Is your business ready to comply with the new FDCPA requirements? NEVA can help.
Regulation F to 12 C.F.R. 1006, which was enacted by the Consumer Financial Protection Bureau (CFPB), is the first set of comprehensive federal debt collection regulations interpreting the Fair Debt Collection Practice Act (FDCPA). It took effect on November 30, 2021, in a year that the CFPB imposed more than $60 million in penalties on 30-plus companies, including $15 million for direct violations of FDCPA.
Given President Joe Biden’s increased enforcement and monetary penalties for unfair and deceptive acts and practices, companies must ensure that they’re completely ready for the new regulations in order to reduce the chances that they will be accused of a violation in state and federal courts. An important element of the regulations is the way it governs the behavior of contact center agents at debt collectors.
Short acronym history
Before delving into the new regulations, let’s look back on the history of the FDCPA, which was enacted in 1977, long before the internet or cellphone existed. The CFPB was established in 2011, following the global financial crisis, to consolidate consumer financial protection with one agency. The new regulations are the culmination of an eight-year journey to clarify the law and update it for modern modes of communication.
The FDCPA regulates collection practices for medical debts, credit card debt, mortgages, car loans, and other personal debts, used by third-party debt collectors that collect on behalf of debt owners.
The CFPB has jurisdiction over credit unions, banks, mortgage services, and other financial institutions in the U.S. with more than $10 billion in assets. It also has jurisdiction over any vendors for these institutions, as well as payday lenders, private student lenders, mortgage originators, consumer debt collectors, and more.
The new regulations force financial institutions to play a more active role in managing their vendors. They are now held responsible for ensuring that their third-party vendors comply with all regulatory frameworks, including FDCPA. The American Bar Association foresees that the CFPB will use the regulation as a framework for enforcement actions against first-party creditors.
The new regulation will have a profound effect on how large financial institutions and debt collectors do business, design collection strategies, and manage communications with debtors. Let's review some of the major implications for the contact center.
NEVA for non-harassment compliance
Regulation F expands on the FDCPA’s prohibition of unfair and unconscionable conduct. It prohibits the use of coercive advertisements, the use of obscene or profane language, and the use or threatened use of violence against a consumer.
Here’s how NEVA (NICE Employee Virtual Attendant) can help your contact center to comply. NEVA is a virtual assistant that lives on an agent’s desktops, watches their activities and listens to each call. Using NICE’s technology she can identify when an exchange with a customer is getting heated. She then intervenes, reminding the agent about the new regulation and sending their supervisor an alert about a violation risk.
The NICE recording function ensures that the collection agency complies the new requirement of retaining telephone call logs as evidence of compliance or noncompliance with the prohibition against harassing telephone calls for at least three years from the date of the call.
NEVA for time-barred-debt compliance
With regulation F, debt collectors are now prohibited from bringing or threatening to bring legal actions against consumers for debts on which the statute of limitations has expired. This This is a significant change in the law, as it creates a strict liability cause of action that a consumer can take against a debt collector for pursuing a potentially stale debt. It is not necessary for the borrower to prove that debt collector knew that the statute of limitations had expired to take legal action.
NEVA can calculate the timeframe for each debt and compare it to the statute of limitation in each state. If NEVA identifies that the statute of limitation has expired for a particular debt, NEVA will notify the agent that they cannot threaten to bring legal action, and will provide an alternative script to use to encourage the consumer to repay the ‘zombie debt’. If NEVA recognizes that the agent is threatening the customer with legal action, in violation of the new regulation, she will notify their supervisor.
NEVA for voicemail scripts
Regulation F creates a new type of communication under the FDCPA: the limited content message. This new type of communication allows a debt collector to leave a voicemail message for a consumer. This resolves the dilemma debt collectors faced in the past: either leaving a message and risk violating the FDCPA if that message was heard by a third party, or not leaving a message and failing to communicate with the consumer.
When NEVA recognizes that the call has reached voicemail, she will automatically create a script. She will collect the necessary data from the relevant business systems to compose a voicemail message including the legally mandated information:
- a business name for the debt collector that does not indicate that the company is in the debt collection business;
- a request that the consumer reply to the message;
- the names of one or more natural persons the consumer can contact to reply;
- a telephone number that the consumer can use to contact the debt collector; and
- if applicable, the opt-out disclosure required by § 1006.6(e) of the FDCPA.
Debt collectors can also include some optional information such as suggested dates and time to reply. Voicemails that don’t follow these rules are not considered limited-content messages, so letting NEVA help with the script is essential. This can be a game changer for debt collectors, who were limited in the past to collecting only from consumers who answered their calls. As only 18% of the population listen to voicemails from numbers they don't know, using NEVA will help companies to collect more debts.
NEVA is the Attended RPA assistant designed specifically with the employee in mind. Her capabilities ensure real-time process optimization and automation of desktop tasks, resulting in improved employee and customer experiences. Learn more about how she can guide compliance in your contact center.
