Author: Kelly Knepper-Stephens

FCC Orders to Take Effect While Comment Period to Identify Burdensome Rules Opens 

By on April 15th, 2025 in Compliance, Customer Experience, Industry Insights, Product and Technology

APRIL 15 UPDATE: FCC GRANTS ACA’S PETITION TO EXTEND EFFECTIVE DATE

On April 7, 2025, the Federal Communications Commission FCC issued an order granting a limited waiver that extends the effective date —for a full year—to April 11, 2026 of the revocation provisions from the February 2024 Order. The specific rule section that is being delayed is 47 CFR § 64.1200(a)(10) of the Commission’s Order requiring businesses to treat a consumer’s reasonable revocation to revoke consent as revocation for all future calls and texts to that phone number. That specific section reads in part: 

“A called party may revoke prior express consent, including prior express written consent, to receive calls or text messages made [using an autodialer as defined by the TCPA, using a prerecorded voice, or to a subscriber on the do not call registry] by using any reasonable method to clearly express a desire not to receive further calls or text messages from the caller or sender.”

No other rules adopted in the February 2024 Order are changed by the delay. The FCC decided to make these changes after receiving a request to delay the effective date from ACA International and several other associations (ABA, AFSA, Mortgage Bankers), explaining the implementation complications for both larger institutions having multiple business units and systems and smaller institutions having more manual processes and third party vendors to coordinate. The FCC rules allow for the Commission to consider and order such changes upon special circumstances that warrant a deviation, like undue hardship, equity, or more effective implementation of overall policy. The Commission found good cause to push back the effective date due to the challenges all businesses face in processing revocation requests across multiple business units, systems, and vendors.   

The extension gives businesses more time to do two things: (1) implement changes across systems, units, and vendors to operationalize the rule and (2) file a comment identifying the same provision as an unduly burdensome rule by the April 28, 2025 comment deadline for the Commission’s deregulatory initiative.

The blog post below was originally published on March 26, 2025 and has been updated to address the changes based on the new April 7, 2025 Order.

The Federal Communications Commission (FCC) is seeking public input on identifying FCC rules for the purpose of alleviating unnecessary regulatory burdens. In a public notice released March 12, 2025, the FCC announced the Commission is seeking comments on deregulatory initiatives to identify and eliminate those that are unnecessary in light of current circumstances. The FCC notice stated: “in addition to imposing unnecessary burdens, unnecessary rules may stand in the way of deployment, expansion, competition, and technological innovation.” Reply comments are due by April 28, 2025.

In the meantime, two FCC Orders that both impact the debt collection industry come into effect:

  • A 2024 Order released last February impacting revocation of consent to receive autodialed calls and texts and prerecorded or artificial voice calls. The 2024 Order conflicts with the CFPB’s Regulation F Debt Collection Rule about the scope of an opt-out.
  • And a 2025 Order released this past February aiming to strengthen call blocking of illegal calls. The 2025 Order may result in the blocking of lawful debt collection calls and texts.

Debt collectors and other companies impacted by these two orders may want to submit comments to the FCC identifying the particularly burdensome aspects that could be revisited and slightly revised to be consistent with consumer preference, consistent with other laws and regulations (like Regulation F), and less burdensome on companies.

Quick Note: These FCC rules are about the Telephone Consumer Protection Act (TCPA), which applies only to calls and texts made by an automated telephone dialing system (ATDS) and prerecorded or automated voice calls (aka robocalls or robotexts).1 If you do not use an ATDS to make calls or texts, and you don’t use prerecorded or automated voice calls, these Orders do not apply to your communications.

I. 2024 Order – Special Revocation Rules

On February 15, 2024, the FCC published an order adopting rules which impact text messaging and outbound dialing using an ATDS as well as calls made with prerecorded or automated voice. Most provisions of the Order take effect April 11, 2026.2 Those provisions include:

  • Consumers can revoke consent by “any reasonable manner”
  • If consent is revoked it applies to both “robo texts” and “robo calls”
  • Companies must process do-not-call and consent revocations requests within a reasonable period of time not to exceed 10 business days of receipt.

Originally these provisions were to take effect on April 11, 2025; however, in response to a petition from ACA International and other trade associations, the FCC on April 7, 2025 issued an order granting a limited waiver that gives companies an additional year to operationalize the revocation rules, changing the effective date to April 11, 2026.  The Order also limited senders of text messages made using an ATDS to a one-time, revocation-confirmation text. This provision took effect in April of 2024.

a. Revoking consent is super flexible.

The FCC Order establishes that consumers may revoke prior express consent for autodialed or prerecorded/artificial voice calls and texts in any reasonable manner. This means that companies cannot designate an exclusive means to revoke consent that precludes the use of any other reasonable method.

