The Consumer Financial Protection Bureau’s Debt Collection Rule Regarding Communications

debt collection rule

The Debt Collection Rule (“the Rule”) interprets the federal Fair Debt Collection Practices Act. The Rule attempts to clarify how debt collectors can communicate with debtors and what information must be provided to the debtor when attempting to collect a debt.

What Is the Debt Collection Rule?

A new concept in the Rule is Limited Content Messages, defined in Section 1006.2. The Debt Collection Rule intends for debt collectors to be able to leave non-substantive messages without disclosing the debt to third parties. Limited-content messages must be left by voicemail and only contain the business name of the debt collector. The business name cannot indicate that they are a debt collector, this may be an issue moving forward for debt collectors whose names indicate they are in the collection business.

Section 1006.14 of the Rule contains concrete limitations on the number of telephone calls a debt collector may place. There are a few exceptions but generally a debt collector cannot place more than seven calls within seven days to a person or place a call within seven days after having a conversation regarding a debt via telephone.

Electronic Communication Rule Affecting Debt Collection

Electronic communication use is allowed by the Rule if the proper procedures are followed. Section 1006.6(d)(4) allows a debt collector to use an email address to communicate with the debtor if the email address has been used previously to communicate with the debt collector or the debtor has provided prior express consent to use the email address and the debtor has not opted out of communications. The Debt Collection Rule prohibits communicating or attempting to communicate with a consumer using an email address that the debt collector knows was provided by the debtor’s employer unless the debtor provided the debt collector with the email address and has not since opted out of communications. The Rule provides allowances for text messaging with similar constraints in Section 1006.6(d)(5).

In Section 1006.6(b)(1) the Rule states that it is an inconvenient time to communicate with the consumer before 8:00 AM and after 9:00 PM local time at the debtor’s location. The Rule also provides that if the debt collector does not have information regarding the debtor’s location, they may call at a time considered convenient in all time zones.

So far first party creditors are not directly implicated in the new Rule, however, moving forward creditors should implement new policies to ensure that third party debt collectors are in full compliance with the new Debt Collection Rule.