Vol. 78 Tuesday, 

No. 218 November 12, 2013 

Part IV 

Bureau of Consumer Financial Protection 

12 CFR Part 1006 

Debt Collection (Regulation F); Advanced Notice of Proposed Rulemaking 

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67848 Federal Register / Vol. 78, No. 218 / Tuesday, November 12, 2013 / Proposed Rules 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1006 

[Docket No. CFPB–2013–0033] 

RIN 3170–AA41 

Debt Collection (Regulation F) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Advance notice of proposed 

rulemaking. 

SUMMARY: The Consumer Financial 

Protection Bureau (the Bureau) is 

seeking comment, data, and information 

from the public about debt collection 

practices. Debt collection affects a 

significant number of consumers and 

the Bureau is considering proposing 

rules relating to debt collection. 

Therefore, the Bureau is interested in 

learning through responses to this 

advance notice of proposed rulemaking 

(ANPR) about the debt collection 

system, about consumer experiences 

with the debt collection system, and 

about how rules for debt collectors 

might protect consumers without 

imposing unnecessary burdens on 

industry. 

The Fair Debt Collection Practices Act 

(FDCPA) was passed in 1977 and the 

Bureau is the first Federal agency to 

possess the authority to issue 

substantive rules for debt collection 

under this statute. The Bureau may also 

address concerns related to debt 

collection using its authority under the 

Dodd-Frank Act to issue regulations 

concerning unfair, deceptive, and 

abusive acts or practices and to establish 

disclosures to assist consumers in 

understanding the costs, benefits, and 

risks associated with consumer financial 

products and services. 

DATES: Comments on this ANPR must be 

received by February 10, 2014. 

ADDRESSES: You may submit comments, 

identified by Docket No. CFPB–2013– 

0033 or Regulatory Identification 

Number (RIN) 3170–AA41, by any of the 

following methods: 

• Electronic: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail/Hand Delivery: Monica 

Jackson, Office of the Executive 

Secretary, Bureau of Consumer 

Financial Protection, 1700 G Street NW., 

Washington, DC 20552. 

Instructions: All submissions must 

include the agency name and docket 

number or RIN. Please include the 

question number(s) to which your 

comment pertains. In general, all 

comments received will be posted 

without change to http://

www.regulations.gov. In addition, 

comments will be available for public 

inspection and copying at 1700 G Street 

NW., Washington, DC 20552, on official 

business days between the hours of 10 

a.m. and 5 p.m. Eastern Time. You can 

make an appointment to inspect the 

documents by calling (202) 435–7275. 

All comments submitted through the 

formal means described above, 

including attachments and other 

supporting materials, will become part 

of the public record and subject to 

public disclosure. Sensitive personal 

information, such as account numbers 

or Social Security numbers, should not 

be included. Comments will not be 

edited to remove any identifying or 

contact information. 

E-Rulemaking Initiative: The Bureau 

is working with the Cornell 

e-Rulemaking Initiative (CeRI) on a pilot 

project, RegulationRoom 

(www.RegulationRoom.org), that uses 

web technologies and approaches to 

enhance public understanding and 

effective participation. This ANPR on 

debt collection is a focus of the project. 

RegulationRoom is set up to make it 

easier for consumers and others to 

understand what the Bureau is 

considering, to share their information, 

experiences, and concerns, and to 

discuss possible ideas and solutions. 

Note that RegulationRoom is not an 

official United States Government Web 

site. Although comments made on that 

site are not formal comments like those 

submitted through the means identified 

above, the discussion on 

RegulationRoom will be captured 

through a detailed summary, which 

participants will have the chance to 

review and suggest revisions. This 

summary will be filed as a formal 

comment on Regulations.gov. For 

questions about this project, please 

contact Whitney Patross, Counsel, 

Office of Regulations, at (202) 435–7700. 

FOR FURTHER INFORMATION CONTACT: 

Krista Ayoub and Pavneet Singh, Senior 

Counsels; or Kristin McPartland, Lauren 

Weldon, and Evan White, Counsels; 

Bureau of Consumer Financial 

Protection, 1700 G Street NW., 

Washington, DC 20552, at (202) 435– 

7700. 

SUPPLEMENTARY INFORMATION: This 

ANPR seeks data and other information 

to assist the Bureau in developing 

proposed rules for debt collection. Part 

I provides a general overview of debt 

collection, consumer protection 

problems in debt collection, and 

government authority and activities to 

address these problems. 

Parts II and III of the ANPR 

principally focus on the quantity and 

quality of information in the debt 

collection system. Part II solicits 

information on the transfer of 

information and access to information 

upon sale or placement of debts. Part III 

seeks information regarding validation 

notices, disputes, investigations, and 

verification of disputes. 

Parts IV, V, and VI primarily concern 

the conduct of collectors in interacting 

with consumers in trying to recover on 

debts through the collection process. 

Part IV requests information about 

collector communications seeking 

location information about consumers, 

interacting with consumers themselves, 

disclosing debts to third parties, and 

newer technologies. This part includes 

issues concerning sections 804 and 805 

of the FDCPA. Part V asks for 

information about unfair, deceptive, and 

abusive acts and practices, including 

issues concerning sections 806, 807, and 

808 of the FDCPA. Part VI addresses 

issues relating to the collection of debts 

that are beyond the statute of 

limitations. 

Parts VII and VIII predominantly 

address debt collection activities that 

implicate issues relating to State law. 

Part VII requests information about debt 

collection litigation, most of which 

occurs in State courts. Part VIII raises 

questions about exemptions under 

Federal law for State debt collection 

systems under section 817 of the 

FDCPA, as well as for private entities 

that operate bad check diversion 

programs under contracts with State and 

local district attorneys under section 

818 of the FDCPA. 

Finally, Part IX solicits information 

concerning recordkeeping, monitoring, 

and compliance. 

While the Bureau encourages all 

commenters to read and respond to the 

entire ANPR, we provide the outline 

above to assist commenters in 

identifying the sections most relevant to 

their interests and knowledge. The 

Bureau also invites consumers, 

consumer service organizations, 

creditors, collectors, or other interested 

parties to file comments describing the 

practical experiences that they have had 

or observed in the area of consumer debt 

collection, even if it is not apparent to 

which particular question those 

experiences are closely related. In 

particular, Parts III and VII may be of 

most interest to consumers, who may be 

able to offer insight on their experiences 

and expectations with respect to debt 

collection communications and 

interactions with debt collection 

litigation. 

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1ACA International, 2011 Top Collection Markets 

Survey: For Period: Jan.1, 2010–Dec. 31, 2010 at 9 

(2011), available at http://

www.acainternational.org/files.aspx?p=/images/

12980/2011topmarketsurvey-electronic.pdf. 

2U.S. Bureau of Consumer Fin. Prot., Fair Debt 

Collection Practices Act: CFPB Annual Report 2013 

at 9 (Mar. 20, 2013), available at http://

files.consumerfinance.gov/f/201303_cfpb_March_

FDCPA_Report1.pdf (2013 FDCPA Annual Report); 

U.S. Fed. Trade Comm’n, The Structure and 

Practices of the Debt Buying Industry at 11 (Jan. 

2013), available at http://www.ftc.gov/os/2013/01/

debtbuyingreport.pdf (2013 FTC Debt Buyer 

Report). 

3 2013 FDCPA Annual Report at 9. 

4 2013 FDCPA Annual Report at 9. 

5 Kaulkin Ginsberg, Executive Summary: The 

Kaulkin Report: The Future of Receivables 

Management (Kaulkin-Ginsberg Company 7th ed. 

2007), available at http://www.insidearm.com/wpcontent/uploads/The-Kaulkin-Report-7th-EdExecutive-Summary.pdf. 

6Robert Hunt, Fed. Reserve Bank of Pa., 

Understanding the Model: The Life Cycle of a Debt 

at 10 (2013), available at http://www.ftc.gov/bcp/

workshops/lifeofadebt/UnderstandingTheModel.pdf 

(presented at the FTC–CFPB Roundtable). 

7 Id. 

I. Debt Collection and Consumer 

Protection 

A. Consumer Debts 

A debt is commonly understood to be 

an obligation by a consumer to pay its 

owner; these obligations frequently arise 

out of an extension of credit. Consumers 

have many debts in collection and may 

have many different types of debts in 

collection. In 2011, for example, a 

national trade association of collectors 

reported that the most frequent debts on 

which collectors seek to recover from 

others include medical and other 

health-related debts (36%), credit card 

debts (20%), telecom debts (13%), and 

student loan debts (12%).1

Owners of debts include original 

creditors as well as those who buy debts 

from original creditors and from others. 

Some consumers are unable or 

unwilling to pay debts at the time when 

payment is required. Owners of debts 

who are not paid typically deem, for 

various reasons, that the consumer is in 

default after a period of time and 

therefore place the debt in collection. 

Owners either use their own collectors 

to recover in their own names on these 

defaulted debts (first-party debt 

collectors) or they place the debts with 

collection firms or law firms that 

specialize in the collection of defaulted 

debt (third-party debt collectors). 

Collection of consumer debts serves 

an important role in the functioning of 

consumer credit markets by reducing 

the costs that creditors incur through 

their lending activities.2 Collection 

efforts directly recover some amounts 

owed to owners of debts and may 

indirectly support responsible 

borrowing by underscoring the 

obligation of consumers to repay their 

debts and by incenting consumers to do 

so.3 The resulting reductions in 

creditors’ losses, in turn, may allow 

them to provide more credit to 

consumers at lower prices.4 Collection 

activities can also lead to repayment 

plans or debt restructuring that enable 

consumers to gradually make payments 

and resolve their debts. 

While debt collection can benefit 

consumers by reducing the price and 

increasing the availability of credit, in 

the absence of legislation and regulation 

many consumers may be subject to debt 

collection efforts that raise consumer 

protection concerns. Typically, 

competition in markets will incentivize 

firms to provide products and services 

on terms that consumers favor, but this 

competition may not be effective with 

regard to collections practices. Once a 

debt has gone into collection, 

consumers cannot choose their 

collector; the relevant choice for the 

consumer came when deciding from 

which firm to purchase or borrow. If 

firms’ collection practices—or the 

practices of third-party collectors 

employed by the creditors or the buyers 

to whom creditors sell debt—played an 

important role in consumers’ borrowing 

or purchasing decisions, then this 

competition would impose some 

discipline on firms to reduce overly 

aggressive tactics. When consumers 

make borrowing or purchasing 

decisions, however, they may not be 

focused on the risk that they will 

default. As a result, a consumer’s 

decision to obtain credit from a 

particular creditor is unlikely to be 

influenced by the identity of the 

collector that might eventually collect 

on the debt if the consumer defaults. 

Indeed, it is unlikely that the consumer 

and perhaps even the creditor could 

know the identity of the future thirdparty collector. Firms therefore have a 

limited incentive to engage in less 

aggressive tactics if those tactics lead to 

increased recovery of debts. This effect 

may be exacerbated in the case of thirdparty collectors or debt buyers if 

consumers do not associate their 

treatment by the collector or debt buyer 

with the original creditor. 

B. Debt Collection Industry 

Debt collection is currently a multibillion dollar industry composed of 

first-party collectors, third-party 

collectors, debt buyers, collection law 

firms, and a wide variety of related 

service providers. The Bureau 

understands that, over the past few 

decades, the debt collection industry 

has experienced dramatic growth along 

with significant evolution in business 

practices. 

When a consumer defaults on a debt, 

the first efforts to collect on that debt are 

often made by the creditor itself, either 

through in-house collectors or others 

collecting in the name of the creditor. In 

either case, first-party collections are 

largely exempt from the FDCPA. These 

collections presumably constitute a 

significant segment of the debt 

collection market, with one industry 

source estimating revenues to collection 

companies acting in the name of firstparty collectors to have been around $2 

billion in 2007.5

If the creditor or other owner of the 

debt decides not to collect on the debt 

itself, it may engage a third-party debt 

collector to try to recover on the debt in 

the collector’s own name rather than in 

the name of the creditor or other owner 

of the debt. In 2010, there were more 

than 4,000 third-party debt collection 

firms that employed more than 140,000 

people.6 These third-party collection 

firms had reported revenue of $11.7 

billion in 2010.7

An original creditor or subsequent 

debt purchaser may choose to 

‘‘outsource’’ its collections to a third 

party to collect in the third party’s name 

for several reasons. Third-party 

collectors may possess capabilities and 

expertise in collections that the 

creditors’ in-house operations lack. 

Typically, third-party collectors are paid 

on a contingency basis, usually a 

percentage of recoveries. This transfers 

collections expenses from the debt 

owner or creditor to the third party, 

with the result that the debt owner or 

creditor may recover some of what it is 

owed but without assuming risk that its 

in-house collections expense would be 

unproductive. Additionally, using third 

parties may allow debt owners and 

creditors to expand collection capacity 

during down-cycles in the economy 

(when the number of debts in collection 

increases) without having to hire or 

invest in additional systems or higher 

additional collectors on a short-term 

basis. Finally, an original creditor or 

debt owner may determine that a 

customer in default is no longer one 

with whom it is likely to maintain a 

long-term business relationship and 

thus may choose to devote its customer 

service efforts toward paying or 

prospective customers. 

Debt collectors typically contact 

consumers to try to recover on debts, 

but if these efforts are unsuccessful, 

debt owners may decide to file an action 

in court to try to recover the debt. Most 

debt collection litigation is filed in State 

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8 Kaulkin Ginsberg, Executive Summary: The 

Kaulkin Report: The Future of Receivables 

Management (Kaulkin-Ginsberg Company 7th ed. 

2007), available at http://www.insidearm.com/wpcontent/uploads/The-Kaulkin-Report-7th-EdExecutive-Summary.pdf. 9Robert Hunt, Fed. Reserve Bank of Pa., 

Understanding the Model: The Life Cycle of a Debt 

at 10 (2013), available at http://www.ftc.gov/bcp/

workshops/lifeofadebt/UnderstandingTheModel.pdf 

(presented at the FTC–CFPB Roundtable). 10U.S. Fed. Trade Comm’n, Collecting Consumer 

Debts: The Challenges of Change—A Workshop 

Report at iv (2009), available at http://www.ftc.gov/ 

bcp/workshops/debtcollection/dcwr.pdf. 

11U.S. Gov’t Accountability Office, GAO–09–748, 

Fair Debt Collection Practices Act Could Better 

Reflect the Evolving Debt Collection Marketplace 

and Use of Technology (2009), available at http:// 

www.gao.gov/new.items/d09748.pdf. 

12Robert Hunt, Fed. Reserve Bank of Pa., 

Understanding the Model: The Life Cycle of a Debt 

(2013), available at http://www.ftc.gov/bcp/

workshops/lifeofadebt/UnderstandingTheModel.pdf 

(presented at the FTC–CFPB Roundtable). 

13Fair Debt Collection Practices Act, Public Law 

95–109, 91 Stat 874 (FDCPA), 15 U.S.C. 1692(a). 

14FDCPA section 802(b), 15 U.S.C. 1692(b). 

15FDCPA section 802(e), 15 U.S.C. 1692(e). 

and local courts, and, therefore, owners 

of debts often retain law firms and 

attorneys that specialize in debt 

collection and are familiar with these 

courts and State and local requirements 

to act on their behalf. The use of debt 

collection litigation to recover on debts 

has grown to become a critical part of 

the debt collection industry, with 

collection law firms having an estimated 

$2.4 billion in revenues from collections 

in 2011.8

While third-party collection agencies 

have been increasing in size in recent 

years, third-party debt collection 

continues to include a significant 

number of smaller entities.9 Several 

factors account for this level of industry 

fragmentation. First, debt collection has 

historically been subject to low barriers 

to entry; and while debt collection relies 

on an array of data processing and 

communications technologies, the cost 

of investing in these technologies has 

steadily declined. Secondly, some 

collection firms specialize regarding the 

types of debt they collect. For example, 

some firms specialize in the collection 

of student loans, while others may 

specialize in collection of medical debt. 

A third source of industry 

fragmentation may be that many 

businesses that use debt collection 

services, such as utilities and medical 

providers, serve local markets and may 

prefer to rely on collectors who are 

based in, and familiar with, their local 

markets. Utilities and medical 

providers’ collection practices, in 

particular, may be subject to regulation 

at the State or even local level, and thus 

require collectors who are sensitive to 

these requirements. 

A final source of collections industry 

fragmentation may be due to the fact 

that a considerable amount of debt 

collection activity, including direct 

collection from consumers as well as 

debt litigation, is conducted by law 

firms, which similarly operate within 

local and State jurisdictions. 

Additionally, the advent and growth 

of debt buying has been called ‘‘the 

most significant change in the debt 

collection business in the past 

decade.’’ 10 Debt buyers purchase 

defaulted debt from original creditors or 

other owners of debt and thereby take 

title to the debt. They seek to collect on 

purchased debts themselves, place them 

with third-party collectors, or sell them 

to other debt buyers. Credit card debt 

comprises a large majority of the debt 

that debt buyers purchase.11 Although 

over 500 debt buyers are currently 

active, the market is fairly concentrated, 

with about 10 firms purchasing a large 

proportion of the debt that is sold.12

Creditors who sell their uncollected 

debt to debt buyers receive a certain upfront return, with these debts typically 

sold at prices that are a small fraction 

of the face value of the debt they are 

owed. The debt buyer assumes the risk 

that it may recover less than it paid to 

acquire the debt and collect on it 

(including litigation costs, if applicable). 

While all collectors have an incentive 

to minimize their costs and maximize 

their recoveries to increase their profits, 

their strategies and methodologies may 

vary considerably based on a number of 

factors. Types of debts may differ 

widely in amount or in the amount or 

type of information available to 

collectors about them, as discussed 

further below. For example, a majority 

of medical, utility, and 

telecommunications debts in collection 

are for small amounts and may not 

warrant the high cost of seeking to 

locate or contact the consumer; 

consequently some collectors simply 

report these items to consumer reporting 

agencies (CRAs) and wait for the 

consumer to contact the collector after 

discovering the item on a credit report. 

