Rule clarifies tenants may sue debt collectors for evictions carried out during pandemic moratorium

Tenants can hold debt collectors accountable for illegal evictions in the face of a moratorium on such actions outlined by federal health authorities, according to a rule issued Monday by the federal consumer financial protection agency.

The Consumer Financial Protection Bureau (CFPB) said its interim final rule based on the Fair Debt Collection Practices Act (FDCPA) requires debt collectors to provide written notice to tenants of their rights under the eviction moratorium issued by the federal Centers for Disease Control (CDC). The bureau said the rule also prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium.

“The CDC has established the eviction moratorium to protect the public health and reduce the spread of the virus,” the bureau said in a release. “Debt collectors who evict tenants who may have rights under the moratorium without providing notice of the moratorium or who misrepresent tenants’ rights under the moratorium can be prosecuted by federal agencies and state attorneys general for violations of the Fair Debt Collection Practices Act (FDCPA) and are also subject to private lawsuits by tenants.”

In a statement, acting CFPB Director Dave Uejio said “no one should be evicted from their home without understanding their rights, and we will hold accountable those debt collectors who move forward with illegal evictions. We encourage debt collectors to work with tenants and landlords to find solutions that work for everyone.”

Under the rule, CFPB said debt collectors, including attorneys, seeking to evict tenants for non-payment of rent must provide tenants who may have rights under the CDC order with clear and conspicuous written notice of those rights. The notice must be provided on the same date as the eviction notice, or, if no eviction notice is required by law, on the date that the eviction action is filed, the bureau said.

The notice must be in writing, according to the agency; phone calls or electronic notices such as text messages or emails are not sufficient. Sample language to satisfy the rule’s disclosure requirements is included in the rule, the CFPB said.

“Failure to provide the required notice to tenants is a violation of the FDCPA,” the bureau said. “The FDCPA provides a private right of action against debt collectors, and violators can be held liable for actual damages, statutory damages, and attorney’s fees. Class actions may be brought under the FDCPA.”

The bureau added that its rule does not preempt more protective state laws, which some states (and localities) have adopted to enforce their own eviction moratoria. Debt collectors may also be required to provide notice of these moratoria, the bureau noted.

CFPB Rule Clarifies Tenants Can Hold Debt Collectors Accountable for Illegal Evictions