On May 7, 2019, the Consumer Financial Protection Bureau (CFPB) announced a much-anticipated package of proposed debt collection regulations, which will implement the federal Fair Debt Collection Practices Act (FDCPA). These new regulations, if enacted, would provide consumers with strong protections against debt collector harassment, as well as provide straightforward options for disputing debts.
Among other things, the new rules would do the following:
- Limit the number of calls that debt collectors may place each week. The proposed new rules generally would limit debt collectors to no more than seven telephone calls each week when calling a consumer about a specific debt. If the collector reaches the consumer and a conversation takes place, the debt collector then has to wait at least a week before calling the consumer another time. (Learn about how the FDCPA currently limits debt collector communications.)
- Require collectors to give consumers certain information to help them identify debts and respond to any collection attempts. Under the proposed regulations, debt collectors would have to send a disclosure to consumers, which would have details about the supposed debt. The disclosure would also have to include information about consumer protections such as how the consumer could respond to a collection attempt, including how to dispute the debt. (Currently under the FDCPA, you can request that a collection agency verify the amount and validity of a debt. To learn more, read Debt Validation.)
- Clarify how debt collectors may contact consumers. The proposed rule would clarify how collectors may lawfully communicate using newer technologies—like voicemails, emails, and texts—that have developed since the FDCPA was passed in 1977. Under the proposed rules, consumers who don’t want to get communications by these methods could unsubscribe from them. Also, if a consumer wants to restrict the ways that a collector may make contact them—say at a specific telephone number, while they’re working, or during particular hours—the proposed regulations describe how consumers could do so.
- Prohibit filing a lawsuit, or threatening to file a lawsuit, if the debt is time barred. The proposed rule would prohibit a debt collector from filing a lawsuit—or threatening to file a lawsuit—against a consumer to collect a debt if the debt collector knows or should know that the statute of limitations has passed. Also, the proposed rule would forbid debt collectors from giving information about a debt to a credit reporting bureau unless the debt collector has communicated about the debt to the consumer, like through a letter.
The CFPB says its goal with the new rules is to clear up and modernize consumer communication and disclosure standards, as well as crack down on aggressive and overreaching debt collectors.
If and when the proposed new rules become law, we'll post an update.
Effective date: May 7, 2019