New Debt Collection Regulations provide consumers with certain additional protections but also authorizes some practices that may be used to abuse or harm consumers.
The first comprehensive federal debt collection regulations interpreting the Fair Debt Collection Practices Act (FDCPA) take effect November 30, 2021 and the new “Regulation F” will likely have a significant impact on many Pennsylvanians. By way of background, the FDCPA, initially enacted in 1977, protects debtors nationwide from abusive debt collection practices by placing restrictions on the conduct of debt collectors. Pennsylvania’s own law protecting consumers from problematic debt collection practices, called the Fair Credit Extension Uniformity Act, holds debt collectors to those same rules and further extends the restrictions to creditors as well.
With the new regulations set to take effect in the coming days, Attorney General Josh Shapiro is encouraging Pennsylvanians to learn their legal rights when it comes to debt collection, and to carefully examine the conduct of debt collectors to make sure they are acting in compliance with federal and state laws. While Regulation F does provide consumers with certain additional protections, it also authorizes some practices that may be used to abuse or harm consumers.
What New Rights and Protections does FDCPA Regulation F Provide for Consumers?
- Limits on the Frequency of Collection Conversations: In general, collectors will now have to wait a week after speaking to a consumer before placing another call on that account. However, it is important to note, as discussed below, these limits are “per debt” rather than “per debtor”; meaning, the collector could continue to contact the same consumer about other accounts if there are multiple accounts placed for collection with that collector.
- Ability to Stop Collection Calls: If a consumer requests that a collector stop using a particular method of communication (e.g., phone calls or texts), the collector must stop using that specific means of communication. The collector must abide by the consumer’s request regardless of whether it is made in writing or orally.
- Preconditions to Any Collector Credit Reporting: Prior to reporting a delinquent account to a credit bureau, a debt collector must first speak to a consumer or send a letter or electronic message about the alleged debt. While there are still concerns that some consumers may not receive this notice, the change will at least decrease the likelihood that the consumer first learns about an alleged debt when they try to access credit to buy a car or home, or an employer does a credit check for a new job.
- Expanded Information on Required Debt Collection Notices: Collectors will have to provide more robust validation notices to consumers, expanding the information contained and making it easier for consumers to identify the alleged debt or exercise their rights in response thereto. Unfortunately, some concerns still remain, as discussed in more detail below.
What Areas of Concern does FDCPA Regulation F Create for Consumers?
- Excessive Phone Calls: Although there are restrictions (discussed above) on the frequency that a collector can speak with a consumer about a debt, collectors can still harass consumers by making up to seven attempted calls per week per debt, either to the consumer or to friends and family to ask for the consumer’s contact information. For example, a consumer with five medical accounts in collection could theoretically—and legally—receive thirty-five attempted calls per week.
- Oral Notices to Consumers Are Now Allowed: Collectors can provide validation information verbally in an initial communication. Given the large volume of information involved in such a notice, a verbal transmission makes it less likely for the consumer to understand (and potentially dispute) the information.
- Electronic Notices to Consumers Are Now Allowed: Debt collectors will be able to provide required validation notices electronically in initial communications without being required to comply with the federal E-SIGN Act. For consumers who primarily use a smartphone to access email, this will make it more difficult to read, understand, print, and save notices if they do receive them.
- Required Notices to Consumers Need Not Be in the Language Used in the Collection Contact: Collectors are not required to provide validation notices in the consumer’s preferred language, even when the collector has already communicated with the consumer in a non-English language or otherwise has information about the consumer’s language preference.
- Electronic Collection Communication Allowed Without Consumer Consent: Collectors can use emails and other electronic communications to contact consumers unless the consumer opts out of such communication. Requiring an opt-out rather than requiring collectors to obtain consumer consent is more likely to result in missed messages, i.e., if collectors use old contact information or communications are sent to spam. Such a practice may also lead to more violations of the consumer’s privacy if messages are viewed by others, including employers.
- Time-Barred Debt Collection: Collectors are still permitted to pressure consumers to pay debts that are outside the statute of limitations. While collectors are still prohibited from suing or threatening to sue on time-barred consumer debts, in some states they can sue if a consumer inadvertently revives the statute of limitations through a partial payment after pressure from collectors.
- Decedent Debt: Collectors can communicate with a wide variety of grieving people about debts owed by the deceased and, in most cases, will not have to provide validation notices or respond to disputes.
If you have any questions about debt collection or have a problem with the actions of a debt collector, please contact the Bureau of Consumer Protection at 1-800-441-2555 or online at www.attorneygeneral.gov. For your ease of reference, the Attorney General’s website also includes a general overview of Pennsylvania’s debt collection laws, which can be found here.
Original Consumer Alert from the Office of the Attorney General