On 12/18/2020, the CFPB issued their second recent final rule implementing provisions of the Fair Debt Collection Practices Act (FDCPA). While the first final rule implemented rules relating to debt collection communications, this final rule relates to disclosure requirements. Specifically, it requires debt collectors to provide, at the outset of collection communications, detailed disclosures about the consumer’s debt and rights in debt collection, along with information to help consumers respond.
The CFPB’s release explains the new rule as follows:
“Before a collector furnishes information about a debt to a consumer reporting agency, the final rule generally requires the collector to take one of several actions to contact the consumer about the debt. These actions include speaking with consumers about their debts by telephone, mailing a letter to the consumer, or sending an electronic message about the debt to the consumer. If mailing a letter or sending an electronic message to the consumer, the collector must wait a reasonable period of time to receive a notice of undeliverability, such as 14 days, before furnishing information to a CRA and must not furnish if a notice of undeliverability is received unless the collector takes additional steps. Collectors are also prohibited from, and will be strictly liable for, suing or threatening to sue a consumer to collect a time-barred debt, which is defined as a debt for which the applicable statute of limitations has passed.
Under the final rule, collectors will be also be required to provide readily understandable disclosures that contain more information than consumers currently receive when the collector first begins to communicate with the consumer to collect the debt. The disclosures must include details about the debt and consumer protections, including the right to dispute the debt and to request information about the original creditor. The disclosures also must continue to include a statement that indicates the communication is from a collector and is about a debt. The disclosures will help ensure that consumers are able to recognize debt they may owe and raise concerns about unfamiliar debts. A model form in plain language is provided that debt collectors may use to comply with the rule.”
The full final rule can be found here.