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CFPB Debt Collection Rules: What You Need to Know

Posted by Credit Management Company on Oct 27, 2022

In November 2021, the new Consumer Finance Protection Bureau (CFPB) Debt Collection Rule went into effect. This rule limits how often a collector can contact a debtor while also establishing rules around social media and what information must be included in a voicemail. The act protects patients and makes it illegal for debt collectors to threaten consumers when trying to collect on medical accounts. If you are a hospital or medical provider, there are five key things that you should know about how this new rule changes medical collections. 

Debt collectors are required to share information about debt. 

Medical practitioners are required to communicate with consumers and provide information about their debts when attempting to collect. Trying to manage this in-house often requires special training for staff members working on collection accounts. Notices about debt are called validation notices. If your staff is unfamiliar with the process, they’ll need to include the following information in a standard validation notice:

  • Creditor name 
  • Debt collector name and mailing information
  • Debt account number
  • Debt itemization (fees, payments, credits, interest)
  • Current amount owed
  • Their rights as a consumer

The validation notice must include a form that can be sent back to the collector if the patient is disputing the debt. 

Debt collectors can call consumers a limited number of times.

Debt collectors may not call indebted consumers continuously, and they may not harass consumers. This means collectors may not call more than seven times within a seven-day period. Debt collectors also may not call within seven days after talking to the consumer about their debt. Failing to follow this rule could create problems, and potentially fines, for your company. 

Debt collectors must take several steps before contacting a credit reporting company.

Before you can contact a credit reporting company, you must speak to the consumer over the telephone or in-person, or you must mail a letter or send an electronic communication about the debt. You must also wait a reasonable amount of time in case the communication is returned undeliverable. Usually if the debt collector sends a validation notice, this fulfills the requirement. However, it can take time and resources to make sure proper validation notices and communications have happened before attempting to report the debt to a credit reporting company. 

Debt collectors can contact consumers over social media but must follow strict rules. 

It is possible to contact a consumer over social media, but messages must be private. The person contacting them about the debt may not publicly shame patients or call out their debts. People collecting debts must also identify themselves as a debt collector and must provide a way to opt out of their communication on the social media platform. When you’re attempting to collect debts in-house, make sure your staff understands this rule and follows it. 

Debt collectors may leave "limited content" voicemail messages.

A limited content voice mail is the only type of voicemail that a debt collector may leave. It must state the basic, required information and nothing more. 

The message must include the debt collector's business name, a telephone number to return the call, a request to respond to the message, and the name of the person to call. There should not be any other conversation or information in the message. If you were previously using a debt collection script, make sure it has been updated to reflect this change in the rule. 

Debt collection practices evolve over time, especially as newer social media and online communications platforms emerge. Credit Management Company provides full-service accounts receivable and collection management programs for healthcare companies. We stay ahead of the curve on industry changes, and we can help you improve collections and communications with your patients. Contact us today for more information about our collection management programs. 

Topics: Bad Debt, Best Practices