Some types of debts are subject to 

statutory or regulatory requirements that 

may affect how the collector tries to 

recover on them. Privacy protections 

may impact how collectors seek to 

recover on medical debt, for example. 

The availability of administrative wage 

garnishment and tax refund intercepts 

likewise may affect how collectors try to 

recover on Federal student loans. 

For some debts, changes in the 

consumer’s situation may warrant a 

change in the collector’s recovery 

strategy. For example, a consumer that 

was unable to pay a debt due to 

unemployment may find a job. Thus, 

some collectors purchase information 

about consumers from CRAs and other 

third parties to track whether the 

consumers’ circumstances have 

changed, indicating new ability to pay 

past debts they still owe. 

To assist them in developing efficient 

and effective means of collecting on 

debts, collectors may obtain goods and 

services from a wide range of other 

businesses. Skip-tracing companies, for 

instance, provide contact information 

for consumers and may screen accounts 

to determine if consumers have declared 

bankruptcy or have died. Technology 

firms provide auto-dialers and related 

software programs to help debt 

collectors place calls to consumers. 

Print shops prepare and mail validation 

notices and other written 

communications from collectors to 

consumers. Collectors may furnish 

information about their experience with 

the debts about consumers to CRAs and 

these agencies may, in turn, provide 

collectors with consumer reports for use 

in connection with collections. 

C. FDCPA Protection for Consumers 

The Federal and State governments 

historically have sought to protect 

consumers from harmful practices of 

collectors. From 1938 to 1977, the 

Federal government primarily protected 

consumers through Federal Trade 

Commission (FTC or Commission) 

enforcement actions against collectors 

who engaged in unfair or deceptive acts 

and practices in violation of section 5 of 

the FTC Act. Despite such efforts, 

Congress found in 1977 that ‘‘there 

[was] abundant evidence of the use of 

abusive, deceptive, and unfair debt 

collection practices by many debt 

collectors,’’ and that these practices 

‘‘contribute[d] to the number of personal 

bankruptcies, to marital instability, to 

the loss of jobs, and to invasions of 

individual privacy.’’ 13 Congress also 

found that ‘‘existing laws and 

procedures for redressing these injuries 

[were] inadequate to protect 

consumers.’’ 14

In light of these findings, Congress 

enacted the FDCPA. Among other 

things, the FDCPA was enacted to 

‘‘eliminate abusive debt collection 

practices by debt collectors, [and] to 

insure that those debt collectors who 

refrain from using abusive debt 

collection practices are not 

competitively disadvantaged.’’ 15 To 

achieve these purposes, among other 

things, the FDCPA: (1) prohibits debt 

collectors from engaging in abusive, 

deceptive, or unfair practices; (2) 

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16 In 1984, the FTC issued its Credit Practices 

Rule under the FTC Act, which addressed a few 

unfair or deceptive acts or practices that relate to 

consumer credit, but which have application in the 

context of debt collection. Trade Regulation Rule: 

Credit Practices, 49 FR 7740 (Mar. 1, 1984). The 

Board of Governors of the Federal Reserve System 

(Board), the Federal Home Loan Bank Board 

(FHLBB) (predecessor to the former Office of Thrift 

Supervision), and National Credit Union 

Administration (NCUA) followed suit with similar 

rules. Unfair or Deceptive Acts or Practices; Credit 

Practices, 50 FR 16696 (Apr. 29, 1985) (Board); 

Consumer Protections; Unfair or Deceptive Credit 

Practices, 50 FR 19325 (May 8, 1985) (FHLBB); 

Federal Credit Union; Prohibited Lending Practices, 

52 FR 35060 (Sept. 17, 1987) (NCUA). 

17 In 2010, for example, the FTC received 141,285 

total complaints about collectors, representing 27 

percent of all complaints received by the FTC. U.S. 

Bureau of Consumer Fin. Prot., Fair Debt Collection 

Practices Act: CFPB Annual Report 2012 at 6 

(2012), available at http://

files.consumerfinance.gov/f/201203_cfpb_FDCPA_

annual_report.pdf. In 2011, the FTC received 

142,743 total complaints about collectors, 

representing 27 percent of all complaints. Id. In 

2012, the FTC received 125,136 total complaints 

about collectors, representing 24 percent of all 

complaints received by the FTC. U.S. Bureau of 

Consumer Fin. Prot., Fair Debt Collection Practices 

Act: CFPB Annual Report 2013 at 14 (2013), 

available at http://files.consumerfinance.gov/f/

201303_cfpb_March_FDCPA_Report1.pdf. 

18 2013 FDCPA Annual Report at 7–9. 

19Blog Post, J. Gordon, FDCPA and Other 

Consumer Lawsuit Statistics, Full Year 2011 Recap 

(Jan. 12, 2012), available at http://

accountsrecovery.net/profiles/blogs/fdcpa-andother-consumer-lawsuit-statistics-full-year-2011- 

recap. 

20P. Lunsford, FDCPA Lawsuits Filed by 

Consumers Decline 7 Percent in 2012 (Jan. 17, 

2013), available at http://www.insidearm.com/

daily/debt-buying-topics/debt-buying/fdcpalawsuits-filed-by-consumers-decline-7-percent-in2012/. 

21See, e.g., Susan Shin & Claudia Wilner, New 

Econ. Project, The Debt Collection Racket in New 

York (2013), available at http://www.nedap.org/

resources/documents/DebtCollectionRacketNY.pdf; 

Rachel Terp & Lauren Bowne, East Bay Commty. 

Law Ctr., PAST DUE: Why Debt Collection Practices 

and the Debt Buying Industry Need Reform Now 

(2011), available at http://

www.defendyourdollars.org/pdf/Past_Due_Report_

2011.pdf; Rick Jurgens & Robert J. Hobbs, Nat’l 

Consumer Law Ctr., The Debt Machine: How the 

Collection Industry Hounds Consumers and 

Overwhelms Courts (2010), available at http://

www.nclc.org/images/pdf/pr-reports/debtmachine.pdf. 

22Press Release, U.S. Bureau of Consumer Fin. 

Prot., CFPB Orders American Express to Pay $85 

Million Refund to Consumers Harmed by Illegal 

Credit Card Practices (Oct. 1, 2012), available at 

http://www.consumerfinance.gov/newsroom/cfpborders-american-express-to-pay-85-million-refundto-consumers-harmed-by-illegal-credit-cardpractices/. 

23 2013 FDCPA Annual Report at 28. 

24Note that collectors of debts also may be subject 

to licensing, registration, supervision, and other 

oversight under State law. 

25 Defining Larger Participants of the Consumer 

Debt Collection Market, 77 FR 65775 (Oct. 31, 

2012), 12 CFR 1090. 

26Note that the Larger Participant Rule does not 

delineate the scope of the FDCPA, provisions of the 

Dodd-Frank Act related to consumer debt collection 

activities, or any other Federal consumer financial 

law. Activities that the Bureau chose to exclude 

from the defined consumer debt collection market 

in the Larger Participant Rule may nonetheless 

qualify as ‘‘collecting debt’’ within the meaning of 

the Dodd-Frank Act and may constitute consumer 

financial products or services. 

27U.S. Bureau of Consumer Fin. Prot., CFPB 

Bulletin 2013–07, Prohibition of Unfair, Deceptive, 

or Abusive Acts or Practices in the Collection of 

Consumer Debts (July 10, 2013), available at 

http://files.consumerfinance.gov/f/201307_cfpb_

bulletin_unfair-deceptive-abusive-practices.pdf. 

28U.S. Bureau of Consumer Fin. Prot., CFPB 

Bulletin 2013–08, Representations Regarding Effect 

of Debt Payments on Credit Reports and Scores 

(July 10, 2013), available at http://

files.consumerfinance.gov/f/201307_cfpb_bulletin_

collections-consumer-credit.pdf. 

imposes restrictions on debt collectors’ 

communications with consumers and 

on their communications with others; 

and (3) mandates a debt dispute process 

that includes certain protections for 

consumers and obligations for 

collectors. 

The FDCPA, however, does not apply 

to all collectors of debts. The statute 

generally covers the collection activities 

of third-party collectors for debts in 

default at the time they are obtained. In 

addition, a creditor can be treated as a 

debt collector under the FDCPA with 

respect to debts that were in default 

when it obtained them, or when a 

creditor collects under names other than 

its own. 

D. Continued Consumer Problems and 

Government Responses 

Despite the enactment and 

enforcement of the FDCPA and other 

measures,16 significant consumer 

protection problems related to debt 

collection have persisted. For many 

years, consumers have submitted more 

complaints to the FTC about debt 

collectors than any other single 

industry.17 The Bureau began accepting 

debt collection complaints on July 10, 

2013. As of November 1, 2013, the 

Bureau is receiving comparable levels of 

debt collection and mortgage complaints 

in terms of daily complaint volume, 

with each accounting for approximately 

thirty percent of daily volume. 

Consumer complaints relate to a wide 

variety of debt collection acts and 

practices. Consumers most commonly 

complain to the FTC that collectors 

harass them, demand amounts that 

consumers do not owe, threaten dire 

consequences for non-payment, or fail 

to send required notices.18

Not only do consumers complain 

about debt collectors, but they also file 

thousands of private actions each year 

against debt collectors that allegedly 

have violated the FDCPA. The number 

of these actions filed in Federal district 

court increased from 3,215 in 2005 to 

11,811 in 2011, with increases observed 

each year.19 While the number of these 

actions appeared to level off in 2012,20

the continued number of such actions 

filed each year demonstrates that a 

significant number of consumers allege 

that debt collectors are violating the 

FDCPA. 

Other sources report different but no 

less serious consumer protection 

problems in debt collection. For 

instance, some consumer advocates 

have highlighted issues in debt 

collection litigation, including problems 

with inadequate service of process, 

insufficient evidence accompanying 

complaints, and high rates of default 

judgment.21

In response to these consumer 

protection concerns, Federal and State 

officials have made debt collection a top 

priority. In October 2012, for example, 

the Bureau used its enforcement 

authority under the Dodd-Frank Act to 

bring its first enforcement action 

involving debt collection practices, 

requiring three bank subsidiaries to 

refund an estimated $85 million to 

approximately 250,000 customers for 

several distinct illegal credit card 

practices, including deceptive debt 

collection.22 In 2012, the FTC also 

brought or resolved seven debt 

collection cases, matching the highest 

number of debt collection cases that it 

has brought or resolved in any single 

year.23 States likewise have continued 

their traditional vigorous law 

enforcement activities involving a broad 

range of conduct by debt collectors. 

The Bureau has also become the first 

Federal agency to routinely supervise 

debt collectors.24 In addition to its 

supervisory activities involving certain 

creditors collecting on their own debts, 

in October 2012 the Bureau issued its 

Larger Participant Rule,25 establishing 

supervisory authority over 

approximately 175 debt collectors 

accounting for over 60 percent of the 

industry’s annual receipts.26 On July 10, 

2013, the Bureau held a field hearing in 

Portland, Maine, during which it 

announced guidance in the form of two 

supervisory bulletins, one that 

addresses unfair, deceptive, and abusive 

acts and practices in debt collection 

activities generally 27 and one that 

specifically addresses representations 

regarding credit reports and credit 

scores during the debt collection 

process.28 At the field hearing, the 

Bureau also announced that it was 

accepting debt collection complaints 

and released template letters to assist 

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29See, e.g., U.S. Bureau of Consumer Fin. Prot., 

How Can I Stop Debt Collectors from Contacting 

Me?, available at http://www.consumerfinance.gov/ 

askcfpb/1405/how-can-i-stop-debt-collectorscontacting-me.html (last updated July 12, 2013); 

U.S. Bureau of Consumer Fin. Prot., I’ve Been 

Contacted by a Debt Collector and Need Help 

Responding. How Do I Reply?, available at http:// 

www.consumerfinance.gov/askcfpb/1695/ive-beencontacted-debt-collector-and-need-help-respondinghow-do-i-reply.html (last updated July 10, 2013); 

Blog Post, U.S. Bureau of Consumer Fin. Prot., New 

Ways to Combat Harmful Debt Collection Practices, 

available at http://www.consumerfinance.gov/blog/ 

debtcollection/ (last updated July 10, 2013). 

30U.S. Fed. Trade Comm’n, Collecting Consumer 

Debts: The Challenges of Change—A Workshop 

Report at iv (2009), available at http://www.ftc.gov/ 

bcp/workshops/debtcollection/dcwr.pdf. 

31U.S. Fed. Trade Comm’n, Repairing a Broken 

System (2010), available at http://www.ftc.gov/os/

2010/07/debtcollectionreport.pdf. 

32Additional information about the Workshop is 

available at http://www.ftc.gov/bcp/workshops/

debtcollectiontech. 

33U.S. Fed. Trade Comm’n, The Structure and 

Practices of the Debt Buying Industry (2013), 

available at http://www.ftc.gov/os/2013/01/

debtbuyingreport.pdf. 

34Additional information about the Roundtable is 

available at http://www.ftc.gov/bcp/workshops/

lifeofadebt. 

35 15 U.S.C. 1692l(d). During that time period, the 

FDCPA required the FTC by regulation to exempt 

from the requirements of the FDCPA any class of 

debt collection practices within any State if the FTC 

determined that under the law of that State that 

class of debt collection practices was subject to 

requirements substantially similar to those imposed 

by the FDCPA, and that there was adequate 

provision for enforcement. 15 U.S.C. 1692o. The 

FTC issued its rule on State exemptions in 1979. 

Fair Debt Collection Practices; Procedures for State 

Application for Exemption, 44 FR 21005 (Apr. 9, 

1979) (Interim rule promulgating 16 CFR pt. 901). 

Maine applied for and received such an exemption 

from the FTC, effective March 26, 1996. Exemption 

from Sections 803–812 of the Fair Debt Collection 

Practices Act granted to State of Maine, 60 FR 

66972 (Dec. 27, 1995). 

36Section 814(d) of the FDCPA, 15 U.S.C. 

1692l(d), as amended by section 1089 of the DoddFrank Act. This provision expressly excludes 

certain motor vehicle dealers from the scope of the 

Bureau’s rulemaking authority. Id. See section 1029 

of the Dodd-Frank Act, 12 U.S.C. 5519. The DoddFrank Act also transferred the FTC’s rule writing 

authority with respect to State exemptions to the 

Bureau. See section 817 of the FDCPA, 15 U.S.C. 

1692o, as amended by section 1089 of the DoddFrank Act. The Bureau restated the FTC’s rule in 

2011. Fair Debt Collection Practices Act (Regulation 

F), 76 FR 78121 (Dec. 16, 2011). The FTC rescinded 

its rule in 2012. Rescission of Rules, 77 FR 22200 

(Apr. 13, 2012). 

37Section 1031(b) of the Dodd-Frank Act, 12 

U.S.C. 5531(b). 

38 Id. 

39Section 1032(a) of the Dodd-Frank Act, 12 

U.S.C. 5532(a). 

40Section 1032(c) of the Dodd-Frank Act, 12 

U.S.C. 5532(c). 

41Section 1032(b) of the Dodd-Frank Act, 12 

U.S.C. 5532(d). 

42Section 1032(b) of the Dodd-Frank Act, 12 

U.S.C. 5532(b). 

43Section 1022(b) of the Dodd-Frank Act, 12 

U.S.C. 5512(b). 

44Section 1002(14) of the Dodd-Frank Act, 12 

U.S.C. 5481(14). 

45Section 1031(b) of the Dodd-Frank Act, 12 

U.S.C. 5531(b). 

46Section 1002(6) of the Dodd-Frank Act, 12 

U.S.C. 5481(6). However, a person is not a ‘‘service 

provider’’ solely by virtue of offering or providing 

to a covered person ‘‘(i) a support service of a type 

provided to businesses generally or a similar 

ministerial service; or (ii) time or space for an 

advertisement for a consumer financial product or 

service through print, newspaper, or electronic 

media.’’ Id. 

