The CFPB’s final collections rule: contact frequency limitations and limited content messages

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On November 13, 2020, from 12:00 p.m. to 1:00 p.m. ET, we will present a webinar on the CFPB’s final collection rule.  

Among the items proposed in the CFPB’s NPRM that were adopted in its final collections rule are restrictions on call attempts and a limited content message definition.  While many observers are somewhat dismayed that the proposed call frequency limitations were adopted, the Bureau’s inclusion of a rebuttable presumption standard in the final rule was a notable departure from the NPRM.  Additionally, many observers appear to approve of the Bureau’s decision to permit a debt collector to include its name in a limited content message as defined in the final rule, although concern remains about whether that information will be enough to alert consumers of the opportunity return the call and resolve their debt.

With respect to the final rule’s call attempt restrictions, a debt collector may not place more than seven telephone calls to a person within seven consecutive days in connection with the collection of debt, or within a period of seven consecutive days after having had a telephone conversation with the person in connection with the collection of such debt. See § 1006.14(b)(1).  Further, under the rule, voicemails left for the consumer, including ringless voicemails, count as “calls” for purposes of calculating the call attempt limitation, as do limited content messages left for consumers (notwithstanding that such messages are not “collection calls” within the meaning of the FDCPA).  Calls excluded from the call attempt calculation include calls placed with prior consent given directly to the debt collector and which are returned by the collector within a period no longer than seven consecutive days after receiving that consent; calls that do not connect to the dialed number; and calls placed to certain professional persons. See § 1006.14(b)(3).

While the call attempt restrictions apply on a per debt basis (meaning 7 call attempts can be placed on each debt owed by the consumer in any 7-day period), an aggregate approach is taken with student loans serviced under a single account number.  The final rule added commentary that provides illustrative examples of how a debt collector should properly place telephone calls when collecting on multiple debts from the same consumer. See comment 14(b)(4)–2.  This commentary provides a mechanism to maximize call attempts when a debt collector is working on several different debts, but it requires debt collectors to “count” unsuccessful call attempts toward one particular debt, even if a successful call would have included a discussion of more than one of the debts.

Instead of adopting the bright-line rule for permissible and prohibited call frequency proposed in the NPRM, the Bureau finalized the call attempt restrictions in the form of a rebuttable presumption.  The final rule added commentary stating that even if the frequency limits are not exceeded, a debt collector could still violate the FDCPA if the natural consequence of another aspect of the debt collector’s communications is to harass, oppress, or abuse any person in connection with the collection of a debt.  Specifically, comment 14(b)(2)(i)–2 discusses how the presumption of compliance can be rebutted and includes a non-exhaustive list of factors that may rebut the presumption of compliance.  Generally, to rebut a presumption of compliance, it must be proven that a debt collector who did not place calls in excess of the frequency limits still placed calls or engaged a person in a telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass.  Conversely, the commentary also includes a non-exhaustive list of factors that a debt collector can use to rebut the presumption of a violation if the collector ends up exceeding the limits.  The practical impact of the presumption approach is that while collectors are likely to still treat the call attempt restrictions as hard limits, now they also cannot take comfort that doing so will protect them from potential claims in all instances.

With regard to the final rule’s definition of limited content messages, a limited-content message must include the following information to qualify as a limited content message: (i) a business name for the debt collector that does not indicate that the debt collector is in the debt collection business; (ii) a request that the consumer reply to the message; (iii) the name or names of one or more natural persons whom the consumer can contact to reply to the debt collector, and (iv) a telephone number that the consumer can use to reply to the debt collector; and telephone number or numbers that the consumer can use to reply to the debt collector. See § 1006.2(j).  While the final rule provides for a handful of additional, optional items that a collector can include in a limited content message, nothing else can be included in the limited content message for it to retain its status as a non-collection communication.

Further, it is important to note that the NPRM proposed allowing the use of limited content messages in voicemails, live calls, and text messages.  However, in the final rule, the Bureau confined limited content messages to voicemail only.  See § 1006.2(j).  The final rule instructs that if a collector places a call to a consumer that results in a live connect with an unauthorized third-party, the collector should not leave any message (limited content or otherwise) and instead, simply say they will call back.

The impact of the Bureau’s decision not to allow the use of limited content messages in texts as proposed is potentially significant.  A number of states require specific (and lengthy) disclosures, in addition to those already required by the FDCPA, in all written collection communications, which includes text messages.  States certainly are not bound to use the Bureau’s limited content message definition when interpreting and applying their own state collection laws and regulations.  However, if a state does use the Bureau’s definition for purposes of whether a text is a collection communication under state law, collectors would be unable to argue that because limited content messages sent by text s are not collection communications under the FDCPA or state law, such texts do not need to include required collection communication disclosures.  The ability to make this argument would have been extremely useful to collectors as many of these required disclosures (on their own) can exceed SMS text character limitations.  Now that this argument is no longer available, it seems that the only alternatives available to collectors using texts in these states are: (1) avoid sending texts (which is not ideal and may present operational challenges); (2) send multiple texts to deliver all required disclosures (not recommended because of related TCPA risk); or (3) provide the disclosures via a hyperlink (the sufficiency of which is far from a settled issue under the FDCPA, let alone under each state’s laws).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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