In this article we will be covering Debt Collection Practices Regulation F. Regulation F will affect the way debt collection businesses operate. This guide explains how it will affect consumers and and debt collectors and key conduct rules and clarifications.
This guide was developed by Tenant Watch Dog to help consumers understand the changes that are already in affect after the implementation of Regulation F.
As a result of the new ruling, many agencies have to make changes to their communication methods.
This Debt Collection Practices Regulation F guide aims to help consumers understand what specifically debt collectors can and cannot do.
What is Regulation F CFPB?
Debt Collection Practices Regulation F, other wise known as CFPB Regulation F Compliance guide is a new law that requires all debt collectors to follow certain rules and regulations. It was created to prevent abusive and harassing practices in the collection of debts.
Due to the changes brought about by the new law, many debt collection agencies have to change their communication methods with their customers, that in a nutshell is what is Regulation F in collections is.
Some of the changes that were implemented in Regulation F include new requirements for debt collectors.
Aside from calling and sending e-mails, Debt Collection Practices Regulation F also clarified various rules regarding the types of communication that debt collectors can use when trying to collect a debt. These rules were issued on November 30, 2020.
Debt Collection Practices Regulation F is an amendment to the Fair Debt Collection Practices Act. It applies to all debt collectors, which means it has the same definition as the previous version. It also provided clearer guidelines on how and when to contact consumers.
One of the new rules in Regulation F prevents over-contact. It also offers certain dates when consumers can contact their creditors.
Regulation F also applies to various types of businesses, such as debt buyers, collection agencies, and loan servicers. All of these entities must be fully compliant with the new rules by November 2021.
Since understanding the new regulations is very important, many debt collection agencies have already started implementing programs and training their staff members on how to comply with the new rules. However, based on our Debt Collector Reviews by real consumers many have not. Aside from implementing programs, debt collection agencies also need to train their call centers and agents on how to effectively communicate with their customers.
Who does Regulation F apply to?
Regulation F also applies to different types of businesses. Although it only applies to third-party debt collectors, first-party collections are also included in the ruling.
Even if a consumer is not a debt collector under the FDCPA, Regulation F can still affect their collection processes.
Debt Collection Practices Regulation F officially applies to:
- Collection Agencies
- Debt Buyers
- Collection Law Firms
- Loan Servicers
What are the new debt collection rules?
Due to the changes brought about by the new law, Regulation F requires debt collectors to implement a series of updates to their previous regulations. It also requires them to maintain a record for three years.
The main requirements of Debt Collection Practices Regulation F are to implement a series of rules regarding the frequency and times of contact that debt collectors can make with consumers.
One of the new rules that pertains to debt collectors is the 7-in-7 rule.
This means that a collector may not contact a consumer more than seven times in a span of seven days.
This rule also applies to certain time zones. For instance, consumers in certain time zones may not be contacted after 8 a.m. or after 9 p.m.
Only after the consumer has given consent can they send emails to them. However, they must renew their consent every 60 days. In addition, debt collection agencies are required to provide clear “Opt-Out” statements when they contact consumers.
Although Voicemails may be delivered, they still need to include certain requirements in order to be considered communications.
The dates when an itemization statement is provided are as follows:
- the last day of payment
- the last day of charge-off
- and the judgment date.
The model validation notice provides the debt collector with conspicuous and clear information about the alleged debtor. It also includes details about the debt collection process and its consumer protection options.
Debt Collection Practices Regulation F also shows that recording software is also required to be used by debt collectors to keep track of their activities and minimize the possibility of violations under the FDCPA.
Current Regulation F challenges
Due to the changes brought about by Regulation F, debt collection agencies are now required to follow a series of new communication standards and procedures when they try to collect debts.
Aside from keeping track of records, debt collectors also need to collect additional validation information from their consumers. This is a bit challenging for firms since they have to share all of this data with their consumers.
Through Debt Collection Practices Regulation F, the CFPB is implementing a series of changes designed to make the debt collection regulations more streamlined and consumer-friendly. This rule will be officially implemented on November 30, 2021.
Explanation of all primary components of the law
Let’s go over the key components of the FDCPA regarding debt collection communications:
- Under the terms of the FDCPA, a debt collector cannot contact a consumer about a collection without their permission or prior consent.
