On January 21, the CFPB issued a Small Entity Compliance Guide summarizing the October 2020 Debt Collection Rule. The Debt Collection Rule amends Regulation F, 12 CFR part 1006 and enters into force on November 30, 2021. The Debt Collection Rule governs the activities of debt collectors in under the Fair Debt Collection Practices Act (FDCPA).
The guide does not address the December 2020 Final Rule addressing and clarifying the consumer disclosure requirement, actions required prior to provision, and the prohibition on collection of time-barred debts. Eventually, the CFPB will update the guide to include the final December rule, but there is no release date set at this time.
Here are some notable highlights of the debt collection rule:
- Calls to cell phones and electronic communications, such as text messages and e-mail, are prohibited from communicating or attempting to communicate with a consumer at an unusual or inconvenient time or place.
- A debt collector who communicates or attempts to communicate electronically with a consumer must include in each communication a reasonable and simple method that the consumer can use to opt out.
- There are now procedures that debt collectors can follow to raise a defense of good faith error to third party liability for unintentional violations of the prohibition against third party disclosures rule for emails and text messages.
- A debt collector is presumed to comply with the prohibition against contacting a consumer with the intention of annoying, abusing or harassing, if he makes phone calls to a particular person in connection with the recovery of a debt. specific debt seven times or less within seven consecutive days and not within seven consecutive days after having had a telephone conversation with the consumer about the debt.
- The rule also provides that a debt collector should not post to the public portion of a consumer’s social media page, but can send a private message on social media.
The Debt Collection Rule is a much anticipated clarification and addition to the current regulation. The Small Entity Compliance Guide is a good reference point for more details on the new requirements.