Eli5 What is Regulation F and how does it impact debt collection?
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It’s a rule established by the CFPB that defines the actions that debt collectors are allowed to use when collecting consumer debt. It’s a major update to the main federal law governing debt collection (the Fair Debt Collection Practices Act).
The main limits are:
* No threats to sue over debts whose statute of limitations has expired. If the threatened person doesn’t know that the threat is just a bluff they may prioritize the repayment of a debt after such a threat.
* Collectors need to contact debtors before reporting the unpaid debt to collection agencies. It was much cheaper to report the unpaid debt, and wait for people to notice the hit to their credit and contact the collector (that ensures all contacts are people motivated to pay the debt). However that also means people were surprised with negative credit changes.
* The initial notice needs to contain more information. The bureau has provided a [model notice](https://www.consumerfinance.gov/rules-policy/regulations/1006/2021-11-30/b/) showing all the information they suggest providing.
* The collector needs to provide one of 5 date options (collectively called an itemization date) that assists debtors in judging when the statute of limitations has expired.
* The collector is required to provide significantly more information about the original debt (like the original creditor’s name, the account number and similar information).
* The collector must include prompts to allow debtors options to dispute the debt.
* The notice must include disclosures of the debtors rights.
* Email and text were not in the FDCPA because it was passed in 1977. The regulation updates the rules for using these to contact debtors.
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