Once Regulation F — the Consumer Financial Protection Bureau’s Debt Collection Rule — goes into effect, collectors are going to have to make substantial changes to the validation notices they are sending out to consumers. Whether collectors choose to use the rule’s Model Validation Notice or continue using their own format of collection letter, there are four categories of information that will have to be included in those letters. Collectively, these categories are called validation information. In the latest episode of “You Wanted a Rule, You Got a Rule,” John Bedard of Bedard Law Group breaks down these four categories so collectors can understand what changes are going to have to be made to their letters.
The first category is debt collection communication disclosures. In layman’s terms, this is what people in the accounts receivable management industry know as the mini-Miranda — the disclosure that needs to be made informing the consumer that they are being contacted by a debt collector.
The second category of validation information is information about the debt. This includes some standard information, like the name and contact information for the collector and the current amount of the debt, and some new information — the itemization date. This is one of five dates that a collector can choose to inform the consumer about when the debt was incurred.
The third category of information is information about consumer protections. This includes letting the consumer know when the validation period ends, among other pieces of information. As Bedard notes, this is where collectors “begin to really talk about [their] obligation to explain to the consumer many of the consumer’s rights under the statute and some rights that they have under Regulation F.”
The fourth and final category of validation information is information about how the consumer can respond to the letter. Bedard and many in the industry are referring to this section of the validation notice as the “tear-off” because it is a part of the letter that can be torn off and sent back to the collector.
Check out all the episodes in the series here: You Wanted a Rule, You Got a Rule. You will also find links on that page to subscribe to the audio version of the series through Apple Podcasts, Google Podcasts, and Spotify. Like what you see? Be sure to reach out to John and let him know! And be sure to check out the Debt Collection Rule Resource Guide