47 ‘‘Consumer financial product or service’’ under 

the Dodd-Frank Act means any ‘‘financial product 

or service,’’ either offered or provided for use by 

consumers primarily for personal, family, or 

household purposes, or, as applicable, delivered, 

offered, or provided in connection with a consumer 

financial product or service. Section 1002(5) of the 

consumers when corresponding with 

debt collectors.29

Finally, Federal agencies have 

engaged in extensive efforts to identify 

consumer protection problems and 

potential solutions relating to debt 

collection. In 2009, for example, the 

FTC issued a report, ‘‘Collecting 

Consumer Debts: The Challenges of 

Change’’ (2009 FTC Modernization 

Report), which discussed a range of 

critical consumer protection issues 

thirty years after the enactment of the 

FDCPA.30 In 2010, the FTC issued 

another report, ‘‘Repairing a Broken 

System: Protecting Consumers in Debt 

Collection Litigation and Arbitration’’ 

(2010 FTC Litigation and Arbitration 

Report), which identified consumer 

protection issues and possible responses 

related to debt collection litigation and 

arbitration.31 In 2011, the FTC held a 

workshop to consider the impact of 

technological advances on the debt 

collection system, during which 

participants discussed, among other 

things, the ways in which changing 

technology affects debt collector 

communications.32 In January 2013, the 

FTC issued ‘‘The Structure and 

Practices of the Debt Buying Industry’’ 

(2013 FTC Debt Buyer Report), which 

examined the manner and flow of 

information from creditors and other 

owners of debts to debt buyers, among 

other issues.33 Most recently, in June 

2013, the Bureau and the FTC held a 

joint FTC–CFPB Roundtable (FTC–CFPB 

Roundtable or Roundtable) on data 

integrity and information flows in debt 

collection.34

E. Federal Debt Collection Rulemaking 

1. Rulemaking Authority 

From the FDCPA’s enactment in 1977 

until its amendment by the Dodd-Frank 

Act in 2010, the FDCPA expressly 

prohibited the FTC and any other 

agency with enforcement responsibility 

from issuing implementing rules with 

respect to the collection of debts by debt 

collectors.35 In 2010, the Dodd-Frank 

Act authorized the Bureau to ‘‘prescribe 

rules with respect to the collection of 

debts by debt collectors, as defined in 

[the FDCPA].’’36

In addition to conferring rulemaking 

authority under the FDCPA, the DoddFrank Act empowers the Bureau to issue 

regulations ‘‘identifying as unlawful 

unfair, deceptive, or abusive acts or 

practices in connection with any 

transaction with a consumer for a 

consumer financial product or service, 

or the offering of a consumer financial 

product or service.’’ 37 Such rules ‘‘may 

include requirements for the purpose of 

preventing such acts or practices.’’ 38

Section 1032 of the Dodd-Frank Act 

also grants the Bureau the authority to 

‘‘prescribe rules to ensure that the 

features of any consumer financial 

product or service, both initially and 

over the term of the product or service 

are fully, accurately, and effectively 

disclosed to consumers in a manner that 

permits consumers to understand the 

costs, benefits, and risks associated with 

the product or service in light of the 

facts and circumstances.’’ 39 ‘‘In 

prescribing rules under this section, the 

Bureau shall consider available 

evidence about consumer awareness, 

understanding of, and responses to 

disclosures or communications about 

the risks, costs, and benefits of 

consumer financial products or 

services.’’ 40 The Bureau may include in 

such rules a model form that may be 

used at the option of the covered person 

for provision of the required disclosures 

and provide a safe harbor.41 Such model 

forms must be validated through 

consumer testing.42

Further, the Bureau has the authority 

to ‘‘prescribe rules and issue orders and 

guidance, as may be necessary or 

appropriate to enable the Bureau to 

administer and carry out the purposes 

and objectives of the Federal consumer 

financial laws, and to prevent evasions 

thereof.’’ 43 ‘‘Federal consumer financial 

laws’’ include the FDCPA and other 

statutes enumerated in the Dodd-Frank 

Act, as well as the rules to implement 

these statutes.44

The Bureau can exercise the DoddFrank Act rulemaking authority above 

with regard to any ‘‘covered person or 

service provider.’’ 45 ‘‘Covered person’’ 

is defined as ‘‘(A) any person that 

engages in offering or providing a 

consumer financial product or service; 

and (B) any affiliate of a person 

described in subparagraph (A) if such 

affiliate acts as a service provider to 

such person.’’ 46 ‘‘Covered persons’’ for 

purposes of the Dodd-Frank Act 

includes first-party collectors and thirdparty collectors who are collecting or 

attempting to collect on debts that arise 

out of consumer credit transactions.47

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Dodd-Frank Act, 12 U.S.C. 5481(5). ‘‘Financial 

product or service’’ includes ‘‘extending credit and 

servicing loans, including acquiring, purchasing, 

selling, brokering, or other extension of credit (other 

than solely extending commercial credit to a person 

who originates consumer credit transactions).’’ 

Section 1002(15)(A)(i) of the Dodd-Frank Act, 12 

U.S.C. 5481(15)(A)(i); see Section 1002(7) of the 

Dodd-Frank Act, 12 U.S.C. 5481 (defining ‘‘credit’’ 

as ‘‘the right granted by a person to a consumer to 

defer payment of a debt, incur debt and defer its 

payment, or purchase property or services and defer 

payment for such purchase.)’’ ‘‘Financial product or 

service’’ also includes ‘‘collecting debt related to 

any consumer financial product or service.’’ Section 

1002(15)(A)(x) of the Dodd-Frank Act, 12 U.S.C. 

5481(15)(A)(x). 

48Section 1002(6) of the Dodd-Frank Act, 12 

U.S.C. 5481(26). 49These factors include the total assets of the 

class of covered persons, the volume of transactions 

involving consumer financial products or services 

in which the class of covered persons engages, and 

existing provisions of law which are applicable to 

the consumer financial product or service and the 

extent to which such provisions provide consumers 

with adequate protections. Section 1022(b)(3)(B) of 

the Dodd-Frank Act, 12 U.S.C. 5512(b)(3)(B). 

50Section 1022(b)(3)(B) of the Dodd-Frank Act, 12 

U.S.C. 5512(b)(3). 

51As early as two years after the FDCPA’s 

enactment, the FTC submitted a report to Congress 

finding that ‘‘there is little difference between the 

practices employed by certain creditors and those 

employed by debt collection firms. Indeed, there 

evidence that the collection practices of creditors 

may be more egregious than those practices engaged 

in by debt collection firms.’’ U.S. Fed. Trade 

Comm’n, 1979 FDCPA Annual Report at 7 (1979). 

The FTC therefore ‘‘urge[d] the Congress to 

reconsider its decision to exempt creditors from the 

provisions of the Fair Debt Collection Practices 

Act.’’ Id. 

52 In 2012, the FTC received 22,353 complaints 

about first-party collectors, representing 4.3 percent 

of all complaints received. In 2011, the FTC 

received 25,506 complaints about first-party 

collectors, representing 4.9 percent of all 

complaints received. In 2010, the FTC received 

31,952 complaints first-party collectors, 

representing 6.2 percent of all complaints received. 

U.S. Bureau of Consumer Fin. Prot., Fair Debt 

Collection Practices Act: CFPB Annual Report 2013 

at 14 (2013), available at http://

files.consumerfinance.gov/f/201303_cfpb_March_

FDCPA_Report1.pdf; U.S. Bureau of Consumer Fin. 

Prot., Fair Debt Collection Practices Act: CFPB 

Annual Report 2012 at 7 (2012), 

available at http://files.consumerfinance.gov/f/

201203_cfpb_FDCPA_annual_report.pdf. 

53See http://www.consumerfinance.gov/

newsroom/cfpb-orders-american-express-to-pay-85- 

million-refund-to-consumers-harmed-by-illegalcredit-card-practices/. 

54See U.S. Bureau of Consumer Fin. Prot., CFPB 

Bulletin 2013–07, Prohibition of Unfair, Deceptive, 

or Abusive Acts or Practices in the Collection of 

Consumer Debts (July 10, 2013), available at 

http://files.consumerfinance.gov/f/201307_cfpb_

bulletin_unfair-deceptive-abusive-practices.pdf. See 

also U.S. Bureau of Consumer Fin. Prot., CFPB 

Bulletin 2013–08, Representations Regarding Effect 

of Debt Payments on Credit Reports and Scores 

(July 10, 2013), available at http://

files.consumerfinance.gov/f/201307_cfpb_bulletin_

collections-consumer-credit.pdf. 

55See, e.g., Cal. Civ. Code §§ 1788—1788.33, 

1812.700—1812.072; Colo. Rev. Stat. §§ 5–1–101— 

5–12–105, 12–14–101—12–14–137; Conn. Gen. Stat. 

§ 36a–647; Fla. Stat. §§ 559.55—559.785; Haw. Rev. 

Stat. §§ 443B–1, 480D—480D–5; Kan. Stat. Ann. 

§ 16a–5–107; N.Y. Gen. Bus. Law §§ 600—604b; 

Okla. Stat. § 14A, 5–107; Tex. Fin. Code Ann. 

§§ 392.001—392.404, 396.001—393.353; Vt. Stat. 

Ann. tit. 9, § 2451a—2461; Wis. Stat. Ann. 

§ 427.101—427.105. 

56Section 803(2) of the FDCPA, 15 U.S.C. 

1692a(2). 

57Section 803(4) of the FDCPA, 15 U.S.C. 

1692a(4). 

58Section 803(5) of the FDCPA, 15 U.S.C. 

1692a(5). 

‘‘Service provider’’ is generally defined 

as ‘‘any person that provides a material 

service to a covered person in 

connection with the offering or 

provision by such covered person of a 

consumer financial product or 

service.’’ 48

In addition, the Bureau has the 

authority to, after considering 

enumerated factors,49 ‘‘conditionally or 

unconditionally exempt any class of 

covered persons, service providers, or 

consumer financial products or services 

from any provision of this title, or from 

any rule issued under this title, as the 

Bureau determines necessary or 

appropriate to carry out the purposes 

and objectives of this title [title X of the 

Dodd-Frank Act].’’ 50

2. Federal Debt Collection Rulemaking 

Proceeding 

The Bureau is issuing this ANPR to 

request information on a wide range of 

debt collection practices and issues and 

to explore potential debt collection 

rulemaking proceedings and other 

actions that the Bureau could take to 

improve the systematic performance of 

the debt collection market. The Bureau 

believes this information will be useful 

for several reasons. First, significant 

consumer protection problems relating 

to debt collection appear to persist 

despite various vigorous government 

enforcement, supervision, policy 

development, and educational efforts. 

While the Bureau is active in these 

efforts, the Bureau believes it is 

appropriate to explore ways in which 

the new rulemaking authorities afforded 

by the Dodd-Frank Act could be used to 

address some of the longstanding 

problems discussed above. 

Second, there have been technological 

developments, such as email and text 

messaging, since the enactment of the 

FDCPA. These new communication 

tools have created uncertainty as to the 

applicability of the FDCPA in various 

contexts. Rulemaking permits the 

Bureau to consider these technological 

issues in a comprehensive and careful 

manner, fostering the considered 

development of standards that provide 

adequate protection for consumers 

while reducing uncertainty for 

collectors. 

Third, the Bureau believes it is 

important to examine whether rules 

covering the conduct of creditors 

collecting in their own names on their 

own debts that arise out of consumer 

credit transactions are warranted. As 

discussed above, Congress excluded 

such creditors from the FDCPA in 1977, 

but it gave the Bureau authority under 

the Dodd-Frank Act in 2010 to prescribe 

rules applicable to creditors. Congress 

excluded such creditors in 1977 because 

it concluded that the risk of reputational 

harm would be sufficient to deter 

creditors from engaging in harmful debt 

collection practices.51 However, 

experience since passage of the FDCPA 

suggests that first-party collections are 

in fact a significant concern in their own 

right. For instance, the FTC receives 

tens of thousands of debt collection 

complaints each year concerning 

creditors.52 The Bureau likewise has 

brought a debt collection enforcement 

action against a creditor,53 and it 

recently issued a supervisory bulletin 

emphasizing that collectors, including 

creditors, need to ensure that they are 

not engaging in unfair, deceptive, or 

abusive, acts and practices in violation 

of the Dodd-Frank Act.54 Moreover, 

many States have enacted consumer 

protection statutes that apply to the 

collection activities of creditors,55 with 

some of these statutes enacted after 

Congress excluded creditors in the 

FDCPA. In addition to seeking input on 

whether any proposed rules should 

cover creditors, the Bureau seeks input 

on the basic premise that it should 

generally seek to harmonize any rules it 

develops for third-party collectors and 

first-party collectors, except to the 

extent that the law, facts, or policy 

considerations warrant different 

treatment. 

3. Scope of Proceeding 

In this ANPR, the Bureau seeks 

information to help it determine what 

rules and other Bureau actions, if any, 

would be useful under the FDCPA and 

the Dodd-Frank Act. The Bureau has not 

yet decided the precise scope and 

nature of rulemaking(s) it may conduct 

concerning debt collection. Specifically, 

the Bureau seeks to learn more about 

regulations that would best complement 

other governmental activities in 

protecting consumers from problems in 

debt collection. The Bureau’s objective 

would be to protect consumers, yet not 

impose undue or unnecessary burdens 

on the industry. 

The Bureau is also interested in 

receiving information bearing on how 

proposed rules should define and use 

relevant terms. The FDCPA defines 

terms such as ‘‘communication,’’ 56

‘‘creditor,’’ 57 ‘‘debt,’’ 58 and ‘‘debt 

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59Section 803(6) of the FDCPA, 15 U.S.C. 

1692a(6). 

60Section 803(6) of the FDCPA, 15 U.S.C. 

1692a(6). 

61Section 803(6)(F)(iii) of the FDCPA, 15 U.S.C. 

1692a(6)(F)(iii). 

62Letter from Thomas Kane, Attorney, U.S. Fed. 

Trade Comm’n, to Richard de Mayo, President & 

CEO, TSYS Total Debt Management, Inc. (May 23, 

2002), available at http://www.ftc.gov/os/statutes/

fdcpa/letters/demayo.htm. 

63Section 1002(5) of the Dodd-Frank Act, 12 

U.S.C. 5481(5). 

64Section 1002(7) of the Dodd-Frank Act, 12 

U.S.C. 5481(7). 

65Section 1002(15)(A)(i) of the Dodd-Frank Act, 

12 U.S.C. 5481(15)(A)(i). 

66Section 1002(15)(A)(x) of the Dodd-Frank Act, 

12 U.S.C. 5481(15)(A)(x). 

67Note that in 2009, the FTC said that, because 

‘‘neither consumer advocates nor industry 

representatives [at the FTC’s 2007 debt collection 

workshop] recommended that the FDCPA be 

generally expanded to cover creditors,’’ ‘‘there is no 

basis in the workshop record for the Commission 

to assess the costs and benefits of such an 

expansion of FDCPA coverage, including how such 

an expansion would affect entities like national 

backs that are subject to regulation by other federal 

agencies.’’ 2009 FTC Modernization Report at 2 n.1. 

68 Defining Larger Participants of the Consumer 

Debt Collection Market, 77 FR 65775, 65778 n.28, 

65779 (Oct. 31, 2012) (promulgating 12 CFR pt. 

1090). 

69The Bureau notes that under section 815(a) of 

the FDCPA, it is required to file annual reports with 

the Congress ‘‘concerning the administration of its 

functions under [the FDCPA], including such 

recommendations as the Bureau deems necessary or 

appropriate.’’ 15 U.S.C. 1692m(a). Comments could 

be useful to the Bureau in fulfilling this statutory 

requirement. 

70For example, debt collectors seeking to 

maximize profits may not acquire sufficient 

information about the amount of debts. Owners of 

debts might be able to create or compile additional 

information that would allow debt collectors to 

accurately calculate the outstanding balance on 

debts in all, or virtually all, circumstances. 

Collectors nevertheless may not acquire this 

information for various reasons. Collectors often 

may accept payments for debts that are 

substantially less than the outstanding balance, so 

it may not benefit collectors substantially to have 

additional information that allows them to 

determine the precise amount of the balance of 

debts. Even if collectors would benefit from 

additional information that permits them to 

calculate the outstanding balance more accurately, 

the cost to the collector of acquiring this additional 

information may still exceed its benefit to the 

collector, while if the benefits to consumers were 

considered the overall value of the information may 

exceed the cost. 

71 2009 FTC Modernization Report at 21–24. 

collector.’’ 59 The FDCPA also uses 

terms such as ‘‘regularly collects or 

attempts to collect’’ 60 and ‘‘in 

default.’’ 61 For example, one influential 

FTC staff opinion letter addressed when 

an account goes into ‘‘default’’ and 

when a collection agency’s employees 

become the creditor’s de facto 

employees.62 Many court decisions and 

agency documents interpret the 

FDCPA’s terms to establish important 

parameters for the FDCPA. Likewise, the 

Dodd-Frank Act defines terms such as 

‘‘consumer financial product or 

service’’ 63 and ‘‘credit’’ 64 and uses 

terms such as ‘‘extending credit and 

servicing loans’’ 65 and ‘‘collecting debt 

related to any consumer financial 

product or service.’’ 66

The way in which proposed rules 

might define ‘‘collectors’’ would be 

critical to determining the scope of the 

proposed rules. The Bureau is especially 

interested in information bearing on 

whether a rule under the Dodd-Frank 

Act would be useful to protect 

consumers from the conduct of creditors 

collecting in their own names on debts 

arising out of consumer credit 

transactions.67 In particular, the Bureau 

seeks comment on whether proposed 

rules should exclude certain types of 

debts or subject them to different 

requirements. Some debt collection that 

is subject to the FDCPA may not be 

subject to the Dodd-Frank Act’s 

prohibition against unfair, deceptive, or 

abusive acts or practices and thus could 

be addressed in a proposed FDCPA rule 

but not a proposed Dodd-Frank Act rule. 

For example, in its Larger Participant 

Rule, the Bureau noted that some 

medical debt (i.e., that which did not 

arise from an extension of credit within 

the meaning of the Dodd-Frank Act), 

might not involve a consumer financial 

product or service.68 Municipal debts 

(e.g., tickets and fines) and some other 

types of debts that may not arise out of 

an extension of credit may raise similar 

issues. The Bureau seeks factual 

information regarding different types of 

debts in collection to help it determine 

which debts involve a consumer 

financial product or service. 

The Bureau acknowledges that there 

are avenues other than rulemaking 

through which to change or clarify the 

standards applicable to the collections 

process. The statutory standards 

governing how collectors must act in 

seeking to recover on debts have 

remained largely unchanged since the 

FDCPA was enacted in 1977. Further, 

certain changes that would be beneficial 

to consumers may be attainable only 

through statutory revisions. Others may 

be best effectuated by issuing guidance. 

The Bureau therefore encourages 

commenters to provide comment on 

where rulemaking provides the 

preferred means of addressing a 

particular issue and where statutory 

changes 69 or guidance would be a better 

approach. Finally, the Bureau seeks 

information about market initiatives or 

other ways in which tools are already 

being implemented to improve the debt 

collection marketplace. 

The Bureau also recognizes that 

industry, academics, or others may have 

already conducted consumer testing or 

other research that is relevant to the 

topics addressed in this proceeding. The 

Bureau invites comment on any 

consumer testing or other research 

concerning consumer understanding or 

disclosures that has been undertaken. 