A non-exhaustive list of “reasonable” ways a consumer can revoke consent include:

  • Request made using an automated, interactive voice, or key press-activated opt-out mechanism on a robocall
  • A response of “stop,” “quit,” “end,” “revoke,” “opt out,” “cancel,” or “unsubscribe,” or a similar, standard response message sent in reply to an incoming text message
  • Request submitted at a website or telephone number provided to process opt-out requests

If a sender uses a texting platform that does not allow two-way texting, the sender must clearly and conspicuously disclose in each text that (1) replying is unavailable and (2) provide the details of other reasonable alternative ways the consumer can revoke consent.

If a consumer uses any reasonable method to revoke consent, the FCC considers that consent to be definitively revoked, and future robocalls and texts from that company must be stopped.

Note that effective as of this April 11, 2025, a company must honor other revocation methods than key word replies to the text message. A consumer’s use of any other method to revoke consent, such as a voicemail to the sender’s telephone number or email address, creates a rebuttable presumption that consent has been revoked. If there is ever a dispute about whether a consumer reasonably revoked consent, the sender has the burden to show why they did not treat the consumer’s communication as a revocation.

b. Revocation applies to the number, not the channel.

The Order states that when consent for autodialed calls or texts is revoked, that revocation extends to both robocalls and robotexts regardless of the channel used to communicate the revocation. It is the FCC’s position that a consumer grants consent to be contacted at a particular wireless phone number or residential line, and therefore, consent revocation is an instruction to no longer contact the consumer at that number.

This FCC interpretation is different from the CFPB’s approach in Regulation F, which prevents debt collectors from contacting a consumer in a channel after the consumer opts out of communications in that channel. Under Regulation F, if a consumer opts-out from texts it does not require opting the consumer out of calls to that number. This FCC Order has a broader effect—if a consumer revokes consent to text by text, it requires opting the consumer out of all communications to that phone number (calls and texts).

c. Ten business days to process revocation.

The FCC now requires that companies honor opt-out/revocation requests within a reasonable period of time, not to exceed 10 business days of receipt. The FCC chose 10 business days since it was consistent with the timeframe to process revocation requests under the CAN-SPAM rules. However, the FCC made clear that it will continue to monitor advances in technology to see if faster processing times may be warranted in the future, and it explicitly stated “[w]e encourage callers to honor such requests as soon as practicable as a best practice.”

This particular provision is also at odds with the FDCPA, as the FDCPA does not contain language offering a reasonable processing time for opt-outs or any inbound requests (like cease and desist, notice of attorney representation, etc.). The CFPB did not provide any reasonable processing time for opt-outs in Regulation F.

II. 2025 Order – Enhanced Call Blocking Rules

On February 27, 2025, the FCC published an order seeking to strengthen the call blocking and robocall mitigation rules requiring all providers in the chain to block calls that are highly likely to be illegal based on a reasonable Do Not Originate (DNO) list. In the past, lawful debt collection calls have unfairly been blocked in these efforts. This Order has different effective dates but the earliest is May 2025.

a. Every provider must block illegal calls.

The FCC Order requires all providers in the call path to block calls that are “highly likely to be illegal” based on a reasonable DNO list. With this Order the FCC expands the requirement from prior Orders, now requiring all providers to block suspected illegal calls.

FCC does not mandate a particular list for providers to use. This is because providers know their own networks and may be better positioned to determine what types of numbers should be prioritized. As long as the provider can show that the list is reasonable, the provider will be in compliance with the Order. Providers must constantly update the lists and will want to show that their list is comprehensive to safeguard consumers.

This provision of the Order goes into effect 90 days after the order is published in the Federal Register. This order has not been published in the Federal Register as of the date of this blog post, but we should prepare for this rule to go into effect as early May 2025.

b. Special code for immediate notification of blocking to a caller.

The FCC has designed SIP Code 603+3 as the return call the provider must immediately use to notify callers when their calls are blocked based on “reasonable analytics.” This is the exclusive code for this purpose on IP networks. Using this code will ensure that callers learn when and why their calls are blocked based on reasonable analytics, which will allow these callers to access redress when blocking errors occur. This stems directly from the TRACED Act that requires the Commission to ensure that callers receive “transparency and effective redress” when their calls are blocked by analytics, and a single uniform code is the best way to achieve this transparency.

This requirement only applies when the call is based on analytics. If a call is blocked based on a DNO list, there is no requirement to provide immediate notification.

The Order further directs voice service providers to cease using the standard version of SIP code 603, or SIP codes 607 or 608, for this purpose.

The Order does not provide any additional protections for lawful callers because the FCC does not adopt any requirements for blocking based on reasonable analytics and the blocking notification rules adopted in the Order are expansions of our existing rules, rather than wholly new requirements. The Order states:

The record does not suggest that our current protections will be insufficient to protect lawful callers after these particular incremental expansions take effect. Moreover, and as discussed previously, we believe that the deployment of SIP code 603+ will provide significant benefit to callers that, when paired with our existing protections, are sufficient to protect the interests of callers.

This provision of the Order goes into effect 12 months (one year) after the order is published in the Federal Register. This order has not been published in the Federal Register yet, but it could go into effect as early March 2026.

c. No requirement to display caller name (yet).

