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.