Debt Collection Notice Requirements

The federal Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. § 1692 and following) protects consumers from abusive debt collectors by restricting what collectors can and can't do when collecting debts. For example, under the FDCPA, a collector can't contact you at an unusual or inconvenient time or place, threaten to harm you, use obscene language, or call you repeatedly with the intent to annoy or harass you. It also provides people with certain rights and remedies against those who violate the law's provisions.

In late 2021, the Consumer Financial Protection Bureau (CFPB) issued significant changes to the rules that affect debt collection by amending Regulation F, which implements the FDCPA. Under the amended FDCPA, consumers get more control over how debt collectors communicate with them, while collectors face additional restrictions on how they collect debts. In addition, the CFPB imposed new rules for debt collection disclosures.

Under the amended law, collectors also have to provide more information in debt validation notices to help consumers identify the debt being collected, dispute the debt, and learn more about their legal rights.

What Is a Debt Validation Notice?

The FDCPA requires collection agencies to give consumers specific information in its first communication, which is generally called a "debt validation notice," including:

• the amount of the debt
• the name of the creditor to whom the debt is currently owed
• a statement that unless the consumer, within 30 days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector
• a statement that if the consumer notifies the debt collector in writing within the 30-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector, and
• a statement that, upon the consumer's written request within the 30-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor. (15 U.S.C. § 1692g(a)).

If the initial communication doesn't contain this information, by law, the agency has five days from the initial contact to provide it to the consumer. (15 U.S.C. § 1692g(a)). (The "initial communication" is the first time a debt collector conveys info, directly or indirectly, about a debt to a consumer. But it doesn't include legal pleadings, including bankruptcy proof of claims, limited content messages, and certain legally required notices.)

Effective November 30, 2021, the amended FDCPA requires debt validation notices to include significantly more information and additional disclosures.

Also, the amended law says that a debt collector may provide a validation notice in written or electronic form either in the initial communication with the consumer or within five days after that. And, collectors can provide validation information orally in an initial communication despite the large volume of information the law requires in the notice. (12 C.F.R. § 1006.34, 12 C.F.R. § 1006.42).

Debt Validation Requirements As of November 30, 2021

In addition to the information noted above, the amended law requires additional disclosures in a debt validation notice. The FDCPA's new disclosure requirements fall into four general areas:

1. Information that helps a consumer identify the debt being collected.
2. Information about consumer protections.
3. Information to help consumers exercise their rights under the FDCPA, including a tear-off dispute form with pre-written prompts for disputing a debt.
4. Disclosures required under certain laws. (12 C.F.R. § 1006.34).

The amendments also allow debt collectors to include certain optional disclosures.

1. Additional Information That Helps a Consumer Identify the Debt Being Collected

For debts related to consumer financial products or services, a validation notice must also include, among other things:

• the name and mailing information of the debt collector, consumer, and actual creditor
• the debt collector's name and the mailing address at which the debt collector accepts disputes and requests for original creditor information, and
• the itemized amount of the debt reflecting interest, fees, payments, and credits since the itemization date, and the itemization date.

The "itemization date" is one of the following reference dates: the date of the last periodic statement or written account statement or invoice that the creditor provided to the consumer, the charge-off date, the last payment date, the transaction date, or the judgment date. The debt collector chooses and must use the same reference date consistently while collecting the account.

Special Rule for Residential Mortgage Debts

If a debt collector provides a copy of a mortgage's most recent periodic statement with the debt validation notice and includes a reference to that statement on the validation notice where the itemization would normally appear, then the debt collector doesn't need to provide:

• the itemization date
• the amount of the debt on the itemization date, and
• an itemization of interest, fees, payments, and credits since the itemization date.

Disputing the Debt

As with the original version of the FDCPA, the amended law gives the consumer 30 days to dispute the debt and request the original creditor's name. This validation period runs from the date the debt validation notice is provided until 30 days after it is received or assumed received. Under the amended law, the collector may assume the consumer has received the notice five days (excluding federal legal public holidays, Saturdays, and Sundays) after the debt collector sent the notice.

So, while the FDCPA provides a consumer with 30 days to exercise its consumer protections, including disputing and requesting validation of the debt, the amended FDCPA adds five business days.

2. Information About Consumer Protections

The amended FDCPA also requires collectors to provide the following information about consumer protections in debt validation notices.