The FCC declined to require the display of caller name information when a provider chooses to display an indication that caller ID has been authenticated. Although it does not adopt such a mandate, the FCC urges providers to continue to develop next-generation tools, such as Rich Call Data (RCD) and branded calling solutions, to ensure that consumers receive this information and welcome any updates industry has on its progress. The FCC noted that it may consider a mandate in the future, particularly if the timely deployment of such valuable tools does not occur without Commission intervention.

*This blog is not legal advice. Legal advice must be tailored to the particular facts and circumstances of each unique matter.

Citations:

  1. An ATDS or autodialer under the TCPA is a system that has the capacity to use a random or sequential number generator to either store or produce phone numbers to be called. To learn more about this read this blog.
  2. The Order also limited senders of text messages made using an ATDS to a one-time, revocation-confirmation text. This provision took effect in April of 2024.
  3. A SIP (Session Initiation Protocol) code, also known as a SIP response code, is a three-digit numerical code used to indicate the status of a SIP request or transaction, similar to HTTP status codes.

New Yorkers Should Receive the Same Digital Communications Benefits All Non-New Yorkers Receive: Part Two

By on November 20th, 2023 in Industry Insights

In our first blog post on the New York and New York City’s proposed amendments to their debt collection laws, we explored the proposed amendments and the alternative opt-out laws in the federal Fair Debt Collection Practices Act (FDCPA) and the Washington, DC debt collection amendment that achieve the same objectives without the unintended consequences. In this part two, we explore the benefits of digital communications for consumers in all other states and jurisdictions—except New York—as well as these unintended consequences New Yorkers face from these potential amendments.

Since the New York Department of Financial Services (NYDFS) is still considering the comments received to their proposed changes and the New York City Department of Consumer and Worker Protection comment period is open until November 29, 2023, there is still time for these Departments to revise their proposals to match the federal law or Washington DC’s law. Both the federal and DC laws permit debt collectors to communicate digitally about a consumer’s account as long as the digital communications contain clear and conspicuous opt-out language with strict penalties for failing to abide by the opt-out provisions. Washington, DC goes a step further and restricts digital communications to one per week unless a consumer opts in to more digital communications in a seven day period.

Both NYDFS and NY should allow their consumers to have the same experience as the consumers in the rest of the country.

Digital Communication Benefits Consumers, Creditors, and Collectors

TrueAccord knows digital communication benefits consumers, as evidenced by countless consumers who have provided feedback (either directly or online) throughout our years in business, like this consumer who wrote in July 2023:

Digital Communications are a Step Forward in Consumer Protection
Digital communications are easily controlled by consumers and tightly managed by service providers with built in mechanisms to prevent harassment. These methods already provide superior consumer protections than phone calls and letters for several reasons:

  1. All digital communications are written, documented, and can be searched, automatically creating a paper trail of communication between the consumer and the collector.
  2. Electronic communications offer significantly better protection from unwanted or harassing communication compared to phone calls and letters. Consumers hold the power and can easily opt out of electronic communication by clicking “unsubscribe,” marking emails as spam, replying STOP to a SMS, or blocking a number entirely from their device.
  3. Service providers closely monitor inbound communications and those senders who appear to be mass marketing are often blocked from delivery altogether in the spam filters for both email and SMS. Unfortunately for licensed businesses, like law abiding debt collectors who have a legitimate reason for these digital communications, their digital communications may never reach a consumer’s phone or inbox without a very sophisticated delivery strategy that takes into account frequency.

Additionally, email is designed to travel with a consumer forever, whereas addresses and oftentimes phone numbers can change. Email addresses are not ever reassigned by service providers. If consumers frequently change addresses, like military families, email may be the best channel to use to communicate as it lowers the risk of missed communication when consumers forget to update their account information with their new physical address.

Consumers Prefer Digital Debt Collection
By and large, consumers prefer to communicate with their collection agencies digitally—they already predominantly communicate with their banks, creditors, and lenders digitally, so digital collection is a smooth transition when an account moves to collection. As this consumer reported just this past August 2023:

Almost all TrueAccord communications with consumers (96%) happen electronically with no agent interaction. This is possible because our electronic communications contain links to online pages where consumers can take action on their accounts. In fact, more than 21% of consumers resolve their accounts outside of typical business hours—before 8AM and after 9PM—when call centers are closed and it is presumed inconvenient to contact consumers under the FDCPA.

Consumers Should Not Have to Opt-In to Electronic Communications Twice
Consumers already opt in and communicate through primarily digital channels with their creditors. Requiring consumers who have already opted in to have to again opt in to digital communications in order to discuss the same account with a collection agency adds burden to consumers. When a consumer provides their electronic contact information (email address or cell phone number) to the creditor, there should be little doubt that the consumer desires to communicate electronically. If the consumer does not, they can unsubscribe or opt out from continuing to receive messages through these channels.