- This means that a debt collector may not contact consumers at inconvenient times or locations. For instance, they may not call them at 8 a.m. or before 9 p.m.
- If a consumer has an attorney, the debt collector may not contact them unless they know that their attorney can represent them.
- If a consumer has a job, the debt collector may not contact them if they believe their employer prohibits it.
- Unless the consumer has given their permission, a debt collector cannot contact any other person about their debt unless they specifically agreed to do so.
- If a consumer refuses to pay the debts, the debt collector must stop communicating with them. Some exceptions are also made.
The 7-in-7 rule explained in Debt Collection Practices Regulation F
Another important aspect of the new rule is that collectors may now place calls to consumers at any phone number. This allows them to contact the consumer about a specific debt for seven days.
The number of calls that the collector makes during the seven-day period does not reset once the calendar week begins. If a consumer receives seven calls in a row, then that call would be considered an illegal call under the new rule.
The number of calls that a collector may make to a specific consumer does not count toward the seven-day limit. If the collector engages in a phone conversation with the consumer, then they must stop calling the consumer for the rest of the week.
If the consumer provides express consent within seven days, then the collector can call them again within that period. Having the necessary tools to keep track of all of your calls should help keep you in compliance.
What are the types of communication Debt Collection Practices Regulation F applies to?
Regulation F also applies to calls made from a phone call to a consumer, as well as to newer communication methods such as emails and SMS.
Regarding phone calls, Regulation F also changes the rules for consent. The new rules now require consumers to give consent before receiving a message from the collector, and if they do, the collector may not continue calling them. This also applies to calls to the consumer’s attorney or the original creditor.
Voicemails are considered to be a communication unless they omit certain details. If the message includes other information, then it may not be considered a communication.
Debt Collection Practices Regulation F also allows debt collectors to contact consumers through email and SMS as long as they have given their consent. The consumer can also renew their consent for each 60 days.
Who does Regulation F impact?
This regulation also defines who is a debt collector and who is not. It also incorporates many of the same terms used by the Fair Debt Collection Practices Act.
The regulation defines a debt collector as someone who is primarily focused on collecting debts on behalf of someone else. This could be a person who provides debt collection services for a third party or a corporation.
When and how can debt collectors contact consumers? Initial communications and subsequent communications
When a debt collector calls a consumer, they must inform them that the call is for the purpose of collecting debts and that their information will be used to that end.
Even if the consumer receives the call in the first place, the debt collector should still include this information in every subsequent communication.
If the collector sends a message that’s inconvenient for the consumer, they should use common sense to make that clear.
The regulations also require that collectors can only contact consumers after 8 a.m. and after 9 p.m. if they are located in the consumer’s time zone or if they have a limited time period. Having the proper tools and software can help keep your agency in compliance.
Choosing an itemization date.
Part of keeping up with Regulation F is making sure that your agency is knowledgeable about the itemization date. This is the date when the collector can provide a breakdown of the total debt that they’re trying to collect.
Debt collectors can choose from five (5) possible dates:
- The last statement (date of the last periodic statement or invoice provided by a creditor)
- The charge-off date (the date on which the creditor determines the debt to be neglected and unlikely to be paid)
- The last payment date (the date of the most recent payment that has gone towards the debt)
- The transaction date (the date of the initial transaction that is indebted)
- The judgment date (the date of a final court judgment that officially determines that amount owed)
Before sending out an email or making a phone call to a consumer, make sure that all of the necessary information is included in your communications.
This also helps avoid miscommunication. Having the proper training and support can help your team understand the model validation notices.
Required Limited Content Information
As taken directly from Regulation F, this list shows what a voicemail must include in order to qualify as a Limited Content Message:
This list also includes the business name of the debt collector that the consumer should contact in order to reply to their message. Also, the telephone number that the consumer should use to contact the collector.
Optional Limited Content Information
The salutation and the date and time of the message should also contain a statement that says that the consumer can contact the company’s representatives or associates.
Even though a voicemail can still be considered a limited content message, it still has to include certain details.
A Limited Content Message is not considered a communication under Regulation F. It should be left to the consumer alone and not forwarded to a third party.
A Limited Content Message should be a voicemail that the consumer leaves for them. It should not be forwarded to a third party and should be left for the consumer.
Debt Collection Practices Regulation F prohibits a voicemail message that includes a request to speak to a specific consumer from being considered a limited content message.