The Bureau also invites comments on 

any model notices that industry 

organizations, consumer groups, 

academics, or governmental entities 

have developed. Such information 

would augment consumer testing the 

Bureau plans to do in connection with 

validation notices and other required 

disclosures. 

II. Transfer and Accessibility of 

Information Upon Sale and Placement 

of Debts 

This Part addresses transfers of 

information related to debt when debts 

are sold or placed for collection with 

third parties. This Part seeks 

information to assist in the development 

of proposed rules for creditors, debt 

buyers, and third-party collectors to 

create a comprehensive and coherent 

system for information about debts. 

Incentives in the marketplace may not 

be sufficient in some circumstances 70 to 

result in collectors having adequate 

information. A comprehensive and 

coherent system for information about 

debts would make it more likely that 

those who demand that consumers pay 

debts have accurate and complete 

information bearing on claims of 

indebtedness. Having accurate and 

complete information, in turn, would 

facilitate disclosing information to 

consumers through validation notices 

and other methods, as well as assist in 

preventing false or misleading claims as 

to who owes debts and how much is 

owed. 

A. Information Transferred Between 

Debt Owners and Debt Buyers or ThirdParty Collectors 

Debt owners, collectors, consumer 

advocates, and the FTC have all raised 

concerns about the adequacy of 

information transferred with debts when 

debts are placed with a collector or sold 

to a debt buyer. In the 2009 FTC 

Modernization Report, the Commission 

identified problems with the flow of 

information in the debt collection 

system as a significant issue, noting 

repercussions from these problems for 

both debt collectors and consumers.71

The FTC also observed that 

technological innovations over the past 

thirty years have exponentially 

increased the ability of creditors and 

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72 Id. at 17. 

73E.g., Rick Jurgens & Robert J. Hobbs, Nat’l 

Consumer Law Ctr., The Debt Machine: How the 

Collection Industry Hounds Consumers and 

Overwhelms Courts at 22 (2010), available at 

http://www.nclc.org/images/pdf/pr-reports/debtmachine.pdf; Legal Aid Society, et al., Debt 

Deception: How Debt Buyers Abuse the Legal 

System to Prey on Lower-Income New Yorkers at 5 

(2010), available at http://www.nedap.org/

pressroom/documents/DEBT_DECEPTION_FINAL_

WEB.pdf. 

74See, e.g., New York Appleseed, Due Process 

and Consumer Debt: Eliminating Barriers to Justice 

in Consumer Credit Cases at 20, available at 

http://ftc.gov/os/comments/debtcollectroundtable3/

545921-00031.pdf (only 1 percent of complaints 

reviewed ‘‘included any documents relating to 

proof of the underlying agreement’’); Debt 

Deception at 6, 10 (suggesting that 35 percent of 

debt buyer cases were meritless). 

75U.S. Bureau of Consumer Fin. Prot. & U.S. Fed. 

Trade Comm’n, Roundtable on Data Integrity in 

Debt Collection: Life of a Debt at 109 (June 6, 2013) 

(Transcript of 2013 FTC–CFPB Roundtable). 

76 Id. 

77 2013 FTC Debt Buyer Report, at ii. Under the 

FDCPA, debt collectors are required to provide the 

name and address of the original creditor if 

different from the current creditor to any consumer 

who requests such information in writing within 30 

days of receipt of the validation notice. 15 U.S.C. 

1692g(a)(5). 

78 2013 FTC Debt Buyer Report at 34–35. 

However, the FTC further noted that, in its 

experience, debt buyers generally do not include 

these types of information in their validation 

notices. Id. at 36. 

79 Id. at 35–36. 

80 Id. at 39–40. 

81Transcript of 2013 FTC–CFPB Roundtable at 

103, 119, 144, 159, 171, 174, 196. 

82 Id. at 26–37. 

83Office of the Comptroller of the Currency, 

Statement of the Office of the Comptroller of the 

Currency Provided to the Subcommittee on 

Financial Institutions and Consumer Protection 

Senate Committee on Banking, Housing, and Urban 

Affairs, Shining a Light on the Consumer Debt 

Industry at 12 (July 17, 2013), available at http:// 

www.occ.gov/news-issuances/congressionaltestimony/2013/pub-test-2013-116-oral.pdf. 

84 Information about the requirements related to 

disputes under both the FDCPA and FCRA are 

discussed below in Part III.B. 

85Collection at inconvenient places and times is 

discussed below in Part IV.C. 

86Collectors contacting consumers at work is 

discussed below in Part IV.C. 

87Cease communications requests are discussed 

below in Part IV.E. 

88Collector communications with consumers 

represented by counsel is discussed below in Part 

IV.C. 

debt collectors to obtain, store, and 

transfer data about consumers and their 

debts.72

The Bureau believes that improving 

the integrity and flow of information 

within the debt collection system is of 

critical importance. In addition to the 

FTC’s work, consumer groups have also 

raised concerns about the lack of 

information available to debt buyers and 

third-party collectors.73 Consumer 

groups have shed light on the impact 

that the lack of information has on debt 

collection litigation, a topic discussed in 

greater depth in Part VII.74 Concerns 

about the adequacy of information 

available to participants in the system 

served as the impetus for the recent 

FTC–CFPB Roundtable that examined 

the integrity and flow of debt-related 

information throughout the debt 

collection system. 

With respect to the placement of debts 

with third-party collectors, participants 

at the Roundtable stated that the amount 

of information provided by a debt owner 

placing a debt with a collector may vary 

significantly depending on the 

sophistication of the debt owner and the 

collector.75 More sophisticated debt 

owners and collectors typically share 

information through electronic 

interfaces that allow both parties to 

access data maintained or submitted by 

either party.76

With respect to debt sales, the FTC 

noted in its 2013 Debt Buyer Report that 

in addition to the information the 

FDCPA currently requires debt 

collectors to include with the validation 

notices, debt buyers typically receive or 

are aware of the name of the original 

creditor,77 as well as other information 

such as the original creditor’s account 

number, the debtor’s Social Security 

number, the date of last payment, and 

the date of charge-off.78 The 

Commission’s report also examined the 

transfer and availability of debt-related 

documents (sometimes referred to as 

‘‘media’’) when debts are purchased. 

Examples of such documentation might 

include electronic copies of original 

signed agreements, periodic statements, 

or payment receipts. According to the 

report, debt buyers obtain few, if any, 

underlying documents about a debt at 

the time of purchase.79 Debt buyers are 

sometimes able to obtain account 

documentation for the debts they 

purchase, but debt sellers often limit or 

charge for access to those documents.80

In the absence of this information, debt 

buyers may try to collect from the wrong 

consumer or collect the wrong amount. 

In sum, it is widely recognized that 

problems with the flow of information 

in the debt collection system is a 

significant consumer protection 

concern. At the Roundtable, many 

participants expressed support for 

national standards related to what 

information should be transferred with 

a debt.81 However, various participants 

expressed different ideas about what 

specific information should be 

transferred.82 The Bureau is considering 

using its rulemaking authority to 

develop requirements related to the 

transfer of specified information or 

documents as part of the sale of a debt 

or the placement of a debt with a thirdparty collector. 

Q1: What data are available regarding 

the information that is transferred 

during the sale of debt or the placement 

of debt with a third-party collector and 

does the information transferred vary by 

type of debt (e.g., credit card, mortgage, 

student loan, auto loan)? What data are 

available regarding the information that 

third-party debt collectors acquire 

during their collection activities and 

provide to debt owners? 

Q2: Does the cost of a debt that is sold 

vary based on the information provided 

with the debt by the seller? Are there 

certain types of debts that are not sold, 

such as debts a consumer has disputed, 

decedent debt, or other categories of 

debt? 

Q3: The OCC recently released a 

statement of best practices in debt sales 

which recommends that national banks 

monitor debt buyers after sales are 

completed ‘‘to help control and limit 

legal and reputation risk.’’ 83 What 

monitoring or oversight of debt buyers 

do creditors currently undertake or 

should they undertake after debt sales 

are completed or after debts are placed 

with third parties for collection? 

Q4: If debt buyers resell debts, do 

purchasers typically receive or have 

access to the same information as the 

reseller? Do purchasers from resellers 

typically receive or have access to 

information or documentation from the 

reseller or from the original creditor? Do 

conditions or limitations on purchasers 

from resellers obtaining information 

from the resellers or the original 

creditors raise any problems or 

concerns? 

Information Related to FDCPA 

Provisions 

Q5: To what extent do debt owners 

transfer or make available to debt buyers 

or third-party collectors information 

relating to: Disputes 84 (e.g., that a debt 

had been disputed, the nature of the 

dispute, whether the debt had or had 

not been verified, the manner in which 

it was verified, and any information or 

documentation provided by the 

consumer with the dispute); unusual or 

inconvenient places or times 85 for 

communications with the consumer 

(e.g., at the consumer’s place of 

employment); 86 cease communications 

requests; 87 or attorney 

representation 88? What would be the 

benefits and costs of debt buyers and 

third-party collectors obtaining or 

obtaining access to this information 

upon sale or placement of the debt? To 

what extent do third-party debt 

collectors provide this information to 

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89 2009 FTC Modernization Report at 17–18. 

90Transcript of 2013 FTC–CFPB Roundtable at 

103–04, 120–21, 130–31, 135. 

91 2009 FTC Modernization Report at 23. 

92Federal consumer financial laws currently 

require notices to consumers of mortgage transfers. 

Under the Truth in Lending Act’s (TILA’s) 

implementing Regulation Z, a mortgage transfer 

notice must be sent by each covered person. The 

transfer notice must include the date of the transfer, 

contact information for the covered person and an 

agent or party authorized to receive notice of the 

right to rescind or resolve issues concerning the 

consumer’s payments on the loan, and whether 

ownership is or may be recorded in public records 

or has not been recorded in public records. 12 CFR 

1026.39. Further, under the Real Estate Settlement 

Procedures Act’s (RESPA’s) implementing 

Regulation X, a mortgage servicer transfer servicing 

notice must be sent both by the transferor prior to 

the transfer, and by the transferee after the transfer 

(though they can be combined in one notice). That 

servicing transfer notice must include the effective 

date of the transfer, the contact information for both 

servicers, the date on which the transferor will 

cease accepting payments, and other statements of 

the consumer’s rights. 12 CFR 1024.21. The 

Regulation Z and Regulation X notices can be 

combined where applicable. 12 CFR pt. 1026, Supp. 

I, Comment 1026.39(b)(1)–1. 

debt owners? What would be the costs 

and benefits of third-party collectors 

providing this information to debt 

owners? 

Additional Information 

Q6: To what extent do debt owners 

transfer or make available to debt buyers 

or third-party collectors information 

relating to: The consumer’s 

understanding of other languages (if the 

consumer has limited English 

proficiency); the consumer’s status as a 

servicemember; the consumer’s income 

source; or the fact that a consumer is 

deceased? What would be the benefits 

and costs of debt buyers and third-party 

collectors obtaining or obtaining access 

to this information upon sale or 

placement of the debt? To what extent 

do third-party debt collectors provide 

this information to debt owners? What 

would be the costs and benefits of thirdparty collectors providing this 

information to debt owners? 

Q7: Is there other information that has 

not yet been mentioned that should be 

required to be transferred or made 

available with a debt when it is sold or 

placed for collection with a third-party 

collector? What would be the costs and 

benefits of debt buyers and third-party 

collectors obtaining or obtaining access 

to this information upon the sale or 

placement of a debt? 

Documentation (Media) 

Q8: Please describe debt collectors’ 

access rights to documentation such as 

account statements, terms and 

conditions, account applications, 

payment history documents, etc. What 

restrictions are most commonly placed 

on these access rights? Do these 

restrictions prevent or hinder debt 

collectors from accessing 

documentation? 

Q9: Part III.A below solicits comment 

on whether the last periodic statement 

or billing statement provided by the 

original creditor or mortgage servicer 

should be provided to consumers in 

connection with the validation notice. If 

these documents are not required in 

connection with the validation notice, 

what would be the costs and benefits of 

debt buyers and third-party collectors 

obtaining or obtaining access to this 

documentation when the debt is sold or 

placed for collection? 

Q10: Are there other types of 

documents that would be useful for debt 

buyers and third-party collectors in 

their interactions with consumers? What 

types of documentation would it be 

most beneficial to consumers for debt 

buyers to have or have access to? For 

instance, would it be beneficial to 

consumers for debt buyers to have: (1) 

A contract or other statement 

evidencing the original transaction; (2) a 

statement showing all charges and 

credits after the last payment or chargeoff; or (3) a charge-off statement? What 

would be the costs and benefits of debt 

buyers and third-party collectors 

obtaining or obtaining access to each of 

these types of documentation when a 

debt is sold or placed for collection? 

Q11: What privacy and data security 

concerns should the Bureau consider 

when owners of debts provide or debt 

buyers and third-party collectors obtain 

or obtain access to documentation and 

information when a debt is sold or 

placed for collection? 

Technological Advances. In the 2009 

FTC Modernization Report, the 

Commission noted that increases in data 

storage capacity can enable document 

sharing between creditors and collection 

agencies, or between creditors and debt 

buyers.89 A number of commenters at 

the recent FTC–CFPB Roundtable also 

pointed to technological advances as a 

means to better enable creditors, debt 

collectors, and debt buyers to share 

information and documentation.90 At 

the same time, centralizing such 

consumer data raises potential data 

privacy and security risks, as well as the 

costs of transferring documents and 

other information.91

Q12: Would sharing documentation 

and information about debts through a 

centralized repository be useful and cost 

effective for industry participants? If 

repositories are used, what would be the 

costs and benefits of allowing 

consumers access to the documentation 

and information about their debts in the 

repository and of creating unique 

identifiers for each debt to assist in the 

process of tracking information related 

to a debt? What privacy and data 

security concerns would be raised by 

the use of data repositories and by 

permitting consumer and debt collector 

access? Would such concerns be 

mitigated by requiring that repositories 

meet certain privacy and security 

standards or register with the CFPB? 

What measures, if any, should the 

Bureau consider taking in proposed 

rules or otherwise to facilitate the debt 

collection industry’s use of repositories? 

What rights, if any, should consumers 

have to see, dispute, and obtain 

correction of information in such a 

repository? 

B. Information Debt Owner, Debt Buyer, 

or Third-Party Collector Provides to 

Consumer Upon Sale or Placement of 

Debt 

The FDCPA does not currently require 

any notification to consumers at the 

time that a consumer’s debt is sold or 

placed with a third party for collection. 

Instead, consumers often become aware 

that their debts have been sold or placed 

with a third party for collection because 

they receive a communication to collect 

the debt or a written validation notice 

from the debt buyer or third-party 

collector. Consumers may have 

difficulty recognizing a debt or knowing 

whom to pay because a debt may be 

sold and resold multiple times or placed 

for collection multiple times with 

different third-party collectors, with the 

result that a consumer may receive 

communications from several debt 

collectors, possibly naming several debt 

owners, over a period of several years. 

Some commenters have suggested that 

one way to mitigate that confusion 

would be to require notification to the 

consumer when a debt is sold or placed 

for collection. 

Q13: Do debt owners, buyers of debt, 

or third-party collectors currently notify 

consumers upon sale or placement of a 

debt, other than through the statutorilyrequired validation notices or through 

required mortgage transfer notices? 92

Q14: What would be the costs and 

benefits of requiring notification to a 

consumer when a debt has been sold or 

placed with a third party for collection? 

If such a notice were required, what 

additional information should be 

provided to the consumer and what 

would be the costs and benefits of 

providing such additional information? 

Q15: What would be the respective 

costs and benefits of requiring a debt 

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93 15 U.S.C. 1692g(a). 

94S. Rept. 382, 95th Cong. at 4 (1977). 

95 Jacobson v. Healthcare Fin. Services, Inc., 516 

F.3d 85, 95 (2d Cir. 2008) (validation notices ‘‘make 

the rights and obligations of a potentially hapless 

debtor as pellucid as possible’’); see also Wilson v. 

Quadramed Corp., 225 F.3d 350, 354 (3d Cir. 2000); 

Miller v. Payco-Gen. Am. Credits, Inc., 943 F.2d 

482, 484 (4th Cir. 1991); Swanson v. S. Oregon 

Credit Serv., Inc., 869 F.2d 1222, 1225 (9th Cir. 

1988). 

96 15 U.S.C. 1692g(a). 

97 2009 FTC Modernization Report at 29–30. 

98For example, beginning January 10, 2014, 

creditors, assignees, and servicers generally will be 

required under Regulation Z to provide periodic 

statements for most closed-end consumer mortgage 

loans secured by a dwelling. 12 CFR 1026.41; 78 FR 

10902, 11007 (Feb. 14, 2013). The periodic 

statements for these loans must include the 

outstanding principal on the loan. 12 CFR 

1026.41(d)(7)(i); 78 FR 10902, 11007 (Feb. 14, 

2013). 

99For example, for credit card accounts or other 

open-end credit, whether a charge is ‘‘interest’’ or 

a ‘‘fee’’ or ‘‘principal’’ may change over time, 

depending on whether the interest or fee is 

capitalized. For credit card accounts, if interest or 

fees charged in a billing cycle are not paid by the 

end of the billing cycle, these charges typically are 

Continued 

buyer or a debt owner to provide notice 

that a debt has been sold? What would 

be the respective costs and benefits of 

requiring that a third-party collector or 

a debt owner provide notice that a debt 

has been placed with a third party for 

collection? 

III. Validation Notices, Disputes, and 

Verifications (Section 809 of the 

FDCPA) 

This Part seeks information related to 

the validation notices provided to 

consumers and the obligations of debt 

collectors with respect to consumer 

disputes. Part III.A discusses the 

content, form, and delivery of validation 

notices under the FDCPA. Part III.B 

solicits comment on the FDCPA dispute 

process, including the process to submit 

disputes, the requirements of 

investigations, and the processes used to 

verify debts. 