Consumers are familiar with opt-out methods such as the standard unsubscribe hyperlink in emails and the phrase “Reply STOP to opt-out” in text messages, as they do from all other unwanted communications in other industries. Not only can consumers opt-out from digital communications by simply replying stop to a text or clicking twice to unsubscribe, at TrueAccord consumers can also reply to any digital communication, phone into the office or send us a letter. Even with the multiple options and ease of opt out, few consumers unsubscribe. Of the millions of email communications TrueAccord sends, only 0.04% of consumers unsubscribe, most using the unsubscribe link provided in the email. And out of the millions of text messages we send, all text messages contain the phrase “Reply STOP to opt-out,” and on average only 1.13% of consumers reply stop.

It is a requirement of the FDCPA to include a clear and conspicuous method to opt out of digital communication. Additionally, failure to honor a request to stop communicating in a particular channel is a violation of the law subject to fines that include attorney’s fees. In addition, consumers expect an easy way to opt out, if that option is not available in digital communications (not only is it a violation of the law) but consumers can just as easily report the communication as spam which will result in the inability of the debt collector to send digital messages. All of these protections, along with the clear consumer preference for digital (in part demonstrated by their low opt out rate), negates the need to change the experience to one where the consumer has to take steps to phone in to consent before any digital communications can be sent notifying the consumer of their account in collections as will be the case if the NY and NYC amendments take effect.

Unintended Harms to Consumers if Digital Communications are Restricted

Limiting Digital Communication Use Hurts All Consumers
Requiring special consent for email, text messaging, or other digital channels, when no such consent is required for calls and letters, hurts consumers by increasing unwanted calls and litigation risk. The proposed changes will require debt collectors to capture consent from consumers directly, even when consumers already opted in to text and emails about their account with their creditors. This means that a debt collector cannot text or email to inform the consumer about their account being in collection, provide them with a notice of their rights, and detail possible next steps (the fastest, least bothersome methods of communication).

Instead, debt collectors must mail consumers letters and consumers must affirmatively respond to those letters by calling into the office (something that must be completed during working hours as opposed to electronic communications that can be explored at any convenient time for consumers). This stifles the flow of information that helps consumers make informed decisions about their finances and simultaneously helps creditors make informed choices about recovery options and future lending strategies. After all, we know busy consumers often do not respond to outbound letters.

If consumers don’t respond, then debt collectors place outbound calls—which we also know is no longer consumers’ most preferred method of communication—until they get the consumer on the phone to discuss their account and capture the direct consent that will be required if the NYC proposal takes effect.

When a debt collector cannot reach a consumer to communicate about their debt the creditor is forced to make difficult decisions about how to recover, absent an understanding of why a consumer is not reaching out. This includes a decision about whether or not to file a lawsuit to recover the debt (which, if successful, results in garnishment of a consumer’s paycheck or a lien against a consumer’s property).

In some instances where a consumer might not own property or be employed, a creditor may not file a lawsuit but simply accept the loss. This decision can have negative impacts on all consumers: in the future it will be more difficult or impossible to receive access to credit, not only for the individual consumer who was unable to repay the debt but for others consumers that have poor credit history or no credit history, as lenders become less likely to take risks when there is a lower chance of recovery. Additionally, and depending on the extent of their loss, lenders may choose to raise interest rates and APRs impacting all consumers to ultimately cover these losses.

Non-Digital Communications Can Be Disruptive to Consumers
Consumers use the internet, mobile devices, and their emails for communication, shopping, and financial transactions. When a customer defaults on their account, it is a disruption to their lives to suddenly receive phone calls and letters regarding an account for which they previously only communicated via digital channels. Many of TrueAccord’s creditor-clients, concerned about their consumer experience and their brand image, prefer a seamless transition to debt collection communications and prohibit TrueAccord from making any outbound calls or sending letters on their accounts because their customers have only ever interacted digitally.

This approach has proven to benefit the consumers that need help the most, as one customer explained to us in February, 2023:

New Yorkers Should Receive the Same Digital Communications Benefits All Non-New Yorkers Receive: Part One

By on November 13th, 2023 in Compliance, Industry Insights

The New York City Department of Consumer and Worker Protection (NYC DCWP) just released an updated proposed amendment to its rules relating to debt collection. This updated amendment changes significantly more than the first proposed amendment released by NYC DCWP last year. Interestingly, this update contains revisions that are similar to the New York Department of Financial Services (NYDFS) proposed amendments to New York’s debt collection law, 23 NYCRR 1, that NYDFS released last year. After receiving a number of comments to the proposal, including a comment from TrueAccord, NYDFS paused the rulemaking and has not yet released any revised proposal. Both of these departments, NYDFS and NYC DCWP should change their proposed amendments to give New Yorkers the same digital communication benefits all non-New Yorkers receive.

