Evaluating Regulation F: A Six-month Check-up on New Federal Debt Collection Regulations

By: April Kuehnhoff, Yaniv Ron-El

November 4, 2022 — Report

More than four decades after the Fair Debt Collection Practices Act (FDCPA) was enacted in 1977, the Consumer Financial Protection Bureau (CFPB) issued the first comprehensive federal debt collection regulations—Regulation F, which took effect on November 30, 2021.

Six months after Regulation F took effect, we investigated its impact on debt collection practices, focusing on two issues that are at the heart of the regulation: debt collectors’ communications with consumers and debt collection disclosures. We surveyed 117 consumer advocates from private practice, legal services and the non-profit sector, asking them about their observations regarding these debt collection practices. Following the survey, we conducted in-depth interviews with 22 survey respondents.

Given the scope of the new regulations, it is not surprising that the field is still adjusting to the new regulations, as many consumer advocates indicated in their responses and interviews. Advocates also reported that it was possibly too soon after Regulation F took effect to have observed certain changes, and that as they familiarize themselves with the new regulations, with time, they will likely encounter more specific issues and violations. Moreover, some consumer advocates mentioned that debt collectors’ changes to collection practices during the COVID-19 pandemic have made it more complicated to identify the effects of Regulation F.

We hope that this is the first of many reports to try to understand what these changes mean for consumers and the debt collection industry.

Key Findings

Collection by email and text increased, with a few reports of social media use. Many consumer advocates reported observing an increase in the frequency of emails and text messages from debt collectors to consumers since November 30, 2021. A limited number of consumer advocates reported use of social media by debt collectors for collection purposes, primarily via private direct messages.
There was apparent compliance with call frequency limits, but that is often hard to assess. Regulation F has frequency limits on collection communication by phone. Consumer advocates report that most debt collectors are generally complying with these limits. However, it is difficult to assess compliance because call limits are per account and because consumers, who often feel harassed by spam and other calls, tend not to answer calls from unknown numbers.
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. Many consumer advocates reported general compliance with Regulation F’s requirement that electronic messages include opt outs, but some reported that these are often not “clear and conspicuous” as further required by Regulation F.
Requests to stop particular types of communication are often ignored by collectors. Most survey respondents indicated that debt collectors generally do not comply with requests from consumers to cease contacting them via a particular method of communication—in violation of Regulation F.
The use of the model validation notice is widespread. Regulation F included a model validation notice for providing information to consumers about the alleged debt. A majority of consumer advocates observed that debt collectors are generally using the model validation notice in their initial communication with consumers.
Collectors are delivering validation information electronically and orally; oral delivery was particularly difficult to understand. Consumer advocates reported that validation information is being sent to consumers in the body of an email, as an attachment to or hyperlink in an email, as a hyperlink in a text message, and orally. They noted that oral transmission of validation information is particularly difficult for consumers to comprehend.
Electronic messages are viewed with more suspicion. Consumer advocates observed that consumers tend to be more suspicious of electronic written communication due to concerns about fraud and scams, raising concerns about electronic delivery of validation information, especially where consumers must click on an attachment or hyperlink from an unknown sender.
Consumers lack sufficient comprehension of the model validation notice. Although the model validation notice was created to increase consumer comprehension, the overwhelming majority of consumer advocates reported that consumer comprehension has not improved. The option to dispute the debt may be clearer in the model validation notice, but the itemization is particularly complicated to understand—including for consumer advocates.
Collection of time-barred debts continued, including suits and threats of suits. A majority of consumer advocates reported that debt collectors are still collecting time-barred debts after November 30, 2021. Even with disclosures, consumer advocates reported that consumers find this concept confusing. Moreover, some consumer advocates reported that debt collectors continue to sue and threaten to sue on time-barred debts, although this was prohibited by Regulation F.
There was non-compliance with requirements to provide notice before credit reporting. Consumer advocates reported non-compliance with Regulation F’s requirement to provide notice to consumers before reporting information about an alleged debt to credit bureaus. Rental debt was mentioned as a particular type of account in which non-compliance has been observed.

This report first provides background about the FDCPA, Regulation F, and the research methodology. It then breaks the two focus areas—debt collectors’ communications with consumers and debt collection disclosures—into subtopics. Each subtopic reports findings and makes detailed recommendations for the CFPB. The report concludes with an overview of the key policy recommendations the CFPB should implement to use its authority to enforce and improve Regulation F.