CFPB Issues Final Rule: FDCPA Requirements for Disclosures

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The Consumer Financial Protection Bureau (CFPB) issued a final rule to implement Fair Debt Collection Practices Act (FDCPA) requirements regarding certain disclosures for consumers on Dec. 18.

The rule requires debt collectors to provide, at the outset of collection communications, detailed disclosures about the consumer’s debt and rights in debt collection, along with information to help consumers respond. It also requires debt collectors to take specific steps to disclose the existence of a debt to consumers, orally, in writing, or electronically, before reporting information about the debt to a consumer reporting agency (CRA).

The rule also prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt.

Additionally, under the final rule, collectors will also be required to provide readily understandable disclosures that contain more information than consumers currently receive when the collector first begins to communicate with the consumer to collect the debt. The disclosures must include details about the debt and consumer protections, including the right to dispute the debt and to request information about the original creditor. The disclosures also must continue to include a statement that indicates the communication is from a collector and is about a debt. The disclosures will help ensure that consumers are able to recognize debt they may owe and raise concerns about unfamiliar debts.  A model form in plain language is provided that debt collectors may use to comply with the rule.

This rule is effective on Nov. 30, 2021.

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