Fair Debt Collection Practices Final Rule

The CFPB recently issued a Final Rule to revise Regulation F, which implements the Fair Debt Collection Practices Act. 

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The Fair Debt Collection Practices Act was passed in 1977 to establish specific consumer protections surrounding the collection of debts and it’s safe to say we’ve seen more than a few changes in the ways we communicate since.  Among other things, this Final Rule addresses communication via email and text messaging.  It, more specifically, gives consumers the right to restrict certain types of communication and requires an opt-out when using email and text messaging.  In certain circumstances, the Final Rule also provides a safe harbor from civil liability if information about a consumer’s debt lands in the wrong hands.  There are clarifications provided on allowable times and places for communications and the prohibition on repetitive phone calls.  It also defines “limited-content” messages and how such messages can avoid being considered “communication”.

The coverage of the Rule is essentially unchanged and continues to apply to third-party debt collectors.  In other words, financial institutions that only collect their own debts would not be covered.  Keep in mind; however, that The Fair Debt Collection Practices Act…was a response to “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices…” and this Final Rule does give us some very concrete information on the types of activities that could be considered unfair, deceptive and/or abusive in the collections realm.  You’d have a hard time finding it spelled out with this much detail anywhere else.  For that reason, even if you aren’t technically subject to the Rule, we think it’s a good idea that all creditors have at least a general understanding of the prohibitions involved.  

The Rule becomes effective one year after publication in the Federal Register.  Stay tuned for more information!

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