The NYC DCWP and NYDFS proposed amendments are designed in part to align with the federal Consumer Financial Protection Bureaus’s Debt Collection Rule, Regulation F, that took effect in November 2021. Even though consumers often prefer to communicate digitally, the NYDFS and NYC DCWP updated proposals are more strict than Regulation F, particularly as it relates to the proposed restrictions on digital communications. While attempting to provide additional protections for consumers when debt collectors reach out using digital channels, these NYDFS and NYC DCWP restrictions create unintended consequences that raise barriers for NY consumers to correspond with collection agencies in their channel of preference and hinder communication efforts. The effect will raise the number of lawsuits brought against NYC consumers and ultimately increase the cost of credit for all consumers across the US to offset New York losses.

As a company that predominantly leverages digital communications for virtually all aspects of our customer interactions, TrueAccord has unique experience and information from serving over 20 million consumers, which showcases the benefits of digital communication in collections. Small edits to these proposed amendments can have the same desired impact (protecting consumers from a barrage of digital debt collection messages) without limiting the ability of debt collectors to proactively reach out—in fact, both the federal debt collection rule, Regulation F, and Washington, DC’s recent debt collection law amendments restrict the frequency of outbound digital communications and include specific requirements for opt-outs on all communications with severe penalties for failing to honor a consumer’s request.

In this two part blog series, we explore the provisions in these proposed amendments that focus on restrictions on digital communications, the unintended consequences to consumers when laws require opt-in instead of opt-out rules for debt collectors, and how the proposals could be changed to accomplish the same result without placing barriers on consumers ability to communicate in their channels of preference—read part two here. This first installment focuses on the provisions of the law, consumers preference for digital communications, and the small changes that could be implemented before these amendments are final. The second installment seeks to provide information about the benefits of digital communications for consumers in all other states and jurisdictions—except New York. If you are impacted by the current NYC proposal, consider speaking at the upcoming hearing (virtually or in person). Information on how to register is below.

Proposed New York State and New York City Amendments

Three proposed amendments, two different departments, two different jurisdictions, and potential unintended consequences that can harm consumers. Let’s start by evaluating the different proposals by jurisdiction.

New York’s Approach to Digital Communications
The New York debt collection law, 23 NYCRR 1, which took effect in 2019, already restricted the ability of a debt collector to reach out proactively to consumers via email without first having direct express consent from the consumer. This means that a debt collector must first call a consumer to obtain consent before the collector could send an email message about the account. While a debt collector can send proactive emails in an effort to obtain consent, to comply with the law these emails cannot reference the reason why a consumer would want to opt-in to communicate by email with the company, (i.e. about a past due account) and cannot even reference information about the account. So, they ultimately sound like spam.

For example, if a consumer received a message from a company they do not know, without any information about why the company is reaching out and asking for consent to email, why would a consumer opt-in?

The result, not surprisingly, is that New York consumers who had already opted in to communicate via email about the account with the creditor would, after falling behind on payments and being referred to a debt collector, only receive phone calls and letters from debt collectors.

New York’s First Proposed Amendment
December 2022 NYDFS released its first proposed amendment to its debt collection rules. Comments were due February 13, 2023. The first New York proposed amendment also never became final. The amendment included the following:

  • Revised definitions of communication, creditor and debt and a new definition of electronic communication
  • Revised requirements for the validation notice, including that the initial communication must be made in writing to avoid having to send another written communication within 5 days of the initial communication
  • Revised requirement that the validation notice cannot be made by electronic communication but may be made in the form requested by a consumer to section 601-b of the General Business Law
  • Revising the disclosure requirements for debts that have passed the statute of limitations for the purpose of filing a lawsuit
  • Revisions to the substantiation requirements, including a 7 year retention period and requirement to provide full chain of title
  • Revisions to the requirement for a debt collector to obtain consent from a consumer before emailing, including, extending the consent requirement to text messages, requiring the consent to be given in writing and retained for 7 years, requiring electronic communications to include clear and conspicuous opt-outs, requiring collectors to honor such opt-outs, and explaining opt-outs are effective upon receipt
  • New provisions covering the relationship with other laws, clarifying, for example, that local laws are not inconsistent with this law if they afford greater protections
  • New section on severability making clear that if any court rules one section of the law to be invalid, it does not invalidate the other sections of the law

The proposed changes to Section 1.6(b) seek to extend the prohibition on a debt collector to reach out proactively to consumers via email without first having direct express consent from the consumer to text messages. This limits the only digital channel currently available for proactive outbound debt collection communications with consumers in New York.

New York City’s Approach to Digital Communications
New York City’s debt collection laws did not contain any restrictions on digital communications. But, after the New York law restricting proactive emails took effect in 2019, New York City consumers who had already opted in to communicate via email about the account with the creditor would, after falling behind on payments and being referred to a debt collector, only receive phone calls and letters from debt collectors.