A. Validation Notices 

FDCPA section 809(a) generally 

requires a debt collector, within five 

days of the first communication with a 

consumer in connection with the 

collection of any debt, to provide the 

following information in writing to the 

consumer: 

1. The amount of debt; 

2. The name of the creditor to whom 

the debt is owed; 

3. A statement that unless the 

consumer disputes the validity of the 

debt or any portion of it within 30 days 

after receipt of the notice, the debt will 

be considered to be valid by the debt 

collector; 

4. A statement that if the consumer 

notifies the debt collector in writing 

within the 30-day period that the debt, 

or any portion of it, is disputed, the debt 

collector will obtain verification of the 

debt or a copy of a judgment against the 

consumer and will mail a copy of such 

verification or judgment to the 

consumer; 

5. A statement that upon written 

request within 30 days of the notice, the 

collector will provide the name and 

address of the original creditor, if 

different from the current creditor. 

The above notice is typically referred 

to as the ‘‘validation notice’’ or ‘‘g 

notice’’ (since the notice requirement is 

codified at 15 U.S.C. 1692(g)). Under 

FDCPA section 809(a), a debt collector 

is not required to provide this validation 

notice in writing within five days of the 

first communication with a consumer in 

connection with the collection of any 

debt if (1) the debt collector provided 

the information that is required in the 

validation notice in the initial 

communication to the consumer; or (2) 

the consumer has paid the debt.93

The legislative history of FDCPA 

section 809 indicates that the principal 

purpose for the validation notice and 

related dispute rights was to ‘‘eliminate 

the recurring problem of debt collectors 

dunning the wrong person or attempting 

to collect debts which the consumer has 

already paid.’’ 94 Through FDCPA 

section 809, Congress intended to 

provide consumers with a means of 

addressing such mistakes by requiring 

collectors to provide debtors with some 

basic information about the alleged debt 

and about the consumer’s right to 

dispute it. In addition, validation 

notices educate consumers about their 

FDCPA rights.95

1. Information in Validation Notices 

Related to Recognizing the Debt 

Debt collectors must disclose two 

pieces of information about the specific 

debt in validation notices: (1) The name 

of the creditor to whom the debt is 

owed, and (2) the amount of the debt. 

Concerns have been raised by the FTC 

and consumer groups that this 

information is not sufficient in many 

cases to allow consumers to recognize 

whether the debts being collected are 

their own because consumers may not 

recognize the name of the debt buyer 

that currently owns the debt. In 

addition, the amount of the debt shown 

on the validation notice may not be 

recognizable to consumers because it 

may differ from the amount of debt that 

was disclosed on the last periodic 

statement or billing statement sent by 

the original creditor because original 

creditors, debt collectors, and debt 

buyers sometimes add fees and interest 

to the amount of the debt that appeared 

on the last periodic statement, billing 

statement, or other documentation that 

consumers received. 

a. Current Owner of the Debt 

As discussed above, under FDCPA 

section 809(a), a debt collector must 

disclose in the validation notice the 

name of the current owner of the debt.96

Q16: Where the current owner of the 

debt is not the original creditor, should 

additional information about the current 

owner, such as the current owner’s 

address, telephone number or other 

contact information, be disclosed in the 

validation notice or upon request? 

Would this information be helpful to 

consumers so that they may contact the 

current owner directly about the debt, or 

about the conduct of its third-party 

collector? 

b. Itemization of Total Amount of Debt 

As discussed above, the amount of the 

debt shown on the validation notice 

may not be recognizable to consumers 

because original creditors, debt 

collectors, and debt buyers sometimes 

add fees and interest to the amount of 

the debt that appeared on the last 

periodic statement, billing statement, or 

other documentation that consumers 

received. In its 2009 Modernization 

Report, the FTC recommended that debt 

collectors be required to include in all 

validation notices an itemization of the 

total debt using the following categories: 

(1) Principal; (2) total of all interest; and 

(3) total of all fees and other charges 

added. The FTC concluded that this 

itemization would benefit consumers 

and debt collectors, insofar as 

consumers would be more likely to 

recognize debts they have incurred and 

to identify debts that are not theirs. 

Once they recognize a debt, consumers 

might be more willing to discuss 

payment arrangements. The FTC also 

stated that debt buyers, in particular, 

would benefit from obtaining such an 

itemization of debts they purchase 

because they must distinguish between 

principal and interest to prepare Form 

1099–C’s to comply with section 6050P 

of the Internal Revenue Code.97

For certain types of debts, such as 

closed-end mortgage loans, the amount 

of outstanding principal is disclosed on 

periodic statements for those loans.98

For other types of debts, such as credit 

card debts, consumers may not 

understand the term ‘‘principal’’ and 

how it relates to amounts shown on 

periodic statements or billing statements 

provided by the original creditor.99

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added to the outstanding balance as principal. 

Creditors typically do not label the outstanding 

account balance on periodic statements given for 

credit card accounts or other open-end credit using 

the term ‘‘principal.’’ 

100 2009 FTC Modernization Report at 26. 

101See 12 CFR pt. 1022, App. K for an example 

of a stand-alone document summarizing rights 

under the FCRA. 

The Bureau specifically solicits 

comments on the alternatives discussed 

below for itemizing the total amount of 

debt. The Bureau also solicits comments 

on whether there are other alternatives 

it should consider. For each alternative, 

the Bureau solicits comment on the 

benefits and costs of providing each 

itemization, including the costs for 

creditors and debt collectors in tracking 

or collecting data and in providing this 

itemization on the validation notice. 

The Bureau also solicits comment on: 

(1) The types of debts for which or 

situation in which each alternative 

would be most useful to consumers and 

(2) how should relevant terms for each 

alternative should be defined. 

Alternative 1: (1) Principal; (2) 

interest; and (3) fees and other charges? 

Alternative 2: (1) The amount of debt 

at the date of charge-off or default; (2) 

total of interest added after the date of 

charge-off or default; (3) total of all fees 

or other charges added or credits posted 

after the date of charge-off or default; 

and (4) any payments or credits received 

after the date of charge-off or default. 

Alternative 3: (1) The amount due 

shown on the last periodic statement 

given for the account; (2) any additional 

outstanding balance that became due 

after the closing date of such periodic 

statement; (3) any interest imposed after 

the closing date of such periodic 

statement; (4) any fees or other charges 

imposed after the closing date of such 

periodic statement; and (5) any 

payments or credits received after the 

closing date of such periodic statement. 

Other alternatives. 

Q17: Are there other approaches to 

itemization of the total amount of debt 

on validation notices that the Bureau 

should consider, and if so, for what type 

of debts should this itemization apply? 

For example, the Bureau recognizes that 

the three alternatives described above 

might work best for credit-based debt. 

Are there other approaches that might 

work better for other types of debts? Are 

there advantages to consistency in 

itemization across different types of 

debt or would it be more helpful, for 

consumers and collectors alike, to 

require different itemizations standards 

depending on the type of debt? Or could 

a standard set of information be 

required, with certain augmentation for 

specific types of debt? 

c. Additional Information 

Q18: What additional information 

should be included in the validation 

notice to help consumers recognize 

whether the debts being collected are 

owed by them or respond to collection 

activity? For example, which of the 

following pieces of information would 

be most useful to consumers? 

• The name and address of the 

alleged debtor to whom the notice is 

sent 

• The names and addresses of joint 

borrowers 

• A partial Social Security number of 

the alleged debtor 

• The account number used by the 

original creditor or a truncated version 

of the account number 

• Other identifying information 

• The name of the original creditor (if 

different from current owner) 

• The name of the brand associated 

with the debt, where different from the 

original creditor (e.g., the name of a 

retail partner on a private label or cobranded credit card, or the name of the 

person providing the periodic statement 

for closed-end mortgages) 

• The name of the doctor, medical 

group, or hospital for medical bills 

ancillary to their provision of services 

(e.g., a testing laboratory) 

• Type of debt (e.g., student loan, 

auto loan, etc.) 

• Date and amount of last payment by 

the consumer on the debt 

• Copy of last periodic statement 

To what extent is this information 

available to debt collectors and debt 

buyers and what would be the cost of 

requiring that it be included in the 

validation notice? What privacy 

concerns would be implicated by 

providing any of this information (e.g., 

the name and addresses of joint 

borrowers, partial Social Security 

numbers, and account numbers) and 

how might the Bureau address such 

concerns? 

2. Statements of Consumers’ Rights Set 

Forth in the FDCPA 

Under FDCPA section 809(a), debt 

collectors must disclose in the 

validation notice two statements 

regarding the consumer’s right to 

dispute the debt. Specifically, the 

validation notice must include a 

statement that if the consumer notifies 

the debt collector in writing within the 

30-day period that the debt, or any 

portion of it, is disputed, the debt 

collector will obtain verification of the 

debt or a copy of a judgment against the 

consumer and will mail a copy of such 

verification or judgment to the 

consumer. The validation notice must 

also include a statement that unless the 

consumer disputes the validity of the 

debt or any portion of it within 30 days 

after receipt of the notice, the debt 

collector will consider the debt valid. 

Q19: Are the statements currently 

provided to consumers regarding these 

FDCPA rights understandable to 

consumers? If consumers do not 

understand the statements that 

collectors currently include on 

validation notices as to their FDCPA 

rights, please provide suggested 

language for how these statements 

should be changed to make them easier 

to understand. 

The FDCPA does not require debt 

collectors to notify consumers that: (1) 

Disputing a debt will suspend collection 

until it is verified, and (2) consumers 

can request that collectors cease 

communicating with them. In its 2009 

Modernization Report, the FTC noted 

that few, if any, debt collectors appear 

to voluntarily disclose this information 

to consumers. 100

Q20: Should consumers be informed 

in the validation notice that, if they 

send a timely written dispute or request 

for verification, the debt collector must 

suspend collection efforts until it has 

provided the verification in writing? 

Would any other information be useful 

to consumers in understanding this 

right? Should consumers be informed in 

the validation notice of their right to 

request that debt collectors cease 

communication with them? 

Q21: Are there any other rights 

provided in the FDCPA that should be 

described in the validation notices? For 

example, would it be helpful to 

consumers for the validation notice to 

state that the consumer has the right to 

refer the debt collector to the 

consumer’s attorney, to inform a debt 

collector about inconvenient times to be 

contacted, or to advise the collector that 

the consumer’s employer prohibits the 

consumer from receiving 

communications at work? If so, please 

identify the costs and benefits of 

including each right that should be 

included in the validation notices. 

Q22: What would be the costs and 

benefits of disclosing FDCPA rights in 

the validation notice itself, as opposed 

to the Bureau developing a separate 

‘‘summary of rights’’ document that debt 

collectors would include with 

validation notices? 101

3. Format and Delivery of Validation 

Notices 

a. Format 

FDCPA section 809(a) does not 

impose formatting requirements for 

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102The FTC in its Commentary indicated that an 

illegible notice, however, does not comply with 

FDCPA section 809. FTC Commentary section 

809(a), comment 3. 

103 15 U.S.C. 1692g(b). 

104See U.S. Census Bureau, Language Use, 

available at http://www.census.gov/hhes/socdemo/

language/. 

105For example, LEP consumers speaking 

Chinese, Korean, and Vietnamese, the next three 

largest LEP linguistic populations, number in the 

hundreds of thousands. Id. 

106 15 U.S.C. 7001(c)(1). 

107 15 U.S.C. 7004(b). 

108 15 U.S.C. 1692g(a)(4). 

109 15 U.S.C. 1692g(a)(5). 

validation notices, such as form, 

sequence, location, grouping, 

segregation, or type-size requirements 

for the information in the notice.102 In 

addition, FDCPA section 809(a) does not 

expressly prohibit debt collectors from 

adding language to the written 

validation notice with the mandatory 

disclosures. Nevertheless, FDCPA 

section 809(b) expressly states that 

‘‘[a]ny collection activities and 

communication during the 30-day 

period [to dispute the debt] may not 

overshadow or be inconsistent with the 

disclosure of the consumer’s right to 

dispute the debt or request the name 

and address of the original creditor.’’ 103

Debt collectors typically add language 

to the written validation notice along 

with the mandatory disclosures, such as 

a demand for payment. 

Q23: What additional information do 

debt collectors typically include on or 

with validation notices beyond the 

mandatory disclosures? Do debt 

collectors typically include State law 

disclosures on the validation notices? If 

so, do debt collectors typically use a 

validation notice that contains the State 

law disclosures from multiple States, or 

do debt collectors typically tailor 

validation notices for each State? 

b. Foreign Language Notices 

According to the U.S. Census, 

approximately 34 million Americans 

speak Spanish at home. Of those, 

approximately 10 million speak English 

less than ‘‘well,’’ making it the largest 

linguistic population with limited 

English proficiency (LEP) in the United 

States.104 Many other LEP consumers 

speak languages at home other than 

Spanish, but no other individual 

language is nearly as prevalent.105

Recognizing that only providing forms 

and notices in English may impede 

these populations’ ability to understand 

written material, some financial service 

providers, including debt collectors, 

apparently provide forms and notices in 

languages other than English. For 

example, some providers will convey 

disclosures to a consumer in Spanish if 

the consumer initiated the credit 

application in Spanish. Other providers 

may allow consumers to choose the 

language they would like to use in 

communicating with collectors. 

Q24: How common is it for collectors 

to communicate with consumers or 

provide validation notices in languages 

other than English? 

Q25: If collectors were sometimes 

required to provide validation notices in 

languages other than English, what 

should trigger that obligation? For 

example, should it be triggered by the 

request of the consumer, by information 

from the original creditor indicating that 

the consumer communicated in a 

language other than English, by the 

language used in the original credit 

contract, or by information gathered by 

the collector during the course of its 

dealing with the consumer? What would 

be the costs of requiring validation 

notices in languages other than English 

using each of these triggers? 

c. Method of Delivery of Validation 

Notices 

(1) Electronic Delivery of the Validation 

Notice 

The Electronic Signatures in Global 

and National Commerce Act (E-Sign 

Act) prescribes a procedure by which 

firms may provide to consumers 

electronically disclosures that are 

required to ‘‘be provided or made 

available to a consumer in writing.’’ In 

essence, that statute requires affirmative 

consent from consumers to receiving 

disclosures electronically after they 

demonstrate they can access the 

disclosure electronically and after they 

have been informed of their right to a 

paper copy.106 The statute also gives 

Federal regulatory agencies the ability to 

interpret, within certain limits, the ESign Act with respect to other statutes 

over which they have rulemaking 

authority.107

Q26: Do collectors currently provide 

validation notices to consumers 

electronically? If so, in what 

circumstances, by what electronic 

media (e.g., email), and in what format 

(e.g., PDF, HTML, plain text)? 

Q27: Does the consent regime under 

the E-Sign Act work well for electronic 

delivery of validation notices? If a 

consumer consents to electronic 

disclosures pursuant to the E-Sign Act 

prior to the account being moved to 

collection, are debt collectors currently 

requiring E-Sign consent again when the 

account moves into collection? When 

the account is sold or placed with a new 

collector, is the new collector currently 

requiring a new E-Sign consent? If a 

consumer consents to electronic 

correspondence, what process do debt 

collectors currently require to revoke 

this consent? 

(2) Consumers’ Use of Electronic Means 

To Fulfill Writing Requirements for 

Exercising Rights Described in 

Validation Notice 

To be effective under FDCPA section 

809(a)(4), a consumer’s right to dispute 

the debt must be exercised in writing.108

Likewise, under FDCPA section 

809(a)(5), the collector must provide the 

consumer with the name of the original 

creditor only if the consumer submits a 

written request within 30 days after 

receiving a validation notice.109 Also, 

under FDCPA section 805(c), consumers 

can request in writing that collectors 

cease communicating with them. The 

purpose of requiring that such 

communications be in writing appears 

to be to establish a written record of the 

request. 

Q28: Do debt collectors currently treat 

emails, text messages, or other forms of 

electronic communications as satisfying 

the ‘‘in writing’’ requirement to exercise 

the three rights described above? If so, 

what would be the costs and benefits of 

treating them as satisfying the ‘‘in 

writing’’ requirement? 

(3) Consumer Testing of Validation 

Notices 

Q29: Have industry organizations, 

consumer groups, academics, or 

governmental entities developed model 

validation notices? Have any of these 

entities or individuals developed a 

model summary of rights under the 

FDCPA that is being given to consumers 

to explain their rights, or a model 

summary of rights under State debt 

collection laws? Which of these models, 

if any, should the Bureau consider in 

developing proposed rules? 

Q30: Is there consumer testing or 

other research concerning consumer 

understanding or disclosures relating to 

validation notices that the Bureau 

should consider? If so, please provide 

any data collected or reports 

summarizing such data. 

B. Disputes and Verification 

The adoption of standards for 

transferring information about debts and 

for compiling and presenting clarified 

and enhanced validation notices may 

make it more likely that collectors will 

try to collect the correct amounts from 

the correct consumers. Currently, there 

are many circumstances in which 

consumers deny or question that they 

are the debtor, that they owe the debt, 

or that the amount sought is accurate, as 

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67860 Federal Register / Vol. 78, No. 218 / Tuesday, November 12, 2013 / Proposed Rules 

110 15 U.S.C. 1692g. Although the Bureau is not 

aware of any comprehensive data regarding what 

percentage of debts are disputed, the data available 

indicate that a significant number of consumers 

avail themselves of their FDCPA dispute rights each 

year. In its 2013 Debt Buyer Report, the FTC found 

that consumers disputed 3.2 percent of all accounts 

on which debt buyers attempted to collect 

themselves. The FTC noted that this dispute figure 

likely underestimated the prevalence of information 

problems, but that if it were applied across the 

entire debt buying industry, it would result in about 

one million disputed debts per year. 2013 FTC Debt 

Buyer Report at iv. The total number of disputed 

debts for the entire debt collection industry is likely 

to be substantially higher because it would include 

disputes of debt on which third-party collectors, not 

just debt buyers, seek to recover. 

