Fair Debt Collection

The Consumer Financial Protection Bureau (CFPB) has proposed a new rule, the Fair Debt Collection Practices Act (FDCPA).  The rule would expand the methods by which debt collectors can contact debtors – while also providing greater consumer protections. The proposed changes include the following:

Calling Limits: A collector would be limited to seven call attempts and one conversation per week with a debtor.

Safe Harbor for Email & Text: The rule would establish a safe harbor for unintentional third-party disclosure of debt via email or text message if the collector follows procedures and gives the debtor an opt-out option.

Communication Opt-Out: The rule would allow a debtor to opt-out of specific communication channels (specific telephone number, email addresses, etc.).

Limited-Content Message: It proposes a “limited-content message” that would be left via voicemail or text message that wouldn’t be considered a “communication” for purposes of third-party disclosure.

Time-Barred Debt: A debt collector would not be allowed to sue or threaten debtors on debt they know/should know is barred by the statute of limitations.

Communication Before Credit Reporting: A collector would not be allowed to report a debt to a consumer reporting agency until after they have communicated with the debtor.

Validation Notice: The proposed rule offers a new model for validation notice.

After publication in the Federal Register, the proposed rule will be available for comment for 90 days. If published, the rule would be effective after one year.

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