New York City’s First Proposed Amendment
November 2022 NYC DCWP released its first proposed amendment to its debt collection rules, comments were due December 5, 2022. These first NYC proposed amendments contained changes to align their laws with those of New York, however, the proposals never became final. The amendments included the following:

  • Revised the out of statute disclosure agencies must provide on communications with consumers whose accounts have passed the statute of limitations for the filing of a lawsuit to recover the debt
  • Revised requirements for debt collectors to maintain records of attempted communications, complaints, disputes, cease and desist requests, calls, including what calls are recorded and not recorded, credit reporting, unverified debt notices, and communication preferences (if known) as well as unsubscribes or opt-outs from particular channels
  • New definitions for attempted communication, electronic record, electronic communication, clear and conspicuous, language access services and limited content message
  • New prohibition on electronic communications unless the debt collector sent the initial communication with the validation notice by mail and the consumer opted in to electronic communications with the debt collector directly and clear and conspicuous opt-outs without penalty or charge on all electronic communications
  • Revised unconscionable and deceptive practices to include: adding attempted communications anywhere communications appeared, such as adding attempted communications to the excessive frequency prohibition
  • New prohibition on social media platform communications unless the debt collector obtains consent and communicates privately with the consumer
  • New rules on requirements prior to furnishing information to credit reporting agencies
  • Revised validation notice disclosures and obligations for translating, if notices are offered in different languages

New York City’s Revised Amendment
November 2023 NYC DCWP released an updated NYC proposed amendment. Comments can be submitted through November 29, 2023. A hearing will be held that same day at 11AM. The updated version contains all of the changes suggested in the first proposal as well as:

  • Additional revisions to what information is required to be maintained in debt collection logs that would require major changes to all collection software systems
  • Additional new definitions for covered medical entity, financial assistance policy, itemization reference date, original creditor and originating creditor
  • Clarifies that any communications required by the rules of civil procedure in a debt collection lawsuit do not count toward frequency restrictions
  • New disclosures for medical debts as well as specific treatment of medical accounts, such as validation procedures and verification of covered medical entity obligations prior to collections

These amendments align the New York City law to that of New York. If these amendments become final, New York will be an opt-in jurisdiction instead of an opt-out jurisdiction, meaning debt collectors must communicate by telephone or letter to obtain consent to text or email, even when a consumer already opted into digital communications about their account. This puts New Yorkers at a disadvantage from consumers in all other states who are able to communicate electronically under the provisions of the federal Fair Debt Collection Practices Act (FDCPA) and Regulation F.

Opt-Out Jurisdictions Offer Consumers the Same Protections

The rest of the United States have approached debt collection attempts via digital communications very differently from New York. For all consumers outside of New York, debt collectors may send proactive debt collection communications via email or text messages. The laws require all digital communications contain clear and conspicuous opt-out methods (unsubscribe flows in emails and “reply STOP to opt-out” in text messages) with strict penalties for debt collectors who do not honor a consumer’s request to opt-out of digital communication channels. Digital communications also fall under the frequency limitations of the FDCPA and Regulation F.

Only one other jurisdiction to date has created additional restrictions related to digital communications that exceed the protections in the FDCPA and Regulation F. Washington, DC amended their debt collection law Protecting Consumers from Unjust Debt Collection Practices Amendment Act of 2022, and the changes that took effect in January 2023. DC remains an opt-out jurisdiction with specific requirements for opt-outs on all email and text communications with severe penalties for failing to honor a consumer’s request, but also added a specific frequency limitation on digital communications. Debt collectors are only permitted to send a consumer one digital communication per week—one email or one text message (one time in a seven day period). A debt collector may only communicate digitally more than one time per week after a consumer opts-in to additional digital communications.

As a result in these opt-out jurisdictions, consumers can still receive the digital communications they prefer without having to have phone calls attempting to get them to opt-in to digital communications, like the consumers in New York. Additionally, with these opt-out jurisdictions consumers learn about their account faster, can explore options on their own time, and receive the additional benefits that come with early communication about their debts—such as setting up a payment plan, having a credit reporting tradeline updated or deleted, providing evidence of fraud or identity theft, and disputing all or portions of the balance. New York consumers who do not answer their phones are less likely to receive these benefits that come with knowing there is a debt in collection and the options to resolve.

Ultimately, New York still has time to amend their proposals to ensure their consumers receive the same treatment as all other consumers in the US.

Consumers Prefer Digital Communication

By and large, consumers prefer to communicate with their collection agencies digitally—they already predominantly communicate with their banks, creditors, and lenders digitally, so digital collection is a smooth transition. For example, almost all TrueAccord communications with consumers (93%) happen digitally with no agent interaction because the digital communications contain links to online pages where consumers can take action on their accounts. In fact, more than 21% of consumers resolve their accounts outside of typical business hours—before 8AM and after 9PM—when it is presumed inconvenient to contact consumers under the FDCPA. In fact, consumers often post publicly about their positive experience with digital collections:

We believe restricting digital methods to reach and serve consumers will disadvantage vulnerable populations of consumers who primarily conduct most of their affairs digitally. According to the Pew Research Center, “reliance on smartphones for online access is especially common among younger adults, lower-income Americans and those with a high school education or less.” As the consumer described above, TrueAccord’s approach of sending digital communications helps consumers easily navigate to our website and perform actions at their convenience online.

