The CFPB issued final
rule to implement Fair Debt Collection Practices Act (FDCPA) requirements
regarding certain disclosures for consumers. The Bureau also issued an executive
summary of and a table
of contents for the final rule.
In general, the final rule requires debt collectors to provide detailed disclosures
about the consumer’s debt and rights at the outset of collection communications
and take specific steps – outlined in the rulemaking – to disclose the
existence of a debt to consumers, orally, in writing, or electronically, before
reporting information about the debt to a consumer reporting agency (CRA). The
rule also prohibits debt collectors from making threats to sue, or from suing,
consumers on time-barred debt.
As with the October
2020 Debt Collection Final Rule, the requirements of this latest rulemaking
only apply to “debt collectors” as that term is defined in the FDCPA.
This rule is effective on November 30, 2021.
Consumer Disclosures
Under the final rule, debt collectors are required to provide readily
understandable disclosures 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.
A model form in plain language is provided that debt collectors may use to
comply with the rule.
Contact Prior to Reporting a Debt to a CRA
The final rule generally requires the collector to contact the consumer
about the debt before the collector furnishes information about a debt to a
CRA. The contact could include speaking with the consumer by telephone, mailing
a letter, or sending an electronic message.
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.