111 15 U.S.C. 1692g(b). Notably, the FDCPA 

contains other provisions related to consumer 

disputes that are not dependent upon when the 

debt was disputed or whether the dispute was made 

in writing. For example, section 807(8) requires that 

a debt collector communicate that a debt is 

disputed if it shares credit information about that 

debt, and section 810 provides that if a consumer 

owes multiple debts and makes a single payment, 

a debt collector cannot apply the payment to a 

disputed debt. 15 U.S.C. 1692e(8), 1692h. In 

addition to obligations under the FDCPA related to 

disputes, debt collectors that furnish information on 

debts to CRAs are also subject to dispute obligations 

under the FCRA, which imposes different 

requirements than the FDCPA. 

112 2009 FTC Modernization Report, at v. 

113 Id. Recent FTC consent orders have also 

addressed the issue of how collectors subject to 

such orders must investigate debt disputes in the 

future. For example, the FTC’s recent Expert Global 

Solutions consent order defines how the debt 

collector defendant must conduct each 

investigation, and includes consideration of specific 

information from the original creditor, the alleged 

debtor, third parties such as skip tracers, and from 

its own systems. Stipulated Order at 5–6, United 

States v. Expert Global Solutions, Inc., No. 

3–13CV2611–M (N.D. Tex. Jul. 16, 2013), available 

at http://www.ftc.gov/os/caselist/1023201/

130709ncoorder.pdf. The Asset Acceptance consent 

order also stipulates certain requirements for 

completing an investigation, such as considering 

whether ‘‘other accounts in a particular portfolio 

have been disputed by consumers for similar 

reasons at disproportionately high rates’’ or whether 

‘‘a disproportionately high number of accounts in 

a particular portfolio have been supplemented by 

data from third-party sources.’’ Consent Decree at 

9, United States v. Asset Acceptance, LLC, No. 

8:12–CV–182–T–27EAJ (M.D. Fla. Jan. 30, 2012), 

available at http://www.ftc.gov/os/caselist/

0523133/120131assetconsent.pdf. 

114Transcript of the 2013 FTC–CFPB Roundtable 

at 189, 191, 204. 115 12 CFR 1022.43(d). 

evidenced by the significant volume of 

these complaints to the FTC and the 

Bureau. 

Under the FDCPA, consumers have 

the right to dispute and receive 

verification of the debts that collectors 

attempt to collect and many consumers 

exercise this right.110 Section 809(b) of 

the FDCPA provides that if a consumer 

disputes a debt in writing within 30 

days of receiving the validation notice, 

a debt collector must stop collection of 

the debt until the collector obtains 

verification of the debt or a copy of a 

judgment against the consumer and 

mails it to the consumer.111 The FDCPA 

does not elaborate on the standards for 

investigating a dispute, nor does it 

expressly define what constitutes 

‘‘verification of the debt.’’ 

The Bureau is interested in 

information bearing on the adequacy of 

current practices to investigate 

collection disputes and verify the debt 

under the FDCPA. According to the 

2009 FTC Modernization Report, ‘‘many 

collectors currently do little more to 

verify debts than confirm that their 

information accurately reflects what 

they received from the creditor,’’ which 

is unlikely to reveal whether collectors 

are trying to collect from the wrong 

consumer, collect the wrong amount, or 

otherwise misrepresent the debt.112 The 

FTC further noted that to verify a debt, 

some debt collectors only provide 

consumers with a written statement that 

the amount being demanded is what the 

creditor claims is owed. To address 

these concerns, the FTC recommended 

that if a consumer disputes a debt, the 

debt collector should be required to 

undertake a ‘‘reasonable’’ investigation 

that is responsive to the specific dispute 

raised by the consumer.113 At the recent 

FTC–CFPB Roundtable, a number of 

participants raised similar concerns 

about the limited investigations 

collectors conduct when consumers 

dispute debts.114

1. Definition, Types, and Timing of 

Disputes 

Q31: What types of consumer 

inquiries do debt collectors currently 

treat as ‘‘disputes’’ under the FDCPA? 

What standards do debt collectors 

currently apply in distinguishing 

disputes from other types of consumer 

communications? What data exist to 

indicate the percentage of debts that are 

disputed, and what definition of 

‘‘dispute’’ is being used to arrive at this 

percentage? What data exist to indicate 

how disputes are resolved by debt 

collectors? 

Q32: Are certain types of debts (e.g., 

credit card vs. student) disputed at 

higher rates than others? Do dispute 

rates differ between debts being 

collected by debt buyers versus those 

being collected by third-party 

collectors? 

Q33: What data or other information 

are available regarding how disputed 

debts are resolved? What percentage of 

disputed debts are verified? What 

percentage of debt disputes are never 

investigated? Where disputes are 

investigated, what percentage of the 

investigations reveal that there was an 

error? 

Q34: Should the Bureau define or set 

standards for what communications 

must be treated as ‘‘disputes’’ under the 

FDCPA and, if so, how? What are the 

advantages and disadvantages of the 

definition recommended? 

Dispute Requirements 

Regulation V sets standards for the 

consumer’s direct dispute notice under 

the FCRA. This notice must include: (1) 

Sufficient information to identify the 

account or other relationship that is in 

dispute; (2) the specific information that 

the consumer is disputing and an 

explanation of the basis for the dispute; 

and (3) all supporting documentation or 

other information reasonably required 

by the furnisher to substantiate the basis 

of the dispute.115

Q35: Should consumers be required to 

provide particular information or 

documentation as part of their disputes 

to debt collectors to trigger an 

investigation requirement under the 

FDCPA? What would be the costs and 

benefits of requiring that consumers 

provide the same or similar information 

as required under the FCRA when 

making disputes directly to debt 

collectors? Should a consumer’s 

obligation to provide this information 

about the basis for their disputes be 

contingent on having received a 

validation notice with requisite 

information? Why or why not? 

Types of Disputes. Consumers 

apparently dispute debts for various 

reasons, such as disputing that they are 

the debtor or the amount of the debt. 

With respect to the amount of the debt, 

the consumer also might dispute more 

specific issues relating to the debt owed, 

such as the charges comprising a credit 

card balance, the fees applied after 

default, the application of past 

payments, or the interest calculation. 

Q36: Do consumer disputes typically 

specify what is being disputed, or do 

consumers simply make general 

statements that they dispute the debt? If 

consumers do make specific statements, 

are those statements typically relevant 

to the consumer’s particular 

circumstances or the alleged debt, or do 

they typically appear to be unrelated to 

the consumer’s particular circumstances 

or the alleged debt? What types of 

specific disputes are most commonly 

received by debt collectors (e.g., identity 

theft, wrong amount, do not recognize 

the debt, previously paid, previously 

disputed)? 

Timing. Although a consumer can 

dispute a debt at any time, only a 

written dispute sent within 30 days of 

receipt of the validation notice triggers 

a debt collector’s requirement to stop 

collection activities and provide 

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116Transcript of 2013 FTC–CFPB Roundtable at 

183. 

117 15 U.S.C. 1692g(b). 

118See, e.g., Chaudhry v. Gallerizzo, 174 F.3d 

394, 406 (4th Cir. 1999) (‘‘[V]erification of debt 

involves nothing more than the debt collector 

confirming in writing that the amount being 

demanded is what the creditor is claiming is 

owed. . . . Verification is only intended to 

‘eliminate the problem of debt collectors dunning 

the wrong person or attempting to collect debts 

which the consumer has already paid.’ ’’) 

119 2009 FTC Modernization Report at 33. 

120 Id. at 34. 

121 12 CFR 1022.43. 

122 15 U.S.C. 1681s–2(b). Although section 

623(b)(1)(A) does not specifically state that a 

furnisher must conduct a ‘‘reasonable’’ 

investigation upon learning of a dispute from a 

CRA, courts applying the provision have 

consistently adopted a ‘‘reasonable investigation’’ 

standard. See, e.g., Gorman v. Wolpoff & Abramson, 

LLP, 584 F.3d 1147 (9th Cir. 2009); Westra v. Credit 

Control of Pinellas, 409 F.3d 825, 827 (7th Cir. 

2005); Johnson v. MBNA Am. Bank, NA, 357 F.3d 

426, 431 (4th Cir. 2004); King v. Asset Acceptance, 

LLC, 452 F. Supp. 2d 1272, 1278 (N.D. Ga. 2006). 

123 15 U.S.C. 1681s–2(a)(8)(F)–(G); 12 CFR 

1022.43(b), (f). The FCRA also contains an 

exception from the investigation requirements for 

disputes submitted to CRAs that are deemed 

‘‘frivolous and irrelevant.’’ 15 U.S.C. 1681i(a)(3). 

124 15 U.S.C. 1681s–2(a)(8)(F); 12 CFR 1022.43(f). 

Similarly, when a CRA treats a dispute as ‘‘frivolous 

and irrelevant,’’ the FCRA requires the CRA to 

provide the consumer with a notice of that 

determination. 15 U.S.C. 1681i(a)(3)(B). 

verification of the debt. The FDCPA 

does not impose a time limit for a debt 

collector to respond to a dispute; it only 

requires that the collector must cease 

collection until it provides verification 

of the debt. At the recent FTC–CFPB 

Roundtable, some industry participants 

stated that debt collectors typically 

honor disputes that are received after 

the 30-day time period by stopping 

collection on the account, although it 

was unclear the extent to which those 

disputes are investigated or the debts 

verified.116

Q37: What practices do debt 

collectors follow when they receive a 

dispute after the 30-day period 

following receipt of the validation 

notice has expired? Do collectors 

usually follow the same verification 

procedures as for disputes that are 

received during the 30-day period? 

What would be the potential costs and 

benefits of a debt collector following the 

same investigation and verification 

procedures for disputes received after 

the 30-day period relative to disputes 

received within the 30-day period? 

Q38: How long does it typically take 

after a debt has been disputed for the 

collector to investigate and provide 

verification to the consumer? Would 

establishing a specific time period for 

responding to a dispute be beneficial to 

consumers? Does the prohibition on 

collection until verification has been 

provided give collectors a sufficient 

incentive to investigate expeditiously 

and appropriately? What costs and 

burdens would establishing a specific 

deadline for an investigation impose? 

2. Investigation of Disputed Debts 

Under section 809(b) of the FDCPA, 

after receiving a consumer dispute, a 

debt collector may either cease 

collection efforts without investigation 

or may investigate the dispute with the 

intent of providing verification to the 

consumer.117 The FDCPA does not 

detail how a collector must investigate 

a dispute. Several commenters have 

raised concerns that some debt 

collectors state that they have verified 

the debt to the extent the FDCPA 

requires 118 when, in fact, the collector 

has done little or nothing to investigate 

the disputes and verify the debts. 

The FTC has recommended that debt 

collectors be required to conduct 

‘‘reasonable’’ investigations under the 

FDCPA, noting that such a standard 

would be consistent with the FCRA.119

In the FTC’s view, adopting a 

‘‘reasonable investigation’’ standard 

would decrease consumer concerns 

about mistaken collection attempts, but 

also respond to collection industry 

requests for flexible standards.120

Q39: What steps do collectors take to 

investigate a dispute under the FDCPA? 

Do collectors request information from 

the debt owner or any other parties? Do 

they look beyond confirming that the 

information contained in the validation 

notice is consistent with their records? 

Are the steps debt collectors are taking 

adequate? 

Q40: What steps should debt 

collectors be required to take to 

investigate a dispute? Would a 

‘‘reasonableness’’ standard benefit 

consumers and debt collectors? Would 

more specific standards or guidance be 

useful to help effectuate such a 

standard? For example, should debt 

collectors be required to review 

account-specific documents upon 

receiving the consumer’s dispute? 

Should debt collectors be required to 

consider the accuracy and completeness 

of the information with a portfolio of 

accounts, including whether the 

information is facially inaccurate or 

incomplete? Should debt collectors be 

required to consider the nature and 

frequency of disputes they have 

received about other accounts within 

the same portfolio? 

Q41: How should the investigation 

required vary depending on the type of 

dispute? For example, if a consumer 

states the balance on a debt is incorrect, 

what information should a debt 

collector review for its investigation? If 

a consumer states that she is not the 

alleged debtor, what information should 

a debt collector be required to obtain or 

review? If a consumer disputes the debt 

by stating that she does not recognize it, 

what information should a debt 

collector obtain or review? If the 

consumer claims prior payment of the 

debt, what information should a debt 

collector obtain or review? Please 

comment on other common dispute 

scenarios that may require review of 

specific types of information. 

FCRA Obligations. In addition to their 

obligations under the FDCPA, debt 

collectors who furnish information to 

CRAs are subject to obligations to 

investigate disputes submitted directly 

to them by consumers (‘‘direct 

disputes’’) 121 and submitted to them 

through CRAs.122 The FCRA contains an 

exception from the investigation 

requirement for certain disputes that are 

deemed ‘‘frivolous and irrelevant,’’ an 

exception for which there is no parallel 

in the FDCPA. A debt collector may 

treat a FCRA dispute submitted by a 

consumer directly to the collector as 

‘‘frivolous and irrelevant’’ if the 

consumer does not provide sufficient 

information to investigate the dispute, 

the dispute is substantially the same as 

a previously submitted dispute that has 

already been investigated, or it falls 

within one of several other exceptions, 

including an exception for disputes the 

furnisher reasonably believes are 

submitted or prepared by a credit repair 

organization.123 If the direct dispute is 

treated as frivolous and irrelevant, the 

FCRA and Regulation V require the 

collector to provide the consumer with 

a notice of that determination.124

Q42: What percentage of debt 

collectors are ‘‘furnishers’’ under the 

FCRA? How many FCRA disputes do 

debt collectors receive? What percentage 

of FDCPA disputes do collectors treat as 

direct disputes under the FCRA? How 

do debt collectors fulfill their 

responsibilities to investigate disputes 

that are covered by both the FDCPA and 

the FCRA? To what extent do debt 

collectors stop collecting debts disputed 

pursuant to the FDCPA and the FCRA 

without investigation? To what extent 

do debt collectors stop reporting debts 

disputed pursuant to the FDCPA and 

the FCRA without investigation? 

Q43: What percentage of disputes are 

repeat disputes that were already 

subject to a reasonable investigation and 

do not include any new information 

from consumers? How do debt 

collectors currently handle repeat 

disputes or disputes that are unclear or 

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125See S. Rept. 382, 95th Cong., at 4 (1977); 94 

Cong. Rec. H7789 (1976). 126See 2009 FTC Modernization Report at 31. 127Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th 

Cir. 1999). 128 2009 FTC Modernization Report at 32. 

129 Id. at 32. 

130 Id. at 33. 

131 15 U.S.C. 1681i(b). 

132 15 U.S.C. 1681i(c). 

133 15 U.S.C. 1692g(b). 

134 2013 FTC Debt Buyer Report at 40. 

135 Id. at 40–41. 

136 Id. at 41. 

137Transcript of 2013 FTC–CFPB Roundtable at 

224. 

138 DBA Int’l, DBA Int’l Debt Buyer Certification 

Program, Certification Standards Manual at 8, 

available at http://www.dbainternational.org/

certification/certificationstandards.pdf. 

139FCRA section 615(f), 15 U.S.C. 1681m(f). 

140FCRA section 623(a)(3), 15 U.S.C. 1681s– 

2(a)(3). 

incomplete? Do debt collectors receive a 

significant number of disputes from 

credit repair organizations? Is any data 

available as to the number of repeat 

disputes or disputes from credit repair 

organizations that debt collectors 

receive? 

Q44: Should the Bureau consider 

including in proposed rules for debt 

collection an exception for ‘‘frivolous 

and irrelevant’’ disputes, similar to the 

one found in the FCRA? Are the 

incentives of those collecting on debts 

different from the incentives of other 

furnishers and CRAs with respect to 

information included on consumer 

reports? What would be the costs and 

benefits of allowing collectors not to 

investigate ‘‘frivolous and irrelevant’’ 

disputes? 

3. Verification of Disputed Debts 

Congress intended the dispute and 

verification process in FDCPA section 

809(b) to address the problem of debt 

collectors collecting from the wrong 

person or collecting the wrong 

amount.125 As noted above, the FDCPA 

does not define what constitutes proper 

verification of a debt, and some 

commenters have interpreted court 

decisions as holding that section 809(b) 

does not require debt collectors to 

undertake substantial efforts to verify a 

disputed debt.126 In one case addressing 

this issue, Chaudhry v. Gallerizzo, the 

Fourth Circuit stated that ‘‘verification 

of a debt involves nothing more than the 

debt collector confirming in writing that 

the amount being demanded is what the 

creditor is claiming is owed; the debt 

collector is not required to keep detailed 

files of the alleged debt.’’ 127 Based upon 

this statement, some debt collectors 

believe that verification requires 

nothing more than providing consumers 

with a written statement that the 

amount being demanded is the amount 

the creditor claims is owed.128 However, 

other commenters have pointed out that, 

in the Chaudhry case, the debt collector 

had already verified the amount of the 

debt with the creditor; broken out that 

amount into principal, interest, and 

inspection fees; and forwarded bank 

summaries of consumers’ loan 

transactions that included a description 

of and the date of each transaction. 

In the 2009 FTC Modernization 

Report, the Commission noted that some 

debt collectors currently respond to 

verification requests only by confirming 

in writing that the amount demanded is 

what the creditor claims is owed.129 A 

number of consumer advocates have 

recommended that debt collectors 

should be required to provide 

consumers with verification that is 

responsive to the consumer’s specific 

dispute.130 For example, if a consumer 

raises a claim of identity theft, the debt 

collector should provide verification 

that relates to the consumer’s identity. 

