A Quick Refresher on Regulation F: How to Comply with Limited Content Messages and Call Frequency Requirements
How often can I contact a debtor? And, more importantly, what can I say?
Despite Regulation F being around for a few years, our team continues to receive these questions due to its complexity. Enacted in November 2021 by the Consumer Financial Protection Bureau (CFPB) under the Fair Debt Collection Practices Act (FDCPA), Regulation F contains rules on how creditors and third-party collectors communicate with debtors. Two critical aspects of the regulation include Limited Content Messages (LCMs) and the restrictions on telephone call frequency.
We decided to tackle the topic during our popular What’s On Tap? webinar series. Our panel, including Shareholder Michael Dougherty and Attorneys Scott Best and Andrew Condiles, demystified Regulation F and its requirements. They also provide actionable guidance to help creditors minimize risk and maintain compliance.
In case you want to try the team’s beer recommendation, it was The Great Sports Debate. This tasty amber lager, crafted by Conshohocken Brewing Company, is the ideal beer for spirited conversations and, of course, friendly debates. Best of all, a portion of the proceeds support local pediatric cancer research.
As Scott mentioned, “It’s always great to drink for a cause rather than empty calories.”
Now, let’s dive into Regulation F. Here are the top takeaways and tips shared during the episode. And don’t forget to watch the full episode along with your favorite beer or beverage of choice!
What are Limited Content Messages?
Under Regulation F, a limited content message (LCM) must follow three standards: 1) it is a voicemail; 2) it is for a consumer; and 3) it contains the required content.
You might be wondering what constitutes as “required content.” The message needs to contain:
- Your business’ name (the name should not indicate that the caller is in the business of collecting debts);
- A request that the consumer reply to the message;
- The name or names of one or more natural persons whom the consumer can contact to reply to the debt collector; and
- A telephone number or numbers that can be called to reply to the debt collector.
In addition to the required content, there are optional components of a LCM. These components include a salutation, date and time of the message, suggested dates and times for a return call, and a statement that the return call can be answered by someone other than the named person.
Here’s an example of a compliant LCM: “Hello, this message is for Michael. Please give me a call back at 555-123-4567. You can ask for Andrew or Scott.”
By carefully crafting the LCM, you can leave messages that encourage callbacks without inadvertently disclosing that you are attempting to collect on a debt. With that said, it’s important to consult with legal counsel to ensure your state does not have additional requirements for a LCM.
How often can you contact debtors related to collections?
Telephone call frequency is another commonly asked question. There are restrictions designed to prevent harassment, abuse, or undue pressure. The centerpiece of Regulation F’s call frequency restrictions is the “7-in-7” rule. Under this rule, there are two key requirements:
- A debt collector may not call a person more than seven times within seven consecutive days about a particular debt.
- After having a telephone conversation with your debtor, the collector must not call again within seven days of that conversation (about that debt).
These restrictions apply to each individual debt. If a consumer owes multiple debts, the call frequency limits apply to each debt separately.
Are there exceptions to the 7-in-7 rule?
Yes, there are certain types of calls that do not count toward the 7-in-7 rule. These include:
- Calls that do not connect (e.g., no ring, no answer, busy signal or number is not in service)
- Calls in which the collector leaves only a LCM
- Business-related text messages or emails (though other requirements may apply depending on your state’s regulations)
- Calls made with the consumer’s prior consent to exceed the frequency limit
It is essential to maintain proper documentation and call logs to ensure no questions or concerns arise about your business’ compliance with Regulation F.
What steps should creditors take to comply with Regulation F?
To ensure compliance with Regulation F, creditors should implement the following best practices:
- Train your staff: Ensure that all employees and third-party collections agencies understand the requirements of Regulation F, particularly in crafting the LCMs and understanding call frequency rules.
- Update your phone call and voicemail scripts: Use approved templates for LCMs. We recommend implementing regular reviews of scripts, even by legal counsel, to ensure they comply with Regulation F rules.
- Monitor and audit call activity: Use call recording and tracking systems to monitor calls. You can also perform regular audits to identify and correct violations.
- Maintain accurate records: Keep track of all consumer communications, including dates and times of calls, to protect your business.
- Coordinate proper procedures with third-party collectors: If outsourcing collections, ensure your vendors have policies and procedures that meet or exceed Regulation F standards.
Have questions or need help with Regulation F compliance? Contact us!
Non-compliance with Regulation F can lead not only to enforcement actions by the CFPB or state regulators but also to lawsuits. Penalties can be significant, both financially and reputationally. It is critical to align your company’s practices with Regulation F to reduce risk and protect customer relationships.
To learn more about Regulation F compliance, you can watch the full What’s on Tap? episode today. If you’d like to connect with one of our panelists with questions on this topic or to learn more about Weltman’s consumer collections solutions, contact Mike, Scott or Andrew at any time.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