We will continue to explore the impact of these proposed amendments in the second blog post of this series, including how:

  • Limiting digital communication use hurts all consumers
  • Multiple opt-in requirements burden consumers
  • Non-digital communications can be disruptive to consumers
  • Email and text messages are a step forward in consumer protection

Register to Speak at the Upcoming Hearing

Sign up to speak for up to three minutes at the hearing by emailing Rulecomments@dcwp.nyc.gov. You do not have to be present at the hearing to speak if you join the video conference using this link, https://tinyurl.com/z3svub58, meeting ID: 255 089 803 499 and passcode: 8HGNSw.

Read Part Two of Our Series: New Yorkers Should Receive the Same Digital Communications Benefits All Non-New Yorkers Receive

Discover the unintended harms New Yorkers face if digital communications are restricted by proposed amendments to New York and New York City’s debt collection laws and the digital communication benefits consumers get in all other states here»»

Debunked! Four Compliance Myths and Misconceptions for Collections

By on September 16th, 2022 in Compliance, Industry Insights

Trying to keep up with regulations in debt collection can feel overwhelming especially with new cases and federal guidance coming out regularly interpreting the law and states actively amending or creating new laws that impact debt collectors, original creditors, and current creditors.

Here are four common compliance myths and misconceptions for collections debunked (no detective work needed)!

Myth #1: Under Regulation F consumers are not protected from harassment

False! The Fair Debt Collection Practices Act (FDCPA) absolutely prohibits harassment of consumers see 15 USC 1692d. No matter how a debt collector reaches out to a consumer, by phone call, email, SMS, voicemail, even social media—a debt collector cannot harass a consumer through one channel or through a combination of channels. Regulation F made clear that harassment is the totality of the circumstances, “the cumulative effect of all [communications – calls, emails, text messages] may constitute a violation of the harassment provision.”

Email and cell phone providers offer additional built in protections for their customers to help with rogue actors who fail to abide by the harassment provisions in the FDCPA. These service providers have their own rules and will prevent or block companies who try to harass consumers. In fact, collectors or marketers who use emails to harass will experience a less than 5% chance of their email reaching the consumer’s inbox (“inboxing rate”) essentially barring them from using email to reach consumers. Consumers have the power to not only unsubscribe (as required in Regulation F from these digital channels) but also have the power to mark inbound messages as spam which will impact the inboxing rate essentially barring abusers from the ability to deliver messages at all.

As a result, digital channels offer consumers significantly better protection from unwanted or harassing communications. Digital communications allow consumers to quickly register their preferences by clicking on an unsubscribe link or replying stop to opt out. Digital communications also offer search and archiving options, automatically creating a paper trail of communications between the consumer and the collector. There is no unsubscribe or reply stop option for calls or letters.

Myth #2: Debt collection requirements are only governed by federal laws

False! Individual states and even cities or municipalities have been implementing their own more restrictive laws governing debt collection. For example, New York law requires a debt collector to obtain consent to email a consumer about their debt, a requirement that does not exist in the federal FDCPA or Regulation F. Washington, DC just revamped their debt collection rules with new restrictions on calls, emails, texts and social media including communication caps for each of these methods that take effect on January 1, 2023 when the temporary ban on collections (implemented during the pandemic) end.

In addition to state and local debt collection rules, other regulations can apply as well, even if they aren’t specific to the industry. Some of the most anticipated regulations rolling out state-by-state focus on information security and data privacy, which greatly affect debt collection information security practices despite not being named outright.

Even if debt collection regulations are followed meticulously, businesses can still fail to meet compliance requirements if they don’t perform due diligence on other laws applicable to their operations.

Myth #3: Business must send the initial communication by letter

False! The FDCPA spells out that a debt collector must provide the validation notice in the initial communication or in writing within 5 days of that initial communication see 15 USC 1692g(a). This means that when the full validation notice is provided over the phone in the initial conversation or in the initial communication by email (as confirmed in Regulation F), a debt collector satisfied their obligation. The requirement to send the disclosure in writing is only triggered if the disclosure is not provided in the initial communication.

Fortunately, the CFPB provided a model disclosure notice in Regulation F that can be adopted to send by email and permits the use of hyperlinks. The ability to use hyperlinks in the model debt validation notice allows for consumers to communicate their preferences immediately and more effectively than when using the disclosure by US mail. For example, a consumer can use the dispute flow links in the email to explain why they are disputing the debt while looking at the additional details about the account that are visible in an online portal whereas the check boxes on the model validation letter do not allow for this flow of information and must be mailed back to the debt collector for processing. This is another example of the advantages of digital communications over letters and calls.

Myth #4: Meeting compliance obligations is more difficult for digital debt collection practices

False! As long as you have a solid team of legal compliance advisors and a mature compliance management system, digital communications actually make it easier to comply. Digital is faster (making it easier for consumers to respond or opt-out by just replying to an email or text. Digital provides a written history of communications between the consumer and the collector that can be archived automatically through existing features in email cell phone services. Digital communications are easily controlled by consumer and more tightly managed by providers, with built in mechanisms to discourage and blacklist harassers.

