The National Consumer Law Center has released a report evaluating the impact of Regulation F in the six months after the rule went into effect on November 30, 2021. The report was based on the results of a survey of 117 consumer advocates nationwide, which included in-depth follow-up interviews with 22 of the survey’s respondents. Among the key findings of the survey were:
- Collection by email and text increased, with a few reports of social media use
- There was apparent compliance with call frequency limits, but that is often hard to assess
- Notices of the right to opt out of electronic messages were generally included in debt collection electronic communications but were not always clear and conspicuous
- Requests to stop particular types of communication are often ignored by collectors
- The use of the model validation notice is widespread
- Collectors are delivering validation information electronically and orally; oral delivery was particularly difficult to understand
- Electronic messages are viewed with more suspicion
- Consumers lack sufficient comprehension of the model validation notice
- Collection of time-barred debts continued, including suits and threats of suits
- There was non-compliance with requirements to provide notice before credit reporting
The volume of communications sent via email and text messages increased after Regulation F went into effect, according to the report. About 44% of debt collectors were making more frequent use of email following the enactment of Regulation F, and 56% of collectors were more frequently using text messaging, according to the report. The data includes anecdotal reports from advocates about situations in which email or text messages were not the ideal forms of communication for consumers. Some consumers have their name on more than one cell phone account and collection messages are going to the wrong parties, and text messages can be disruptive because they are more immediate and feel more intimate, one advocate said in the report.
Of collectors who are leaving voicemails, 63% are using the limited-content message and 25% are using other forms of messages, likely the Foti or Zortman messages.
The report makes recommendations that the Consumer Financial Protection Bureau should adopt, including:
- Amending Regulation F to prohibit collectors from communicating with consumers via social media direct or private messaging
- Decreasing the number of permissible calls to three per week and apply the limits on calls and conversations to a per consumer basis, not per account
- Stopping the exemption of limited-content messages from FDCPA protections that would otherwise apply to voicemail messages
- Issuing guidance regarding when an opt-out notice does not satisfy Regulation F’s “clear and conspicuous” requirement
- Allowing consumers to reply to messages to opt out instead of clicking on a link to do so
