Debt collectors have long provided consumers with tear-off notices when sending collection letters. The tear-off notice allows consumers to indicate the type of payment being made and provides an easy-to-use mechanism for sending in payments on debts. If collectors opt to use the Consumer Financial Protection Bureau’s Model Validation Notice once Regulation F goes into effect, the tear-off notice is going to have to include some new information. It is that information that John Bedard analyzes in the latest episode of “You Wanted a Rule, You Got a Rule.”
The information contained in the tear-off portion of the Model Validation Notice gives consumers a number of options about how to respond to the collector, Bedard notes.
Consumers can choose from a number of dispute options, which collectors have to provide in a specific order. The tear-off also gives consumers the opportunity to request information about the original creditor, and to submit a payment if they choose to do so.
Given the increased concern about Hunstein cases these days, Bedard notes that the Model Validation Notice’s tear-off must contain an address of the collector that can be used to return the information back to the collector. That address can be for a third-party, such as a letter vendor, as long as the address in the tear-off is the same as the address that is used by the collector to receive disputes and requests for additional information, Bedard said.
“This consumer response information disclosures, they’re new to the collection industry and they really give consumers options on how to respond to the validation notice,” Bedard says during the episode.
Another important point to consider, Bedard notes, is how the consumer response information is placed in the validation notice.
“The placement and sequence of these disclosures must be followed, we can’t just be putting these things around anywhere or adding our own choices or changing the language of these choices,” he said. “The Bureau’s model form places the information at the bottom of the validation notice in the form of the tear-off designed to be separated from the body of the letter by the consumer and returned to the debt 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
