The Fair Debt Collection Practices Act (FDCPA) is a law that regulates debt collectors and their practices. It was designed to protect consumers from harassment, intimidation, or abuse by debt collectors. It governs the collection of mortgages, credit cards, medical payments, and other obligations primarily for personal, family, or home purposes. FDCPA regulations only apply to consumer debts and do not apply to commercial debts. In October last year, it was revised to include new updates that will go into effect on November 30, 2021.
This new amendment significantly changes processes currently employed during collections, which means that businesses have to prepare themselves to comply with the latest changes. Here are the critical points in the new revision of FDCPA regulations that will help businesses efficiently collect their dues.
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1. Restrictions on Phone Calls
According to the new FDCPA regulations, a debt collector can place up to seven phone calls per week. So, businesses looking to collect debts from a customer cannot call them more than seven times within seven consecutive days. One thing to note here is that this limitation applies to each particular debt and is not based on per consumer. So, a debt collector can call a consumer more often if they owe several debts.
2. Regulations Regarding Electronic Communications
Debt collectors can now communicate with consumers using new technologies such as email, text messages, and social media with certain limitations. This amendment prohibits the debt collector from communicating through social media platforms if the message is visible to the general public. Also, debt collectors must include the ‘unsubscribe’ option in email and text message communications.
3. Consumers Can Restrict The Mode of Communication
Under the modified FDCPA regulations, consumers can cease all collection communication from a debt collector through a particular medium like email and phone calls. So, if a consumer has requested a debt collector to stop calling or sending emails, the collector must do the same.
4. Collectors Cannot Send Messages to Consumers’ Work Email
The debt collectors should not communicate or send messages to the consumer on their company email address. However, suppose the consumer had used the company email address to communicate with the debt collector or had given prior consent to use that email address. In that case, the collector can email the particular consumer at that address.
5. Regulation Regarding Message Deliverability
Debt collectors cannot report collection items to consumer reporting agencies unless the debt collector has already communicated with the consumer. Also, debt collectors must wait a reasonable amount of time to ensure that letters, emails, or messages sent to the consumers are undeliverable. Technically, collectors need to wait 14 days from the date of sending the letter or email to the consumer before considering it undeliverable.
The FDCPA is an important law protecting consumers from companies that use aggressive and unfair methods to collect debts. Not complying with these rules could result in multiple penalties from the Attorney General or damages following legal action by consumers. So, if you’re not aware of all the things in FDCPA regulations or don’t have systems in place to ascertain compliance, it could even put the future of your business in jeopardy.
This is where working with an experienced debt collection agency like First Credit Services might help you. First Credit Services will assist you in maximizing your debt collection efforts while maintaining the reputation of your business while keeping your customers happy. Our A+ rating with the Better Business Bureau reflects that. First Credit Services provides several services, including First-party and Third-party Collections. We also offer additional services such as Customer Engagement Outsourcing and Extended Business Office under the same banner.
Also read: How Does Machine Learning Help in Debt Collections?
