The CFPB’s edits to the FDCPA’s Regulation F were a game-changer, and for those who were unprepared, it has impacted their client’s revenue. Compliance with these changes doesn’t have to be intimidating. Professional Credit is an industry resource for Reg F for a reason, and we’re here to give you the play-by-play.
While these edits to Reg F went into effect at the end of 2021, we’ve found many organizations are still unaware of the elements that affect them. First of all, what is it? Regulation F was introduced largely to update the Fair Debt Collection Practices Act (FDCPA), which was first enacted in 1977. The rules and regulations needed a refresher in order to better serve all consumers, creditors, and collectors in the modern world. The Consumer Financial Protection Bureau (otherwise known as the CFPB and those who implement the FDCPA) made updates to Regulation F to provide clarity about how the rules from 1977 will be enforced with today’s technology.
Impact
The CFPB’s edits to Reg F contained a lot of changes for collection agencies. But what some organizations may not understand is the potential impact on their revenue. There are a few specifics that creditors should have heard about from their debt collection partner, which is what we’ll focus on today.
Let’s start with the itemization date. This is a new requirement for the collection agency’s validation notice, which is a letter that debt collectors have been required to send since the FDCPA first went into effect. The validation notice is the initial, written communication with the consumer to confirm the existence of their account and inform them of their rights. The new requirement of including an itemization date on the validation notice means the creditor will need to provide additional data elements to your collection vendor. The itemization date can be one of the following: date of the last statement, date of the last payment, date of transaction, charge-off date, or judgment date. Any one will do, as long as any fees or payments applied after this date are provided to your collection agency as well.
Emails
Professional Credit is a huge proponent of receiving email addresses to communicate with the consumer. However, another new aspect in the Reg F updates is a safe harbor designed to protect consumer privacy when using those email addresses. To receive the safe harbor protection, the creditor must provide notice to the consumer that the specific debt collector intends to communicate with the consumer at a specific email address and then give the consumer a reasonable period of time to opt-out. The CFPB has provided sample language that can be used to effectively provide this notice to the consumer.
Being an industry leader in compliance and using the latest technology to interact with consumers, Professional Credit already has a strategy in place to help you comply with Reg F as seamlessly as possible. To learn more about this unique strategy, please contact us at sales@professionalcredit.com.
In the future, Professional Credit will be back to expand on the long-term effects of Reg F; the changes we discussed today will likely be the first ones noticed by debt collectors focusing on