On July 28, the CFPB issued its Outline of Proposals under Consideration, which provides insight into pending regulations that will implement the FDCPA and other statutory authorities impacting the activities of debt collectors and debt buyers. As anticipated, the CFPB is considering a bright-line rule limiting the frequency with which debt collectors may contact, or attempt to contact, consumers.
While not necessarily as burdensome as the most restrictive state laws, this proposal is perhaps more complicated than any bright-line contact restrictions in place today. The proposal establishes different numerical restrictions depending on whether the collector has successfully established contact with the consumer who is alleged to owe a particular debt. Confirmed consumer contact is defined as having occurred when a collector, whether a current collector or a prior collector, has communicated with the consumer about the debt, and the consumer has answered when contacted that he or she is the debtor or alleged debtor.
Contact caps would apply to all communications (oral or written) and all attempts, whether successful or unsuccessful. Volume restrictions would be set on a per-account, per-week basis. Here’s how this breaks out:
1. Permissible consumer contacts (or contact attempts) per account per week if the debt collector has a confirmed consumer contact: If a debt collector has a confirmed consumer contact, he or she may make two attempts per unique address or phone number, three total contact attempts with one permissible live communication. For example:
- Example #1: The debt collector engages the consumer in a live communication as a result of the first contact attempt of the week. The collector may not attempt to call or engage the consumer in another live communication again during that week.
- Example #2: The debt collector makes two phone calls and sends the consumer a letter. The collector may not attempt to contact the consumer again during that week.
- Example #3: The debt collector makes two unanswered phone calls to a single phone number for the consumer. The debt collector may make one additional contact attempt to the account during the week but may not call the consumer again during the week at the phone number it called twice previously.
2. Permissible consumer contacts (or contact attempts) per account per week if the debt collector does not have a confirmed consumer contact: If a debt collector does not have a confirmed consumer contact, he or she may make three attempts per unique address or phone number and six total contact attempts to an account. For example:
- Example #1: The debt collector has three telephone numbers on an account for a consumer. The debt collector calls the first and second number three times each during the week. The consumer may not attempt to contact the consumer again during that week.
- Example #2: The debt collector has a consumer’s address and three phone numbers on an account upon placement. The debt collection mails an initial notice to the consumer and calls the consumer three times at the first number. The consumer may make two more contact attempts to the consumer but may not call the number it previously called three times.
3. Location contacts to third parties: If a debt collector has not had a confirmed consumer contact, he or she may make three attempts per unique address or phone number and six total contact attempts to a third party per week. The proposal would limit interactions with the third party to one live communication in total on the account. Once the collector has a confirmed consumer contact, he or she may not attempt to contact a third party regarding location information again without a reasonable belief the contact information for the consumer has become inaccurate.
While there will undoubtedly be challenges facilitating the necessary information transfers between agencies, these rules should serve to provide much needed clarity on how many contact attempts are permissible under the FDCPA.
Many agencies will need to re-think their operational strategies. Accurate contact information will be essential. Analytics providing insight into the best contact times, which modes of communication are most favorable to consumers and scoring models determining which accounts have the greatest probability of recovery will certainly aid agencies in making the most of limited contact attempts. Agencies that embrace the CFPB’s challenge to operate smarter will recognize the benefit of dramatically reduced legal and regulatory risk accompanied by high recovery rates.