Insights on the meaning of consumer under the FDCPA, who they may authorize to discuss their account and when and where that communication may happen. Editor’s note: This article is available for members only.
12/1/2020 11:00
In our last report reviewing components of the Consumer Financial Protection Bureau’s final debt collection rule to implement the Fair Debt Collection Practices Act, we looked at some of the key definitions in the rule and the limited-content message.
Now we’ll dive into the who, where, and when of communicating with consumers.
Definition of Consumer
In the definitions section, at Section 1006.2(e), the rule reiterates the definition of “consumer” from FDCPA Section 1692a(3), but it adds a note about how that term is used in Section 1006.6, which addresses communications in connection with debt collection, and it includes a statement that the bureau may later clarify the scope of the term “consumer” for circumstances involving deceased consumers.
With respect to the meaning of “consumer,” Section 1006.6(a) generally restates the terms of FDCPA Section 1692c, but it adds some nuance to the definition of “consumer” for purposes of FDCPA communications.
For one thing, at Section 1006.6(a)(5) the rule adds that for communications about debt collection, the term consumer includes “[a] confirmed successor in interest” as defined in Regulation X and Regulation Z.
In addition, the comments to Section 1006.6(a) make clear that for purposes of communications about debt collection, if the consumer is deceased, the term “spouse” includes a surviving spouse, and the term “parent” includes a surviving parent of a minor. See Comments 6(a)(1) and (2) at Supplement I.
In addition, the official interpretation makes clear that “executor or administrator of the consumer’s estate” includes a “personal representative.” See comment 6(a)(4).
A personal representative is any person “authorized to act on behalf of the deceased consumer’s estate,” including but not limited to:
- Personal representatives under the informal probate and summary administration procedures of many states;
- Persons appointed as universal successors,
- Persons who sign declarations or affidavits to effectuate the transfer of estate assets, and
- Persons who dispose of the deceased consumer’s financial assets or other assets of monetary value extrajudicially.
Inconvenient Time and Place
Now that we know the who, let’s look at the when and where.
The CFPB’s final rule restates that a debt collector must not communicate or attempt to communicate with a consumer at any time or place the collector knows or should know is inconvenient to the consumer. For the most part, the rule reiterates the provisions of the statute on this point.
But, again, the rule does add some welcome clarifications:
- If a consumer initiates a communication with a debt collector at a time or from a place that the consumer has previously designated as inconvenient, the collector may attempt to respond once at that time or place through the same medium of communication.
- For electronic communications (e.g., email or text message), the timing of a communication means the time that the debt collector sends the message, not the time that the consumer receives or views it.
- In light of mobile technology and inconvenient call times (i.e., 8 a.m. to 9 p.m. local time at the consumer’s location), the CFPB has provided a “safe harbor” such that if the debt collector has conflicting or ambiguous information on the consumer’s location, the collector will be deemed to have complied with Section 1006.6(b)(1)(i) if the debt collector communicates at a time that would be convenient in all locations at which the debt collector’s information indicates the consumer might be located.
If your file indicates that the consumer is in Los Angeles and you call at 7 p.m. Pacific time but, unbeknownst to you, your consumer moved to New York, your call hitting the consumer’s cellphone in New York at 10 p.m. local time would fall within this safe harbor. Of course, once you know the consumer is in New York, you must update your file to reflect that location and adjust calling times accordingly. See comment 6(b)(1)(i)-2 for the examples of this safe harbor.
Cease Communications or Refusals to Pay
What happens if you reach a consumer, but they request for communications to stop or they refuse to pay a debt? The language in the final rule will probably sound familiar.
Here, the rule restates that a debt collector must cease further communications with a consumer after the consumer has notified the debt collector in writing that they refuse to pay a debt or want to cease further communications with the collector. (Some commentators pushed for this to be an oral-notice standard, but the bureau stuck with the language of the statute in requiring written notice of refusals to pay or cease-communication requests under FDCPA Section 1692c.)
Again, the bureau made clear that for consumers’ electronic notification to debt collectors about refusals to pay or requests to cease communication, the notice takes effect when the debt collector receives it, not when the consumer sends it. So, when that consumer sends you a no-pay notice by mail on the first of the month and your system schedules a call first thing the next morning—before you receive the no-pay notice letter by mail—you should be in safe waters.
Members can read more in-depth analysis of communication requirements in the CFPB’s final debt collection rule here. Next in our summary of the rule will be more insights on how to communicate with consumers via email as outlined in the CFPB’s rule.