New requirements from the CFPB, published in October 2020 and December 2020, are designed to address concerns about debt collection communications. These rules apply to calling customers, but now for the first time ever, the CFPB has also issued rules around email and SMS.
The first part of the ruling, released on October 30th, 2020, addresses a wide range of requirements and is available to read in its entirety at https://bit.ly/3lxb0n8. The second part, specifically covering certain disclosures to customers, and released on December 18th, 2020, can be found at https://bit.ly/2LoPHqO. In response, we’ve put together a new free eBook that covers how the new regulations impact you, what you need to do about them, and how LiveVox can help you strategize and execute for success in spite of the changes.
Below, we’ll take a closer look at how the rules could affect your operations. We hope this gives you a headstart in thinking about the types of moves you’ll need to make to ensure compliance is a top priority in your contact center.
The Potential Impact
With the CFPB limiting calling attempts to a customer to seven in a seven-day period about a particular debt, you need to be more strategic with your calls. It also means you need to have the ability to ensure you don’t break the new rules. How? By having technology in place that can count all attempts to any phone number when you call customers.
Right now, you may have some restrictions in place based on specific clients, or some rules that you follow internally, but now you are given government mandates—and they’ll be penalties if you don’t adhere—so you have to more closely watch your overall dialer operations. It becomes crucial to ensure that any types of calls you’re making are counted so you don’t exceed the prescribed amounts.
This isn’t just about reaching the customer at home, either. It applies to reaching the customer on any number. You need to be much more cognizant of what you’re doing with your dialing now that there’s going to be a hard federal guideline from the CFPB. And for extra peace of mind, you ideally want to have the right technology to make sure you don’t break the new rules.
When it comes to time-barred debt, the CFPB in effect has codified what courts have been saying for years: suing on time-barred debt is a violation of the Fair Debt Collection Practices Act (FDCPA). The Bureau did not finalize any federally mandated disclosures required of collectors for time-barred debt, but many states do require those disclosures and they remain in effect. It’s possible that more and more states will adopt time-barred debt disclosures moving forward.
As for the rule about informing customers about their debt prior to credit reporting, this requirement should not be an onerous one. This will, however, more specifically impact agencies that collect on small-dollar balances and debt buyers. If you find that this rule could be a problem point for your business, you’ll want to make sure you have an omnichannel communications strategy in place since you’re permitted to send the disclosure via email.
The validation notice piece is the most significant aspect of the CFPB’s final rule to implement FDCPA requirements regarding certain disclosures for customers. The overarching retreat by the Bureau effectively waters down the Safe Harbor provision, which will have a significant impact not only on debt collectors, but also on their credit clients in terms of supervision and oversight. While the CFPB states that debt collectors can use the Model Form or a substantially different one, any departure could expose you to liability.
Stay tuned for more posts coming in this in-depth series about the new CFPB rules.
If you have specific questions about how to operationalize the new requirements, please don’t hesitate to reach out to us.
Read our full CFPB eBook to find out:
- What the new rules are
- How they could impact your operations
- What you need to do right now
- What could happen if you don’t do anything
- How LiveVox can help