The new rules for debt collection are finally here. The Consumer Financial Protection Bureau (CFPB) issued last October the final rule to revise Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA).

Passed in 1977, the FDCPA is silent on collection agencies’ use of e-communications because they simply didn’t exist at that time.

The CFPB’s 653-page final rule updates Regulation F, allowing debt collectors to interact with consumers across all forms of electronic communications.

For the first time, the CFPB rules give debt collectors explicit permission to use a wide range of communication methods to interact with consumers for collections, including text, email, and social media messaging.

It took more than seven years and over 14,000 comments from consumer advocates, debt collectors, and other stakeholders in developing the CFPB final rule.

The CFPB rule also becomes effective one year after it is published in the Federal Register.

While the new rules set out some limitations, it also offers flexibility which both protects consumers and creates efficient resolution of debt.

Contact Limits

Nearly a third of Americans with a credit file have some type of debt that’s in collections, which typically means they’d receive phone calls about their outstanding balance.

The new rules introduce a limit on the number of times debt collectors can communicate with consumers. Only 7 calls within a 7-day period are allowed for one debt and then once every 7 days after that.

However, this limit is no longer a bright-line rule. While 7 or fewer calls is presumed lawful, this presumption can be rebutted by evidence of harassment.

The rules also specify, however, that if a consumer tells a debt collector to “stop calling,” they are barred from calling them.

As for electronic communications, there is no specific numerical limit. Instead, the standards of prohibitions on harassment and abuse apply.

Consumer Preference Becomes King

With the new rule, consumers are given the right to easily opt out of electronic messaging and designate their preferred method of contact.

This gives consumers more control over how often and through what means debt collectors can communicate with them.

For example, a consumer may choose to designate a particular medium, such as social media, as one that cannot be used for debt collection communications.

Efficient Handoff to Collections

Consumers can become confused when they get contacted by a company they don’t know and a telephone number they don’t recognize.

One great concept introduced in the final rules is the concept of the handoff letter.

Debt collectors can take advantage of the safe harbor against third-party disclosure by sending an email to a consumer at an email address that the consumer provided to the creditor.

However, the creditor must have sent a handoff letter / communication to the consumer at least 35 days prior to the debt collector using that email address.

The handoff letter must be sent by the creditor and must “clearly and conspicuously” disclose that the debt has or will be transferred to the debt collector.

This method not only limits the risk of third-party disclosure, it also puts consumers on notice that someone other than the creditor will be contacting them, listing the name of the debt collector in question.

This helps consumers be more comfortable and less likely to think that the communication is spam or fraud.

Impact on Financial Communications

Debt collectors say the new rules will make it easier for them to reach borrowers; consumer advocates fear it will unleash a surge of intrusive communications.

There is a fine line in collections between reminding your patients of what they owe and harassing them. The FDCPA draws that line.

For example, calling patients to remind them of their debts only during “reasonable” hours between 8 am and 9 pm.

Now that debt collectors are explicitly allowed to communicate via text, email, or social media messaging, it should be in the context of improving the patient’s financial experience.

Patients get texts all the time for their doctors’ appointments and reminders. This is why communicating with patients through their preferred method makes the debt collection experience smoother and better.

If patients are contacted according to their preference, they are not caught off guard and they are more likely to be in a better state of mind.

Patients are more likely to work toward payment with someone friendly, rather than with someone they find threatening.

With millions of Americans financially struggling amid the economic fallout from the global pandemic, the last thing they need right now is to be harassed by a debt collector.

About Mnet Health

We believe every patient deserves a helpful, transparent, easy to navigate financial experience in healthcare.

Mnet is the premier revenue cycle management & technology provider to the surgical industry. We provide custom patient-pay solutions to surgical hospitals and ambulatory surgery centers. As of 2020, Mnet Health partners with over 700 surgical facilities nationwide and is the preferred vendor of both United Surgical Partners International (USPI) and Surgical Care Affiliates (SCA) – both directly with and in support of centralized billing offices.

Mnet’s custom brand, PaySUITE, is a white-labeled payment technology platform that helps surgical facilities and their providers grow their business by helping patients pay. Mnet’s patient-pay solutions significantly increase self-pay collections while creating a better financial experience for patients. For more information, visit