Some debt collection industry 

representatives have stated that any 

requirements to provide more 

substantial verification should be 

flexible enough to account for different 

types and ages of consumer debt. 

Under the FCRA, if a consumer 

continues to dispute information 

appearing in her consumer report with 

a CRA after an investigation is 

completed, the consumer may file a 

brief statement with the CRA setting 

forth the nature of the dispute.131 Under 

the FCRA, a CRA is required to include 

this statement or a clear and accurate 

summary of the statement in any 

subsequent reports about the 

consumer.132

Q45: What information do debt 

collectors currently provide to verify a 

disputed debt? Do debt collectors 

typically provide documentation 

(media) to consumers to verify a debt? 

Q46: Under which circumstances, if 

any, should collectors be required to 

provide consumers with documentation 

(media) to verify a debt? Would 

providing the last periodic or billing 

statement related to the account be 

sufficient to verify most disputed debts? 

Q47: What would be the costs and 

benefits of requiring particular forms of 

information to verify a debt? Are there 

any particular types of verification that 

would be especially beneficial to 

consumers or particularly costly for 

collectors to provide? 

Q48: Section 809(b) of the FDCPA 

states that verifications must be 

‘‘mailed’’ to the consumer.133 Do debt 

collectors currently provide the 

verifications only by postal mail, or are 

debt collectors providing verifications 

in other formats, such as email or text 

message? Do collectors obtain consumer 

consent if they wish to provide the 

verification electronically and, if so, 

what type of consent are they obtaining 

(e.g., do they follow E-Sign standards)? 

Q49: If consumers disagree with the 

verification of disputed debts provided 

by debt collectors, or if they do not 

receive verification of the disputed 

debts, should consumers be afforded the 

opportunity to file statements with 

collectors that explain the nature of 

their disputes with the debt collector, 

and should the debt collector then be 

required to provide that statement to the 

owner of the debt or subsequent 

collectors? What would be the costs and 

benefits of requiring debt collectors to 

accept and communicate consumers’ 

statements of dispute? 

Unverified Debts. The 2013 FTC Debt 

Buyer Report found that debt buyers did 

not verify nearly 50 percent of disputed 

debts.134 The following types of debts 

were less likely to be verified than 

others: medical, telecommunications, 

and utility debts; debts purchased from 

another debt buyer rather than from the 

creditor; and debts more than six years 

old. In comparison, credit card debt, 

debt purchased from the creditor rather 

than from another debt buyer, and debt 

less than three years old were more 

likely to be verified.135 The study also 

found that at least some debt buyers 

sold a small percentage of debt with 

unresolved disputes.136 One participant 

at the recent FTC–CFPB Roundtable 

stated that many creditors and collectors 

refrain from selling or collecting on any 

debts with unresolved disputes.137 The 

Debt Buyers Association has 

commenced a certification program that 

prohibits the sale of disputed debts that 

are unresolved.138 Under the FCRA, 

debt owners are prohibited from selling 

a debt or placing it for collection if a 

CRA notifies the owner that the debt 

resulted from identity theft.139 The 

FCRA also contains a prohibition on 

furnishing information related to an 

account disputed by a consumer 

without noting for the CRA that such 

information is disputed.140

Q50: To what extent do debt 

collectors attempt to verify a debt that 

is disputed? What do debt collectors 

currently do when they are unable to 

verify a disputed debt? What, if 

anything, should debt collectors be 

required to do when they are unable to 

verify a disputed debt? Do third-party 

collectors typically return the account to 

the debt owner when it is disputed, 

without attempting to verify it? 

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141 15 U.S.C. 1692g(b). 

142FTC Staff Commentary on FDCPA section 

809(b), comment 1. At least one State, Colorado, 

prohibits collectors from reporting a debt to a CRA 

during the 30-day validation period. See Colo. Rev. 

Stat. 12–14–108(1)(j). The reasoning behind such a 

statute apparently is that such a prohibition gives 

consumers the opportunity to dispute debts before 

they are reported and appear on their credit reports. 

The Colorado statute provides some exceptions, 

such as when the consumer’s last known address 

is known to be invalid. 

143 15 U.S.C. 1692c(a)(1), (b), (c). 

144 15 U.S.C. 1692b. 

145Section 806(5) of the FDCPA, 15 U.S.C. 

1692d(5). 

146 2013 FDCPA Annual Report at 16–17. 

147Scripps Survey Research Ctr., Ohio Univ., 

Survey: SHOH42 (Sept. 26, 2009), available at 

http://www.newspolls.org/surveys/SHOH42/22540 

(Question: Have you or your family ever received 

multiple calls from a debt collection agency, so 

many that it seemed to you to be harassment? 

Answers: Yes 32%; No 66%; Don’t know 2%). 

148 In 2009, the FTC published a report that 

focused in part on the issues raised by changes in 

debt collection technologies. See 2009 FTC 

Modernization Report. 

Q51: If a debt collector’s investigation 

reveals errors or misrepresentations 

with respect to the debt, do collectors 

report those findings to the consumer? 

When and how are such findings 

conveyed to consumers? 

Q52: Do owners of debts sell disputed 

but unverified debts to debt buyers or 

place them with new third-party 

collectors? Are these debts reported to 

CRAs? What limitations should be 

placed on the sale or re-placement of 

unverified disputed debts? For example, 

should the owner of the debt or the 

collector be required to inform debt 

buyers and new collectors that it is an 

unverified disputed debt when it is sold 

or re-placed? Should the new debt buyer 

or collector be required to verify the 

debt before making collection efforts? 

What would be the potential costs and 

benefits of such restrictions or 

conditions? 

4. Reporting of Un-Validated Debts 

Section 809(b) of the FDCPA provides 

for a 30-day window after the collector 

first contacts the consumer about the 

alleged debt in which the consumer may 

dispute or request verification of the 

debt.141 The FTC’s Staff Commentary 

states that collectors may report a debt 

to a CRA within the 30-day window, as 

long as the consumer has not yet 

disputed the debt.142

Q53: What would be the costs and 

benefits of prohibiting collectors from 

reporting a debt to a CRA during the 30- 

day window? 

IV. Debt Collection Communications 

(Sections 804 and 805 of the FDCPA) 

Many provisions of the FDCPA 

regulate debt collectors’ 

communications with consumers and 

third parties. For example, debt 

collectors are generally prohibited from 

contacting consumers at unusual times 

or places, from disclosing collectionrelated information to third parties, and 

from communicating with consumers 

that have asked the collector to cease 

communications.143 The FDCPA also 

governs communications in which a 

debt collector seeks location 

information about a consumer from a 

third party.144 These provisions focus 

on preventing consumer harm in debt 

collection communications. 

Despite the FDCPA’s protections, 

consumers still consistently report 

abuses focusing on debt collection 

communications. For example, the 

FDCPA prohibits collectors from calling 

consumers ‘‘repeatedly or continuously 

with intent to annoy, abuse, or harass 

any person at the called number.’’ 145

Nevertheless, the most frequent debt 

collection-related complaint in the 

FTC’s Consumer Sentinel database is 

that a collector is calling repeatedly or 

continuously, conduct in which 

collectors may be engaged to annoy, 

abuse, or harass the recipients of these 

calls.146 A 2009 survey conducted by 

Ohio University similarly found that 

approximately one-third of survey 

respondents had received multiple calls 

from a debt collector in a pattern that 

seemed to them to be harassment.147

Other communications-related concerns 

include calling hours, communications 

at the workplace, and inappropriate 

communications with friends and 

family. Consumers also file many 

lawsuits alleging that collectors have 

engaged in communication practices 

that are prohibited by the FDCPA. 

The Bureau seeks comment on how 

rulemaking with respect to 

communications in debt collections 

could help both consumers and the 

industry. Part IV.A discusses recent 

advances in communications 

technologies, including social media, 

and their potential implications for debt 

collection practices. Part IV.B discusses 

communications soliciting location 

information from third parties about 

consumers, including when collectors 

may reinitiate contact with a third party 

and how collectors identify themselves 

in location communications. Part IV.C 

discusses issues regarding 

communications between debt 

collectors and consumers, including the 

times and places that are unusual or 

inconvenient for consumers, and issues 

specific to military servicemembers. 

Part IV.D addresses communications 

between debt collectors and third 

parties, including issues regarding 

decedent debt, caller ID, and recorded 

messages. Finally, Part IV.E discusses 

the right for consumers to cease 

communications from a debt collector, 

including the consumer’s ability to limit 

communications to certain media or 

certain times of day. 

A. Advances in Communications 

Technologies 

The debt collection landscape has 

changed dramatically since the FDCPA 

was enacted in 1977. Perhaps the 

greatest transformations have occurred 

in the technologies that debt collectors 

and debt owners use to communicate 

with consumers. The statute itself 

contemplates communications via 

telephone, postal mail, and telegraph, 

but it does not reflect the advent of the 

internet, smartphones, autodialers, fax 

machines, and social media. These 

newer technologies present new 

challenges and new opportunities.148

The challenges often arise when 

attempting to apply the FDCPA’s 

prohibitions to a technology that was 

not envisioned at the time of its 

enactment and may not easily fit its 

statutory framework. Nonetheless, these 

technologies also create new 

opportunities for consumers, debt 

collectors, and debt owners to 

communicate in ways that may be more 

convenient and less costly than prior 

methods. 

Q54: In addition to telephone and 

mail, what technologies, if any, do debt 

collectors currently use on a regular 

basis to communicate or transact 

business with consumers? For which 

technologies would it be useful for the 

Bureau to clarify the application of the 

FDCPA or laws regarding unfair, 

deceptive, or abusive acts or practices? 

What are the potential efficiencies or 

cost savings to collectors of using 

certain technologies, such as email or 

text messaging? What potential privacy, 

security, or other risks of harm to 

consumers may arise from those 

technologies and how significant are 

those harms? Could regulations prevent 

or mitigate those harms? Should 

consumers also be able to communicate 

with and respond to collectors through 

such technologies, including to exercise 

their rights under the FDCPA and 

particularly when a collector uses the 

same technology for outgoing 

communications to the consumer? What 

would be the potential costs and 

benefits of such regulations? 

Q55: Are there nascent 

communication technologies, or 

communication technologies that are 

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149 15 U.S.C. 1692c(b). 

150 15 U.S.C. 1692b(1), (2). 

151 15 U.S.C. 1692b(3). 

152A recent FTC consent order provided 

standards governing when the debt collector subject 

to the order has a ‘‘reasonable belief’’ that a third 

party’s prior statements are ‘‘erroneous or 

incomplete.’’ That order required that, to establish 

such a belief, the defendant debt collector must 

have: 

(1) Conducted a thorough review of all applicable 

records, documents, and database entries for the 

alleged debtor Defendants are trying to reach to 

search for any notations that indicate that the 

alleged debtor cannot be reached at that telephone 

number or that the person does not have location 

information about the alleged debtor Defendants are 

trying to reach; and (2) obtained and considered 

information or evidence from a new or different 

source other than the information or evidence 

previously relied upon by Defendants in attempting 

to contact the alleged debtor Defendants are trying 

to reach and such information or evidence 

substantiates Defendants’ belief that the person’s 

earlier statements were erroneous or incomplete 

and that such person now has correct or complete 

location information. 

Stipulated Order at 5–6, United States v. Expert 

Global Solutions, Inc., No. 3–13CV2611–M (N.D. 

Tex. July 16, 2013), available at http://www.ftc.gov/ 

os/caselist/1023201/130709ncoorder.pdf. 

153 15 U.S.C. 1692b(5). 

154 15 U.S.C. 1692c(a)(1). 

155Eighty-nine percent of U.S. households now 

own a mobile phone, up from 36% in 1998, while 

71% of households own a landline, down from 96% 

in 1998. Moreover, mobile-only households are on 

the rise among younger households, with about 

two-thirds of households led by people ages 15 to 

29 having only mobile phones. Jeffrey Sparshott, 

More People Say Goodbye to Landlines, Wall St. J., 

Sep. 6, 2013, at A5. 

156 2009 FTC Modernization Report at vi. 

likely to arise in the future, whose use 

in connection with debt collection 

might materially benefit or harm debt 

collectors or consumers? What 

additional challenges do those 

communication technologies present in 

applying the FDCPA or the Dodd-Frank 

Act’s prohibition against unfair, 

deceptive, and abusive acts and 

practices to debt collectors? 

Q56: What complications or 

compliance issues do social media 

present for consumers or collectors in 

the debt collection process? How, if at 

all, should collector communications 

via social media be treated differently 

from other types of communications 

under debt collection rules? What 

privacy concerns are raised by various 

social media platforms? 

Q57: FDCPA section 807(11) declares 

it to be a false, deceptive, or misleading 

representation for collectors to fail to 

disclose that a communication is from a 

debt collector. This section also requires 

in the collector’s initial communication 

what is often called a ‘‘mini-Miranda’’ 

warning, in which the collectors state 

that they are attempting to collect a debt 

and any information obtained will be 

used for that purpose. Standard industry 

practice is for third-party debt collectors 

to provide the mini-Miranda warning 

during every collection call. What are 

the costs and benefits of such collectors 

including the mini-Miranda disclosure 

when they send communications via 

social media? 

B. Communications To Locate Debtors 

(Section 804 of the FDCPA) 

Collectors are generally prohibited 

from communicating with third parties 

regarding the collection of a debt, but 

one exception is location 

communications.149 Location 

communications are permitted under 

FDCPA section 804 and used by 

collectors to obtain or update contact 

information for consumers. That 

section, for instance, requires a debt 

collector making location calls to 

‘‘identify himself, state that he is 

confirming or correcting location 

information concerning the consumer, 

and, only if expressly requested, 

identify his employer’’ but not state that 

the consumer owes any debt.150

Collectors are also limited to one 

location communication with a person 

unless, inter alia, ‘‘the debt collector 

reasonably believes that the earlier 

response of such person is erroneous or 

incomplete and that such person now 

has correct or complete location 

information.’’ 151

Q58: How frequently do debt 

collectors communicate with third 

parties about matters other than the 

location of the consumer? What other 

topics are discussed and for what 

reason? What are the potential risks to 

consumers or third parties? Would 

additional regulation to address this 

issue be useful? 

Q59: What would be the costs and 

benefits of setting a standard for when 

a debt collector’s belief about a third 

party’s erroneous or incomplete location 

information is reasonable? If a standard 

would be useful, what standard would 

be appropriate? 152

Q60: Some individuals employed by 

debt collectors use aliases to identify 

themselves to third parties when 

seeking location information about a 

consumer. Should this practice be 

addressed in a rulemaking? If so, how? 

Q61: Under FDCPA section 804(1), 

debt collectors are permitted to identify 

their employers during location 

communications only if the recipient of 

the communication expressly requests 

that information. Does providing the 

true and full name of the collector’s 

employer upon request risk disclosing 

the fact of the alleged debt to a third 

party? If so, how could the risk be 

minimized? What would be the costs 

and benefits of minimizing or otherwise 

addressing this risk? 

Q62: FDCPA section 804(5) bars a 

debt collector from using any language 

or symbol on an envelope or elsewhere 

in a written communication seeking 

location information if the name 

indicates that the collector is in the debt 

collection business or that the 

communication relates to the collection 

of the debt.153 How should such a 

restriction apply to technologies like 

email, text message, or fax? 

C. Communications With Consumers 

(Section 805(a) of the FDCPA) 

1. Unusual or Inconvenient Times 

a. Traditional Communications 

Technologies (Phones) 

Section 805(a) of the FDCPA sets 

parameters on collector 

communications with consumers, 

including a bar on contacting consumers 

at ‘‘any unusual time or place or a time 

or place known or which should be 

known to be inconvenient to the 

consumer.’’ 154 The statute further 

states, ‘‘In the absence of knowledge to 

the contrary, a collector shall assume 

that a convenient time for 

communicating with a consumer is’’ 

between 8:00 a.m. and 9:00 p.m., local 

time in the consumer’s location. 

The advent of mobile phones 

complicates the determination of what 

times are unusual or inconvenient. 

Mobile phones are increasingly the 

prominent mode of telephone 

communications.155 With landline 

phone numbers, a collector can 

generally determine the consumer’s 

time zone using the area code for the 

number (call forwarding is one 

exception). But consumers may take 

mobile phones anywhere and travel to 

different time zones is not uncommon. 

In addition, many consumers now keep 

their mobile phone number when they 

move, so that the area code for their 

mobile phone does not match the area 

code of their current residence. 

Collectors that use area codes or home 

addresses to determine convenient 

calling hours therefore may 

inadvertently call earlier or later than 

the law permits. In the 2009 FTC 

Modernization Report, the FTC 

recommended that collectors be 

permitted to assume, for the purposes of 

determining appropriate calling hours, 

that the consumer was located in the 

same time zone as her home address.156

Q63: Does sufficiently reliable 

technology exist to allow collectors to 

screen to determine whether a given 

phone number is a landline versus a 

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157See, e.g., S. Rept. 382, 95th Cong., at 2 (1977); 

123 Cong. Rec. S13851, 13854 (daily ed. Aug. 5, 

1977); H. Rept. 5294, 95th Cong., (1977) (prior 

version of the bill specifying that the hours 

restriction applied to telephone calls). 158 15 U.S.C. 1692c(a)(3). 

mobile phone? If so, should collectors 

conduct such screening before relying 

on an area code to determine a 

consumer’s time zone? What would be 

the costs and benefits of requiring such 

screening? Should collectors be allowed 

to rely on information provided by 

consumers at the time they applied for 

credit, such as when a consumer 

provides a phone number identified as 

a ‘‘home’’ number or a ‘‘mobile’’ phone 

number on an initial credit application 

without screening the area code? 