The purpose of this rule is to prevent debt collectors from bombarding the consumer with repeated calls in order to avoid an over-call violation. It also avoids the risk of third-party disclosure.
Collectors are not allowed to continue communicating with consumers about a specific debt once the consumer has sent a notice stating that they want to stop the contact.
An oral request to stop communicating doesn’t mean that the consumer has given up on the contact.
Some exceptions to the cease-communication rule apply. If the consumer has already sent a written communication, a debt collector may still attempt to contact them.
- advise the consumer that the collector will stop any further collection efforts;
- notify the consumer that the debt collector may invoke a specified remedy, and, where applicable;
- to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.
Debt Collection Practices Regulation F – Informing the Consumer
Debt collectors cannot collect a particular debt until they have sent the name and address of the original creditor to the consumer.
This suspension of activity is a legally binding requirement that the consumer has to follow after receiving a written request from the debt collector for the details of the original creditor.
Disclosure of Future Communications
To avoid confusion, debt collectors must disclose the identity of the company that they’re talking to and the language used in the communication.
A debt collector also needs to provide a form that the consumer can use later to confirm and update their details.
The relevant factors for determining “actual notice within reason” include the following:
Undeliverability or notifications are also factors that can affect the accuracy of a notice.
The purpose of the communication should include the name of the original creditor and the amount of the debt. It should also include the address of the account where the payment is made and the date when the product or service was sold.
Identifying yourself as the person who sent the communication is also important. You can use the name that the consumer would likely recognize.
According to the model, a debt collector must provide a validation notice to a consumer after sending the communication.
With the Debt Collection Practices Regulation F, the Model Validation Notice indicates the following information as required:
- Debt communication disclosure as defined by § 1006.18(e)
- Required information about the debt
- Required information about consumer protections
- Required consumer-response information
How email and text message communications need to be handled now.
Originally, the policies regarding text and email communication were not clear. As the technology has evolved, the agency has now defined these types of communications as part of the debt collection process.
Email with Debt Collection Practices Regulation F
Debt collectors can send an email to:
This procedure works if the consumer has already provided the collector with a public email address that they can use to communicate with them about the debt.
The email address provided by the creditor is required to contain a clearly-written and conspicuous notice that explains the transfer of the debt.
If the consumer provided the email address previously used by the previous debt collector, the collector should use that address to communicate with them.
Debt collectors are permitted to send a communication by text message when:
- The consumer can also consent to receiving text messages through their phone number. However, the collector must confirm that the consumer has responded to the message within 60 days.
- The consumer has given the collector explicit consent to receive future messages. This means that the collector must either confirm that the consumer has responded to the message or renew their consent every 60 days.
Final Notes on Emails and Text Messaging with Debt Collection Practices Regulation F
When it comes to text and email communications, the consumer must also agree to receive them. If they do not want to receive them, the collector must stop communicating with them and explain the best alternative.
A simple and easy-to-understand statement about how to opt out of receiving emails and text messages should also be included in the messagefrom debt collectors.
FAQ on Debt Collection Practices Regulation F
CFPB Regulation F Final Rule
Regulation F is a new law that requires debt collectors to follow certain rules. The law aims to prevent abusive and harassing behavior by debt collectors. It impacts the entire debt collection process.
When and how does the latest version of Debt Collection Practices Regulation F go into effect?
On November 30, 2021, Regulation F became effective. This law supersedes the previous rules regarding email and text message communications.
Debt Collection Practices Regulation F includes policies for communications by phone call, voicemail, regular mail, email, text and SMS text.
Understanding the terms of the communication with debt collectors and their rights can help consumers avoid getting bombarded with multiple messages.
What is the FDCPA and how does it relate to debt collectors?
The 1977 Fair Debt Collection Practices Act was enacted to prevent abusive debt collection practices.
The Fair Debt Collection Practices Act was able to establish broad consumer protections. This law also applies to the collection of various types of consumer debts.
What is the CFPB and how does it relate to debt collectors?
The FTC enforced the FDCPA for over three decades. After the establishment of the CFPB in 2010, the law was finally enforced by the two agencies.
In 2020, the CFPB issued a final rule known as Regulation F to update the debt collection regulations. This new version will replace the older version known as the FDCPA.
We hope you enjoyed our Debt Collection Practices Regulation F article.