• A statement that additional information regarding consumer protections in debt collection is available on the CFPB's website at www.cfpb.gov/debt-collection.
• If the debt collector sends the validation notice electronically, a statement explaining how the consumer can dispute the debt or request original creditor information electronically.

3. Information to Help Consumers Exercise Their Rights Under the FDCPA

One of the most powerful tools you have under the FDCPA is to require that a debt collector verify the amount and validity of the debt it's trying to collect. (15 U.S.C. § 1692g(a)).

Under the FDCPA's new requirements, the collector must include a tear-off dispute form with pre-written prompts for disputing the debt in the validation notice. The form must say "How do you want to respond?" and "Check all that apply" with the following statements, listed in the following order, and using the following phrasing or substantially similar phrasing, each next to a prompt:

• "I want to dispute the debt because I think:"
• "This is not my debt."
• "The amount is wrong."
• "Other (please describe on reverse or attach additional information)." (12 C.F.R. § 1006.34).

It must also include an option to select the statement, "I want you to send me the name and address of the original creditor," using that phrase or a substantially similar phrase next to a prompt.

4. Disclosures Required Under Certain Laws

A provision of the amended FDCPA prohibits debt collectors from bringing or threatening to bring a legal action to collect a time-barred debt (that is, a debt for which the statute of limitations has expired). (12 C.F.R. § 1006.26(b)). Except for in a few states where the expiration of the statute of limitations extinguishes a debt, a debt collector can still contact you and ask you to pay up, even if the statute of limitations on a debt has passed. But it can't sue you.

Under the amended FDCPA, if a debt collector is collecting a time-barred debt, the collector must include on the front of the validation notice any time-barred debt disclosure that's required by law. (12 C.F.R. § 1006.34). Some states, like California, and certain cities, like New York City, have time-barred debt disclosure requirements.

Optional Disclosures Under the Revised FDCPA

A debt collector may, under the revised law, include any of the following information when providing debt validation information, among other things:

• the debt collector's telephone contact information
• a number or code that the debt collector uses to identify the debt or the consumer, and
• either or both of the following phrases: "Contact us about your payment options" and (below the consumer-response information) "I enclosed this amount," using that phrase or a substantially similar phrase, payment instructions after that statement, and a prompt. (12 C.F.R. § 1006.34).

Mini-Miranda Requirement

The FDCPA also mandates that a collector disclose in the initial communication that the collector is attempting to collect a debt and that any information obtained will be used for that purpose. The collector must also state that "the communication is from a debt collector" in subsequent communications. (15 U.S.C. § 1692e(11)). These disclosures are often called the "mini-Miranda."

Under the amended law, debt collectors must make the mini-Miranda disclosures in the same language or languages used for the rest of the communication in which the disclosures are conveyed. Collectors don't, however, have to identify which consumers can't communicate in English, nor provide translations in multiple languages. (12 C.F.R. § 1006.18(e)(4)).

Translation Into Other Languages

The amended FDCPA also gives debt collectors the option to send the consumer a validation notice translated into any language, so long as the debt collector also provides an English-language notice in the same communication as the translated notice. (12 C.F.R. § 1006.34).

The collector must send a validation notice in Spanish if:

• it included an optional disclosure about how to request a Spanish-language translation and
• the consumer made a request for the translated disclosure. (12 C.F.R. § 1006.34).

Safe Harbor for Debt Collectors

If a debt collector violates the FDCPA and you sue the collector in court, you might be able to recover different types of damages, including monetary damages, attorneys' fees, and more. (15 U.S. Code § 1692k). Or you could have a defense if the collector sues you.

But the amended law also includes an optional model form that debt collectors can use so they don't violate the law when sending debt validation notices. It provides a safe harbor (a legal provision in a law that gives protection against legal liability if specific conditions are met) for those that use it.

Some variations to the form are allowed if the content, format, and placement of information remain substantially similar to the model form.

Talk to a Lawyer

You can use your knowledge of these laws to protect yourself from harassment. For example, if a collector violates one of these laws, you might be able to use the violation to negotiate a favorable settlement or as a defense to a collections lawsuit.

If you think a debt collector has violated the FDCPA when trying to collect a debt from you, consider talking to an attorney to get advice about your options.