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CFPB Has Added New Rules to the FDCPA


BV80
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The CFPB has added some new rules to the FDCPA that went into effect November 30, 2021.  They are available in the Code of Federal Regulations.  

One of the new rules is that a collection agency cannot report a debt to the credit reporting agencies before contacting a consumer either by phone or by mail.  
 

§ 1006.30  Other prohibited practices.

(a)  Required actions prior to furnishing information--

(1)  In general. Except as provided in paragraph (a)(2) of this section, a debt collector must not furnish to a consumer reporting agency, as defined in section 603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)), information about a debt before the debt collector:

(i)  Speaks to the consumer about the debt in person or by telephone; or

(ii)  Places a letter in the mail or sends an electronic message to the consumer about the debt and waits a reasonable period of time to receive a notice of undeliverability. During the reasonable period, the debt collector must permit receipt of, and monitor for, notifications of undeliverability from communications providers. If the debt collector receives such a notification during the reasonable period, the debt collector must not furnish information about the debt to a consumer reporting agency until the debt collector otherwise satisfies this paragraph (a)(1).

https://www.fdic.gov/regulations/laws/rules/6500-600.html#fdic65001006.18

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  • 2 years later...
On 12/1/2021 at 11:21 AM, BV80 said:

The CFPB has added some new rules to the FDCPA that went into effect November 30, 2021.  They are available in the Code of Federal Regulations.  

One of the new rules is that a collection agency cannot report a debt to the credit reporting agencies before contacting a consumer either by phone or by mail.  
 

§ 1006.30  Other prohibited practices.

(a)  Required actions prior to furnishing information--

(1)  In general. Except as provided in paragraph (a)(2) of this section, a debt collector must not furnish to a consumer reporting agency, as defined in section 603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)), information about a debt before the debt collector:

(i)  Speaks to the consumer about the debt in person or by telephone; or

(ii)  Places a letter in the mail or sends an electronic message to the consumer about the debt and waits a reasonable period of time to receive a notice of undeliverability. During the reasonable period, the debt collector must permit receipt of, and monitor for, notifications of undeliverability from communications providers. If the debt collector receives such a notification during the reasonable period, the debt collector must not furnish information about the debt to a consumer reporting agency until the debt collector otherwise satisfies this paragraph (a)(1).

https://www.fdic.gov/regulations/laws/rules/6500-600.html#fdic65001006.18

So, what are these new rules and how will they impact consumers?

1. Limiting phone calls and electronic communication

One of the major changes introduced by the CFPB is the limitation on the number of phone calls and electronic communication that debt collectors can make to consumers. Under the new rules, debt collectors are only allowed to make up to seven phone calls per week to a consumer, and they must wait at least a week before making another call. This is a significant reduction from the previous limit of unlimited calls per day, which often resulted in harassment and intimidation of consumers.

Similarly, debt collectors are now prohibited from contacting consumers through electronic communication, such as emails and text messages, unless the consumer has explicitly consented to such communication. This is a crucial step to protect consumers' privacy and prevent them from being bombarded with constant messages from debt collectors.

2. Clarifying the definition of 'harassment' and 'abuse'

The FDCPA already prohibits debt collectors from engaging in any conduct that is considered 'harassing, oppressive, or abusive.' However, the new rules provide a more specific definition of what constitutes harassment and abuse. This includes:

- Repeatedly calling a consumer with the intent to annoy, abuse, or harass them.
- Threatening to take illegal action or using profane or obscene language.
- Publishing a list of consumers who refuse to pay their debts (known as 'debt shaming').
- Misrepresenting the character, amount, or legal status of a debt.

These clarifications will make it easier for consumers to identify and report any abusive behavior from debt collectors.

3. Required disclosure of debt validation information

Under the new rules, debt collectors are required to provide a 'debt validation notice' to consumers within five days of their initial communication. This notice must include information about the debt, such as the amount owed, the name of the original creditor, and the consumer's right to dispute the debt. This will help consumers verify if the debt is legitimate and take appropriate action if it is not.

4. Prohibition of collecting 'time-barred' debts

A 'time-barred' debt is a debt that is past the statute of limitations, meaning the creditor can no longer sue the consumer to collect the debt. However, debt collectors can still try to collect these debts through other means, such as phone calls and letters. The new rules prohibit debt collectors from trying to collect on a time-barred debt unless they disclose to the consumer that the debt is not legally enforceable. This will prevent consumers from being tricked into paying debts that they are not legally obligated to pay.

In addition to these changes, the CFPB has also increased the penalties for debt collectors who violate the FDCPA. They can now face fines of up to $1,000,000 for any violation, which will hopefully serve as a deterrent for illegal and abusive behavior.
 

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1 hour ago, VerbalKnot71 said:

In addition to these changes, the CFPB has also increased the penalties for debt collectors who violate the FDCPA. They can now face fines of up to $1,000,000 for any violation, which will hopefully serve as a deterrent for illegal and abusive behavior.

Can you point to the statue where this is I am filing a counterclaim in a suit with MCM 

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7 hours ago, Bulldoger said:

Can you point to the statue where this is I am filing a counterclaim in a suit with MCM 

The poster wrote “fines”.  That is not necessarily statutory, actual, or punitive damages that can be awarded to the consumer.  I’m also interested in where the poster got that information.

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8 hours ago, Bulldoger said:

Can you point to the statue where this is I am filing a counterclaim in a suit with MCM 

MCM is also violating with me, they do not adhere to the "cooling off" period.

as far as giving a debt collector explicit consent to text, would they claim i was getting texts from the original creditor, therefore that relationship passes on to the debt buyer?

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some days i get 2 calls, but they do watch the 7/7

they do not watch the cooling off after they make contact:

In addition, the Debt Collection Rule creates certain “presumptions” to help determine whether debt collectors have violated this law. The debt collector is presumed to violate the law if they place a telephone call to you about a particular debt:

  • More than seven times within a seven-day period, or
  • Within seven days after engaging in a telephone conversation with you about the particular debt.
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28 minutes ago, ohsheetnj said:

some days i get 2 calls, but they do watch the 7/7

they do not watch the cooling off after they make contact:

In addition, the Debt Collection Rule creates certain “presumptions” to help determine whether debt collectors have violated this law. The debt collector is presumed to violate the law if they place a telephone call to you about a particular debt:

  • More than seven times within a seven-day period, or
  • Within seven days after engaging in a telephone conversation with you about the particular debt.

I don’t know what you mean by “cooling off”.  Are you referring to talking to you about the debt and then calling back in less than 7 days?

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the "cooling off" period i am referring to is when the debt collector makes contact with me.

then they have to wait 7 days to start again.

i have many violations where they made contact with me, say on monday, then called again the next day.

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