5 things consumers and collectors need to know about the new FDCPA regulation

Third party debt collection (collection agents like me) is governed by different laws in different states. There are also federal laws. The most famous of these is the Federal Debt Collection Act (FDCPA). Changes to the FDCPA were passed last year and came into effect in November 2021.

Summary of the new law

The new law repeats and clarifies the rules on harassment and abuse, lies and bad practices by debt collectors when collecting consumer debts. The rule focuses on communication and gives consumers more control over how often and by what means debt collectors can communicate with them. The rule also clarifies how the protection of the Fair Debt Collection Practices Act (FDCPA) applies to new communication technologies such as social media, email and text messaging.

What consumers need to know

It’s always important to remember that the FDCPA only applies to third-party consumer collections. If you owe money to a business, even a large one, such as a hospital, they do not have to follow the same rules as long as they collect it themselves. FDCPA also does not apply to B2B collections. The new rule clarifies that a consumer does not need to use certain words to say that a time or place is inconvenient for debt collection communication. Now you can tell the debt collector that they cannot communicate with you through a certain medium. For example, you can say “email only” or “phone calls only”. There are new rules on how a collector can handle paid debt or declared bankruptcy. If the collector knows (or should know) that the debt has been paid or is in bankruptcy, he is not allowed to sell or transfer the debt to someone else. There is now a clarification that allows the collector to negotiate the debt with the deceased person’s personal representative. The rule also explains how a debt collector can find a personal representative for a deceased person.

What collectors need to know

If the collector calls more than seven times in seven days, it is a violation. It is also a violation if the collector calls within seven days of the telephone conversation with the person. Collectors can use new communication technologies such as email and text messages. However, there are certain restrictions to protect consumer privacy and abuse. For example, the rule requires each debt collector email and text message to include opt-out instructions. A new term has emerged related to communications: a message with limited content. This definition covers the information that the collector must include in a voice message to consumers. This also applies to information that the collector MAY include. For example, collectors can now leave the name of their agency in the voicemail message. Perhaps most importantly, messages that meet restricted content requirements do NOT count towards the number of times a collector can contact a consumer. The FDCPA requires the collector to provide certain information to the consumer. The rule clarifies the standards that a debt collector must meet when submitting the required disclosures in writing or electronically. New rules for maintaining documentation have appeared. Under the new rules, debt collectors are required to keep records that show whether or not they complied with the rules. These records must begin on the date the debt collector commences the debt collection activity and kept for three years after the last debt collector action. In the case of telephone calls being recorded, they must keep the records for three years after the date of the telephone calls.

Debt collection from third parties is complex. As a consumer, it is important to take notes and receive information in writing. If you feel your rights are being violated, you have options. It is important for the collector to make sure you follow the rules for both legal and commercial reasons.

Dean Kaplan is President of The Kaplan Group, a commercial collection agency specializing in large claims and cross-border transactions. He has 35 years of manufacturing experience, international business leadership and customer service. Today he is engaged in business planning, training and consulting for various global companies.

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