New debt collection rules adopted by the federal consumer financial protection agency went into effect Tuesday, the agency noted in a blog entry laying out five key points to know about the regulation.
According to the Consumer Financial Protection Bureau (CFPB), the new rules clarify how debt collectors can communicate with borrowers, including what information they’re required to provide at the outset of collection about the debt. The agency said the rules also outline rights of borrowers in debt collection and how they can exercise those rights.
The bureau said the five key points of the rule (which are detailed in the blog post) are:
- The parts of a debt collection validation notice;
- How often a debt collector can call a borrower;
- When a debt collector may report a debt to a credit reporting agency;
- Whether a debt collector can contact a borrower on social media about a debt; and
- What a “limited-content” message is.
Two rules actually took effect Tuesday:
- One adopted in October 2020 (noted above) that focuses on debt collection communications and clarifies the Fair Debt Collection Practices Act’s (FDCPA) prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
- One adopted in December 2020 that aims to clarify disclosures debt collectors must provide to consumers at the beginning of collection communications. It also prohibits, the agency pointed out, debt collectors from suing or threatening to sue consumers on time-barred debt. The second rule also requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency, CFPB stated.