you understand these changes and the impact it has on your current debt collection practices we have provided five key aspects on the new debt collection rule.

1) The debt collection validation notice

When a debt collector first communicates with a consumer, or shortly thereafter, they’re generally required to provide certain information about the debt. When the information is provided in writing or electronically, it is called a validation notice, and it will generally include information like:

  • Name and mailing information of the debt collector
  • Name of the creditor to whom the debt is owed
  • Account number (if any) associated with the debt
  • An itemization of the current amount of the debt that reflects interest, fees, payments, and credits since a particular date that you may be able to recognize or verify with records
  • The current amount of the debt as of when the validation notice is provided
  • Information about the consumers debt collection rights including how to dispute the debt

2) How often can a debt collector call a consumer?

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from repeatedly or continuously calling consumers with the intent to harass, oppress, or abuse consumers. Under the Debt Collection Rule, collectors are presumed to violate the law if they place a telephone call to consumers about a particular debt more than seven times within a seven-day period, or within seven days after engaging in a phone conversation with a consumer about a particular debt. These call frequency presumptions only apply to calls placed by the collector to the consumer. It is important to note that they don’t apply to text messages, emails, and other types of media.

3) Reporting a consumer’s debt to a credit reporting company

There are certain steps debt collectors must take before they can report a debt to a credit reporting company. They must do any of the following:

  • Speak to the consumer by telephone or in person about the debt
  • Mail a letter or send an electronic communication about the debt and wait for a reasonable amount of time, generally 14 days, in case it is returned as undeliverable

If the debt collector sends a consumer a validation notice, it means that they’ve satisfied their requirement to contact the consumer and, in general, can begin reporting the debt to credit reporting companies, provided they follow other laws about credit reporting.

4) Contacting a consumer on social media about a debt

Debt collectors must follow certain rules if they contact consumers through social media, including:

  • Keeping the messages private – Their messages to consumers must be private and not viewable by the general public or by the consumer’s friends, contacts, or followers.
  • Identifying themselves as a debt collector – If a debt collector attempts to send a consumer a private message requesting to add the consumer as a friend or contact, the debt collector must identify themself as a debt collector.
  • Providing a way for the consumer to opt out of their communications – They must also provide the consumer, in each message, a simple way to opt out of receiving further communications from them on that social media platform.

5) What is a limited-content message?

A limited-content message is a type of voicemail that a debt collector may leave for the consumer that must include specific information. Limited-content messages must include:

  • A business name that does not indicate the caller is a debt collector
  • Telephone number(s) the consumer can use to return the call
  • A request that the consumer reply and the name(s) of who the consumer can contact to reply

There is also some optional information they can include, including suggested dates and time for the consumer to reply. Voicemails that do not follow these rules are not considered limited-content messages.

Importance Of Working with a Compliant Collection Agency

Now more than ever it is important to work with a complaint third party collection agency partner like Integral Recoveries that is well versed with all of the changes that had gone in effect with Regulation F. Integral Recoveries has been providing effective accounts receivable management solutions since 1995. Our mission is to resolve past due accounts utilizing state of the art information gathering, effective negotiations and persistence. We take a strategic approach to debt recovery and every account is researched thoroughly by experienced professionals in order to take the most effective course of action. Contact us if you would like to learn more about our services.