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How Regulation F Will Affect Collection Agencies in 2021: Part Two

Dec 10, 2021

In our last couple of blog posts, we have explained more about what a Validation Notice is and why you might be receiving one from a collections agency, and changes in Regulation F, and what that means for the Validation Notice going forward. The Capital Recovery Corporation team participated in intense training on the updated amendments to Regulation F that became effective on November 30th. These updates from the Federal Reserve change operations for debt collection agencies and set restrictions on systems and processes of debt collection practices.  

In case you missed it, click here to learn more about how our team participated in training on the new perceptions of the validation process and the distinguishing differences between the Validation Notice and validation process.  

Changes to Call Frequency and Electronic Communications 

This week, we look to review some of the changes Regulation F has created to call frequency and electronic communication preferences and what debtors can expect moving forward.  

Repeated or Continuous Telephone Calls and Conversations  

This change relates to Section 1006.14B21A and addresses telephone call frequency, more precisely the calling of more than seven times within seven consecutive days, and limits the number of times a collection agency can communicate with a debtor.  

Collections agencies will now need to consider how to accurately timestamp the actions of “placing a call” and “having had a telephone conversation with the person in connection with the collection of such debt.” This change to timestamp expectations for communication with consumers will cause necessary updates to IT systems to carefully code and designate calls on multiple or merged accounts.  

Seven Days after a Conversation 1006.14B21B  

This rule explicitly details the use of telephone call frequencies when a debt collector successfully connects with an individual within their attempts to discuss a debt. Once a collections agent successfully reaches the individual they’re trying to contact, a new timestamp begins for the ongoing conversations about a particular debt. The key here is getting consent–an agent will need to ask the individual for consent to call again within seven days. For agencies, changes to the call scripts will be essential to train the agents to immediately ask for permission to call again once the initial connection is made.  

Methods of Learning Consumers Communication Preferences  

The methods by which a collection agency learns about a consumer’s communication preferences. There are three methods by which an organization or agency can learn about a consumer’s communication preferences:  

  • At Debt Origination or Point of Service: The best and first place to capture a consumer’s preferences is when they open an account or obtain services. Here, the consumer can communicate their preferences, and details like email address, phone number, address, and even social media information, can be obtained. 
  • First-Party Servicing: When the consumer renews or changes communication preferences or when they update contact information. 
  • Third-Party Servicing: A consumer renews or changes communication or updates contact information. 

Emailing and Texting Limits  

Another change in the communication preferences addresses the use of email and texting limits. These include acknowledging “inconvenient time and place,” which looks to the consumer’s local time. Additionally, “time” also refers to when the collector sends it, not when the consumer receives it. This means that collections agencies need to take a conservative view of the specific time when emails and text messages are sent and need to operate within a safe window of communication time, generally focused on the middle of the day.  

Other changes include discontinuation of Limited Content Messages and harassment provisions as outlined under 15 USC 1692f.  

Procedures for Email Addresses  

Procedures for electronic communications extend to specific limitations for email addresses, including systems based on communications between consumer and debt collector, communication by the creditor, and communication by the prior debt collector.  

Procedures for Telephone Number, Text Messages, and Opt-Out  

Text messaging is allowed to communicate with consumers as long as that communication is performed within specifically laid-out requirements. Collections agencies are only allowed to communicate via text message at a number that has been confirmed as the correct number within the last sixty days.  

Re-verification must be completed every sixty days to continue using this method for communication. Additionally, a simple way for consumers to opt-out of further communications using language such as “stop, end, or unsubscribe” is recommended to ensure that your communication with consumers is within the text message regulations.  

The changes to Regulation F are designed to provide new rights to consumers and clarify many of the provisions of the FDCPA. Maintaining up-to-date training on these changes is essential for us to continue being a go-to medical and commercial debt collections agency for our clients. For more information on how we act as a provider of company debt collection services for many organizations, please contact us.