Final debt collection rule issued by CFPB; more on consumer protections to come in December final rule

A final rule focusing on communications between consumers and debt collectors under the Fair Debt Collection Practices Act (FDCPA) was released Friday by the Consumer Financial Protection Bureau (CFPB), with that final rule scheduled to take effect one year following its publication in the Federal Register.

The bureau said the rule is intended to “restate and clarify” prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.

Issued in May 2019 (and followed by a supplemental proposal this February), the proposed rule drew more than 14,000 comments during the public comment and rulemaking process, the bureau said in a release Friday. The rule, revising the bureau’s Regulation F, focuses on the timing and means of communications between consumers and debt collectors and clarifies how the protections of the FDCPA, enacted in 1977, apply to newer communication technologies, such as email and text messages.

Not included in the final rule is a safe harbor for debt collectors against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission, the bureau said. “That provision was proposed to bring greater clarity to this issue but, after receiving questions and comments from many stakeholders concerning the proposal, the Bureau has decided not to finalize that provision,” the bureau said.

However, the final rule summary does note inclusion of a safe harbor for debt collectors from civil liability “for an unintentional third-party disclosure if the debt collector follows the procedures identified in the rule when communicating with a consumer by email or text message.”

Meanwhile, the bureau said it plans to issue a consumer disclosure-focused final rule in December to clarify the information that a debt collector must provide to a consumer at the outset of debt collection and to provide a model notice containing the information required by FDCPA section 809(a). It will also, the bureau said, address consumer protection concerns related to requirements prior to furnishing consumer reporting information and the collection of debt that is beyond the statute of limitations (i.e., time-barred debt, addressed in the above-noted supplemental proposal).

Friday’s final rule also, according to the summary:

  • Clarifies restrictions on the times and places at which a debt collector may communicate with a consumer, including by clarifying that a consumer need not use specific words to assert that a time or place is inconvenient for debt collection communications.
  • Clarifies that a consumer may restrict the media through which a debt collector communicates by designating a particular medium, such as email, as one that cannot be used for debt collection communications.
  • Clarifies that a debt collector is presumed to violate the FDCPA’s prohibition on repeated or continuous telephone calls if the debt collector places a telephone call to a person more than seven times within a seven-day period or within seven days after engaging in a telephone conversation with the person. It also clarifies that a debt collector is presumed to comply with that prohibition if the debt collector places a telephone call not in excess of either of those telephone call frequencies. The final rule also provides non-exhaustive lists of factors that may be used to rebut the presumption of compliance or of a violation.
  • Clarifies that newer communication technologies, such as emails and text messages, may be used in debt collection, with certain limitations to protect consumer privacy and to protect consumers from harassment or abuse, false or misleading representations, or unfair practices. For example, the final rule requires that each of a debt collector’s emails and text messages include instructions for a reasonable and simple method by which a consumer can opt out of receiving further emails or text messages.
  • Defines a new term related to debt collection communications: limited-content message. This definition identifies what information a debt collector must and may include in a voicemail message for consumers (with the inclusion of no other information permitted) for the message to be deemed not to be a communication under the FDCPA. This definition permits a debt collector to leave a voicemail message for a consumer that is not a communication under the FDCPA or the final rule and therefore is not subject to certain requirements or restrictions.
  • Regarding consumer disclosures, clarifies the standards a debt collector must meet when sending required disclosures in writing or electronically.
    Includes provisions clarifying debt collectors’ obligation to retain records evidencing compliance or noncompliance with the FDCPA and Regulation F; prohibiting the sale, transfer for consideration, or placement for collection of certain debts; and clarifying debt collectors’ obligations when responding to duplicative disputes.
  • Generally allows a debt collector to discuss a debt with the personal representative of a deceased consumer’s estate and clarifies how a debt collector may locate the personal representative of a deceased consumer’s estate.

The final rule also contains provisions on disputes, and record retention, among other topics.

Final rule notice for Federal Register