The Consumer Financial Protection Bureau (“CFPB”) is a federal agency with authority to issue rules implementing the substantive requirements and prohibitions of the Fair Debt Collection Practices Act (“FDCPA”) regarding debt collection. These rules were recently updated in what is referred to as Regulation F. The updated Regulation F rules took effect on November 30, 2021.

For the most part, Regulation F restates the existing provisions of the FDCPA and provides further interpretations and clarifications as to the practical application of those provisions, particularly with respect to newer forms of communication technologies. Among other things, the Regulation F rules address prohibitions on harassing, oppressive, or abusive communications; prohibitions on communications with third parties subject to certain exceptions; required disclosures; and disputed debts. An example of a new rule implemented by Regulation F is that debt collectors must include a clear and conspicuous opt-out notice in electronic communications to debtors describing a reasonable and simple method by which the debtor can opt out of receiving further electronic communications from the debt collector. Our firm now includes such an opt out notice in any electronic communications to debtors. 

One of the most significant aspects of Regulation F is the inclusion of a new model form that debt collectors can use for providing debtors with required debt validation notice information. Under the FDCPA, debt collectors have always been required to provide debtors with certain debt validation notice information either with the debt collector's initial communication with the debtor or within five days of such initial communication. The content of the debt validation notice information, even when debt collectors essentially repeat the applicable statutory language right from the FDCPA, has long been a source of alleged fair debt collection violations. Attorneys for debtors sometimes argue that the validation notice information is overshadowed by other information included in the communication or that the wording is confusing under the “least sophisticated debtor” standard. The new model form is intended to provide a safe harbor to debt collectors who use the model form, which should make them less susceptible to potential liability.

While the new model form is not a perfect fit for the specific type of debt collection we do (i.e., the collection of delinquent HOA assessments), we intend to use the model form to benefit from the safe harbor to the extent possible. Since we have previously included debt validation notice information as a part of our initial communication to a debtor (whether that be a pre-lien letter or some other communication), using the new form will add a preliminary step to our collection process. We will now be sending the debt validation notice form as the first step in all collection matters assigned to our firm.