Plus, there are a growing number of federal court cases highlighting best-practices in digital compliance:

The Future of Collections & Compliance

Compliance can get complex quickly, especially for debt collectors and any lender trying to recover delinquent funds—and that complexity will only continue to grow over time as technology and consumer preferences evolve. How can your business keep up today and tomorrow?

Join us Thursday September 29th at 1pm ET for our interactive webinar, The Future of Collections & Compliance, hosted by TrueAccord Associate General Counsel Lauren Valenzuela and Director User Experience Shannon Brown.

Reserve your space now for an interactive discussion on:

  • Cutting edge digital collection compliance
  • The role of the legal team in creating a digital collection strategy
  • How compliance drives collection revenue
  • The future of digital compliance

Register now for the upcoming webinar»»

*Kelly serves as TrueAccord’s Chief Compliance Officer and General Counsel. This blog is not legal advice. Legal advice must be tailored to the particular facts and circumstances of each unique matter.

Regulators Care As Much About Consumer Preference in Debt Collection as Creditors

By on March 25th, 2021 in Industry Insights
TrueAccord Blog

Recent regulatory activity makes it clear: regulators care as much about consumer preference in debt collection as creditors. In this blog post, Kelly Knepper-Stephens, TrueAccord’s VP Legal & Compliance, highlights the recent laws and regulations designed to protect consumer preferences in debt collection.

At a time when consumers’ power to impact a lender has increased dramatically, Klarna made the decision to outsource 1,005 of its debt collection activities. Jan Hansson, Vice President Debt Collection for Klarna, recently explained the reasoning behind that decision in TrueAccord’s recent webinar, Digital Debt Collections 101.

Jan explained how Klarna manages brand image with its collection partners, using “soft value metrics” to evaluate success, such as the number of consumers who return to use Klarna after having been in debt collection on a Klarna product. The fact that consumers return to Klarna after being in debt collection demonstrates that collections can be a positive process. Jan emphasized the importance of ensuring that debt collection is aligned with your total customer journey “so that any debt collection continues to build on your positive brand image.”

Honoring a customer’s debt collection preferences is the key. As Ohad Samet, founder of TrueAccord stated in Digital Debt Collections 101, “customers want to be contacted at the time and place and channel that is convenient to them…they would like to be in control of that.”

Federal and state lawmakers, who continue to pass laws and regulations designed to protect consumer preferences in debt collection, share the same consumer preference mindset of creditors like Klarna. A quick look at the most recent federal activity showcases this fact.

The CFPB’s Debt Collection Rule
On November 30, 2020, the Consumer Financial Protection Bureau (CFPB), published Regulation F, the first attempt to refresh the Fair Debt Collection Practices Act for modern communications. Debt collectors and creditors have until November 2021 to align their processes to these new rules, which are chock-full of efforts to protect consumer preference including:
• Requirements to uphold and pass on consumer requests to stop calls, not be contacted at certain times, and not be communicated with at particular locations (home, work, etc.)
• Steps to identify a consumer’s location to ensure communications occur between 8AM – 9PM, including when a consumer’s zip code and area code suggest different time zones
• Requirements for clear and conspicuous ways to unsubscribe from text messaging, emails, and other forms of digital communications
• Frequency restrictions, not just for calls, but for the frequency of contact efforts in the entire outbound communication strategy.

Fortunately for TrueAccord, our digital debt collection strategy was built for consumer preference and already meets most of the rule’s new requirements. As Ohad mentioned in the webinar, 96% of all TrueAccord communications are automated, and the other 4% are inbound communications, which makes our Customer Engagement team a customer care center.

The TRACED Act
In response to continued consumer complaints and pressure over unwanted robocalls, Congress passed the Pallone-Thune TRACED Act in 2019 to deter and punish robocall abuse. The law required the FCC to adopt and publish regulations that “help protect a subscriber from receiving unwanted calls or text messages from a caller using an unauthenticated number,” which the agency did in late 2020. The provisions of the TRACED Act and its implementing FCC regulations ultimately aim to increase consumer choice options mostly around the ability to identify and block unwanted calls by:
• Requiring carriers to implement the call authentication framework of STIR/SHAKEN which allows the consumer to identify the identity of an inbound caller;
• Requiring carriers to implement a reassigned number database so that companies can determine, in advance of calling, whether a given phone number for a consumer has been reassigned to a different person.

We are just now beginning to see companies, including telephone carriers, announce their compliance practices to implement these FCC Orders. For example, contact center platform service provider Twilio, headquartered in San Francisco, recently announced updates to their terms of service and acceptable use policy. At least one carrier, T-Mobile, has gone as far as to ban debt collection text messages as reported by InsideARM.

As lawmakers and lenders focus on consumer preference, successful debt collection compliance programs must incorporate consumer preferences into their practices not only to meet the new regulatory requirements, but also to provide a positive customer experience that consumers expect.