Q64: Should collectors assume that 

the consumer’s mailing address on file 

with the collector indicates the 

consumer’s local time zone? If the local 

time zone for the consumer’s mailing 

address and for the area code of the 

consumer’s landline or mobile 

telephone number conflict, should 

collectors be prohibited from 

communicating during any 

inconvenient hours at any of the 

potential locations, or should one type 

of information (e.g., the home address) 

prevail for determining the consumer’s 

assumed local time zone? 

b. Newer Communications Technologies 

(Email and Text Message) 

The legislative history of the FDCPA 

indicates that the restrictions on 

convenient hours in section 805(a)(1) 

were intended to apply principally, or 

perhaps exclusively, to telephone 

communications rather than postal 

mail.157 Newer technologies like email 

and text messages present challenges in 

applying section 805(a)(1) because the 

technologies themselves are hybrids 

between the textual nature of postal 

mail and the immediate delivery of 

telephone calls (as with faxes). For 

email, recipients arguably do not receive 

their messages until they affirmatively 

check their email account, thus allowing 

consumers to control when they view 

new messages. However, some 

consumers have devices that notify 

them when the email is delivered to 

their email provider, such as a 

smartphone that makes a sound upon 

the delivery of an email. The extent to 

which the receipt of an email occurs at 

an unusual or inconvenient time may 

therefore differ greatly among 

consumers. 

Text messaging presents similar but 

distinct issues. Text messages arrive 

primarily over telephones, whereas 

emails can arrive on any device with an 

internet connection. As with email, a 

consumer may not view a text message 

until long after it was delivered to her 

phone, but many consumers are alerted 

when a text message arrives, often by an 

audio alert. 

Q65: A main purpose of designating 

certain hours in the FDCPA as 

presumptively convenient apparently 

was to prevent the telephone from 

ringing while consumers or their 

families were asleep. Do similar 

concerns exist for other technologies? 

Should any distinction be made 

between the effect of a telephone ringing 

and an audio alert associated with 

another type of message delivery, such 

as email or text message, if a mobile 

phone is on during the night? 

Q66: Should a limitation on usual 

times for communications apply to 

those sent via email, text message, or 

other new media? Should it matter 

whether the consumer initiates contact 

with the collector via that media? Is 

there a means of reliably determining 

when an electronic message is received 

by the consumer? Are there data on how 

frequently consumers receive audio 

alerts when either emails or text 

messages are delivered? Are there data 

showing how many consumers disable 

audio alerts on their devices when they 

wish not to be disturbed? 

Q67: Is there a general principle that 

can guide the incorporation of standards 

on unusual times for communications to 

newer technologies? For instance, 

should such restrictions apply only to 

technologies that have ‘‘disruptive’’ 

effects, like phone calls, and if so, how 

might ‘‘disruptive’’ be best defined? 

What would be the costs and benefits of 

applying any such general principles? 

2. Unusual or Inconvenient Places 

Inconvenient Places. The Bureau 

seeks comment about the types of 

places, if any, that are unusual or that 

collectors know or should know to be 

inconvenient for them to contact 

consumers. 

Q68: Especially with the advent and 

widespread adoption of mobile phones, 

consumers often receive calls at places 

other than at home or at work. Under 

what circumstance do collectors know, 

or should know, that the consumer is at 

one of the types of places listed below? 

What would be the costs and benefits of 

specifying that such locations are 

unusual or inconvenient, assuming the 

debt collector knows or should know 

the location of the consumer at the time 

of the communication? 

• Hospitals, emergency rooms, 

hospices, or other places of treatment of 

serious medical conditions 

• Churches, synagogues, mosques, 

temples, or other places of worship 

• Funeral homes, cemeteries, military 

cemeteries, or other places of burial or 

grieving 

• Courts, prisons, jails, detention 

centers, or other facilities used by the 

criminal justice system 

• Military combat zones or qualified 

hazardous duty postings 

• Daycare centers 

Q69: Are there additional places not 

listed above that would be inconvenient 

places for consumers to be contacted? 

Q70: Under what circumstances are 

communications at a consumer’s place 

of employment inconvenient, even if the 

employer does not prohibit the receipt 

of such communications? What would 

be the potential costs and benefits of 

prohibiting communications at a 

consumer’s place of employment due to 

inconvenience, assuming that the 

collector knows or should know the 

consumer’s location? To what extent 

does the inconvenience depend on the 

nature of the consumer’s workplace or 

on the consumer’s type of employment 

at that workplace? 

Place of employment 

communications. Under FDCPA section 

805(a)(3), a collector may not contact a 

consumer at his place of employment if 

the collector knows or has reason to 

know that his employer prohibits the 

consumer from receiving such 

communication.158

Q71: Do employers typically 

distinguish, in their policies regarding 

employee contacts at work, between 

collection communications and other 

personal communications? Are 

employers’ policies concerning receipt 

of communications usually companywide, specific to certain job types, or 

specific to certain individuals? 

Q72: Collectors may have many 

accounts with consumers employed by 

the same large employer, such as a 

national chain store, and this may 

enable collectors to become familiar 

with the employers’ policies regarding 

receipt of personal or collection 

communications in the workplace. Can 

collectors reliably determine consumers’ 

employers and their policies with regard 

to receiving communications at work? If 

so, what would be the costs and benefits 

of requiring that collectors cease 

communications at work for all 

consumers working for a certain 

employer if collectors are informed by 

one (or more) consumer(s) that the 

employer does not permit personal 

communications for any of its 

employees overall, or at a particular 

location or job type (e.g., retail premises 

employers)? What would be the costs 

and benefits of requiring that collectors 

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159 15 U.S.C. 1692c(a)(2). 

160 15 U.S.C. 1692b(6). 

161 Id. 

162See Part IV.D’s discussion of spouses. 

163 15 U.S.C. 1692c(b). 

164See, e.g., S. Rept. 382, 95th Cong., at 4 (1977) 

(‘‘[T]his legislation strongly protects the consumer’s 

right to privacy by prohibiting a debt collector from 

communicating the consumer’s personal affairs to 

third persons . . . . 

[T]his legislation adopts an extremely important 

protection . . .: it prohibits disclosing the 

consumer’s personal affairs to third persons . . . . 

Such contacts are not legitimate collection practices 

and result in serious invasions of privacy, as well 

as the loss of jobs.’’). 

165 15 U.S.C. 1692a(3). 

166 15 U.S.C. 1692c(d). 

cease communication at work if they 

learn of the employer’s policy through 

other means, such as the policy being 

posted on the employer’s Web site? 

3. Consumers Represented by Attorneys 

The FDCPA provides that ‘‘[w]ithout 

the prior consent of the consumer given 

directly to the debt collector or the 

express permission of a court of 

competent jurisdiction, a debt collector 

may not communicate with a consumer 

in connection with the collection of any 

debt if the debt collector knows the 

consumer is represented by an attorney 

with respect to such debt and has 

knowledge of, or can readily ascertain, 

such attorney’s name and address, 

unless the attorney fails to respond 

within a reasonable period of time to a 

communication from the debt collector 

or unless the attorney consents to direct 

communication with the consumer.’’ 159

Collectors are also prohibited from 

making location communications 

concerning represented consumers 

unless the attorney fails to respond 

within a reasonable period of time to the 

communications from the debt 

collector.160

Q73: The FDCPA’s restriction on 

contacting consumers represented by 

attorneys does not apply if ‘‘the attorney 

fails to respond within a reasonable 

period of time.’’ 161 How do collectors 

typically calculate a ‘‘reasonable period 

of time’’ for this purpose, and does the 

answer vary depending on particular 

circumstances? 

Q74: How common is it for consumers 

to be represented by attorneys on debts? 

When consumers have multiple debts, 

do attorneys usually represent them on 

one debt, all debts, or some number of 

debts less than the total? How often do 

consumers with debts change their 

attorney? 

4. Servicemember Issues 

Credit applications for 

servicemembers may sometimes require 

them to provide contact information for 

their commanding officers. These 

applications may also request or require 

that servicemembers provide some form 

of consent allowing debt owners to 

contact their commanding officers with 

respect to the debt. When a 

servicemember signs such an 

application, some collectors may believe 

that communications to commanding 

officers are not subject to the 

prohibition on communication with 

third-parties under FDCPA section 

805(b). Nonetheless, servicemembers 

may report that these communications 

are inconvenient, annoying, or 

harassing, or may harm their reputations 

at work. 

Q75: How prevalent is the practice of 

requesting or requiring, as part of a 

credit application or credit contract, 

contact information and consent to 

contact a servicemember’s commanding 

officer or other third parties? Are such 

consent agreements to contact a 

consumer’s employer or boss as 

common among civilian consumers? 

How frequently do debt collectors 

actually contact servicemembers’ 

commanding officers or other third 

parties identified in credit contracts? 

Are servicemembers harmed in unique 

ways by communications with their 

commanding officers? Relatedly, do 

such harms suggest solutions that are 

unique to servicemembers, either in the 

disclosures they receive as part of credit 

applications or regarding limits on 

communications with commanding 

officers? 

Collectors may communicate with 

spouses while servicemembers are 

deployed to combat zones or qualified 

hazardous duty areas.162 Collectors may 

ask military spouses to pay the debts of 

these consumers during periods when it 

is difficult for the spouse to contact 

these consumers, or when such contact 

may interfere with combat readiness. 

Alternatively, collectors may contact 

military spouses during the potentially 

sensitive period immediately following 

the death of a servicemember serving in 

a combat zone or qualified hazardous 

duty zone, with the hope of obtaining 

payment from the spouse’s military 

death gratuity. 

Q76: How common are the practices 

mentioned above? 

D. Communications With Third Parties 

(Section 805(b) of the FDCPA) 

FDCPA section 805(b) bars 

communication with most third parties 

absent prior consent of the consumer 

provided directly to the debt collector, 

express permission of a court, or as 

reasonably necessary to effectuate a 

postjudgment judicial remedy.163

Communications with the consumer, 

the consumer’s attorney, a CRA if 

otherwise permitted by law, the 

creditor, the attorney of the creditor, 

and the attorney of the debt collector are 

not subject to the bar in section 805(b). 

The purpose of this provision is to 

protect the privacy of consumers’ 

personal and financial affairs.164

1. Definition of ‘‘Consumer’’ 

The FDCPA’s definition of 

‘‘consumer’’ is ‘‘any natural person 

obligated or allegedly obligated to pay 

any debt.’’ 165 In addition, for the 

purposes of FDCPA section 805, 

‘‘consumer’’ is defined as including ‘‘the 

consumer’s spouse, parent (if the 

consumer is a minor), guardian, 

executor, or administrator.’’ 166 The 

Bureau seeks comment on the following 

questions related to the FDCPA’s 

definition of ‘‘consumer.’’ 

Q77: During a consumer’s lifetime, a 

collector can communicate with a 

consumer’s spouse about the 

consumer’s debt. When a consumer 

dies, the FDCPA does not specify 

whether a consumer’s surviving spouse 

continues to be the consumer’s 

‘‘spouse,’’ such that collectors may 

continue to contact the person without 

violating section 805(b). How often do 

collectors contact surviving spouses and 

what is the effect of such contacts? What 

would be the potential costs and 

benefits of regarding surviving spouses 

as ‘‘spouses’’ under section 805(b)? 

Q78: Are there circumstances under 

which a collector should not be 

permitted to contact a consumer’s 

spouse, for example, the individuals are 

estranged or the consumer has obtained 

a restraining order against her spouse? 

How frequently do these circumstances 

occur? What would be the costs and 

benefits of prohibiting or limiting 

communications with a consumer’s 

spouse upon the consumer’s request? 

Q79: The FDCPA permits collectors to 

communicate with ‘‘executors’’ and 

‘‘administrators’’ about a decedent’s 

debts. State laws may allow individuals 

other than those with the status of 

‘‘executor’’ or ‘‘administrator’’ under 

State law, for example, ‘‘personal 

representatives,’’ to pay the debts of a 

decedent out of the assets of the 

decedent’s estate. How frequently do 

collectors contact individuals who are 

not ‘‘executors’’ or ‘‘administrators’’ but 

still have the authority under State law 

to pay the debts of decedents out of the 

assets of decedents estates? What is the 

effect of these contacts? What would be 

the potential costs and benefits of 

treating any person who has the 

authority to pay the debts of the 

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167The FTC previously issued a Policy Statement 

providing that the agency will not take enforcement 

action under the FDCPA against collectors that 

communicate with someone who is authorized to 

pay a decedent’s debts from the estate of the 

deceased even if that person is not officially 

designated as an ‘‘executor’’ or ‘‘administrator.’’ 

Statement of Policy Regarding Communications in 

Connection With the Collection of Decedents’ Debts, 

76 FR 44915 (July 27, 2011). 

168 15 U.S.C. 1692d(6). 

169 15 U.S.C. 1692e(11). 

170For example, collectors would often leave 

messages stating, ‘‘This is John Smith calling for 

Nancy Jones about an important business matter. 

Please call me back at 555–5555.’’ 

171 424 F. Supp. 2d 643 (S.D.N.Y. 2006) (denying 

collector’s motion to dismiss). 

172See, e.g., Hosseinzadeh v. M.R.S. Assocs., 387 

F. Supp. 2d 1104 (C.D. Cal. 2005) (denying 

collector’s motion for summary judgment); Costa v. 

Nat’l Action Fin. Services, 634 F. Supp. 2d 1069, 

1076 (E.D. Cal. 2007) (denying collector’s motion 

for summary judgment); Berg v. Merchants Ass’n 

Collection Div., Inc., 586 F. Supp. 2d 1336, 1340– 

41 (S.D. Fla. 2008) (denying a collector’s motion to 

dismiss); Edwards v. Niagara Credit Solutions, Inc., 

586 F. Supp. 2d 1346, 1350–51 (N.D. Ga. 2008) 

(granting consumer’s motion for summary 

judgment), aff’d on other grounds, 584 F.3d 1350 

(11th Cir. 2009). 

173Some collectors argue that messages that do 

not reference the debt or the fact that the message 

is from a debt collector are not ‘‘communications’’ 

because they do not convey information regarding 

a debt, as required by the definition of 

‘‘communication’’ under FDCPA section 803(2). 

174See, e.g., Mark v. J.C. Christensen & Assocs., 

Inc., Civil No. 09–100 ADM/SRN, 2009 WL 

2407700, at *5 (D. Minn. Aug. 4, 2009); Berg v. 

Merchants Ass’n Collection Division, Inc., 586 F. 

Supp. 2d 1336, 1343 (S.D. Fla. 2008); Leyse v. 

Corporate Collection Services, No. 03 Civ 8491 

(DAB), 2006 WL 2708451, at *5 (S.D.N.Y. Sept. 18, 

2006). 

175 2009 FTC Modernization Report at 49. 

176ACA International, a debt collection trade 

association, developed a model message designed to 

address the Foti dilemma. The message provides the 

required disclosures only after asking third parties 

to stop listening and providing time for execution 

of those directions: ‘‘This message is for [ ]. If you 

are not [ ] or their spouse, please delete this 

message. If you are [ ] or their spouse, please 

continue to listen to this message. By continuing to 

listen to this message, you acknowledge that you 

are the right party. You should not listen to this 

message so that other people can hear it, as it 

contains personal and private information. There 

will be a three second pause in the message to allow 

you to listen to the message in private. (Pause.)’’ A 

2010 survey of ACA’s members found that 47 

percent used its proposed message, while 39 

percent did not, and 14 percent left no messages 

whatsoever. However, collectors note that these 

messages may prove too complicated to execute, 

their length may prove expensive, and their 

efficacy, in the end, may not convince courts, due 

Continued 

decedent out of the assets of the estate 

as ‘‘executors’’ or ‘‘administrators?’’ 167

To what extent do spouses, executors, 

and administrators pay decedents’ debts 

out of their own assets? Do collectors 

state or imply that such parties have an 

obligation to pay these debts? 

Q80: Do owners of debts or collectors 

inform executors and administrators 

when collecting on debt that was 

disputed by the decedent prior to the 

decedent’s death? 

Q81: A third party who is not a 

‘‘consumer’’ under FDCPA section 

805(d) may know details about the 

consumer’s debt and contact a debt 

collector to settle a consumer’s debt. For 

example, the parent of a non-minor 

child may reach out to a collector to 

assist with the child’s debt. How often 

are such contacts made? Should 

collectors be permitted to assume that 

the consumer has consented to the 

third-party contact, where a third party 

already knows about the consumer’s 

debt and is offering to repay the debt? 

When would it be appropriate to allow 

collectors to rely on this theory of 

implied consent? 

2. Recorded Messages 

Communications by telephone remain 

the most common form of consumer 

contact in debt collections. Telephones 

themselves were one of the 

communications technologies Congress 

addressed when the FDCPA was 

enacted in 1977. However, over the 

years, phone technology has changed 

dramatically, from landlines to mobile 

phones and then to smart phones. In 

addition to voice calling, the ability to 

record voice messages for others to 

retrieve at a later date is commonplace 

(e.g., voicemails). Many phones also 

allow consumers to see the caller’s 

phone number, and sometimes other 

information about the caller, before 

answering. 

When collectors leave recorded 

messages, they must identify themselves 

in the communication but they also 

must refrain from disclosing 

information about debtors to third 

parties. FDCPA section 806(6) prohibits 

debt collectors from placing telephone 

calls without meaningful disclosure of 

their identity.168 Section 807(11) of the 

FDCPA also requires that collectors 

disclose in their initial communications 

with consumers, including telephone 

calls, that they are trying to collect a 

debt and that any information they 

obtain will be used for that purpose.169

For many years, collectors did not 

include the information set forth in 

FDCPA sections 806(6) and 807(11) in 

recorded messages that they left on 

voicemails or answering machines.170

However, in 2006, a Federal district 

court in Foti v. NCO Financial Systems, 

Inc., held that a collector’s telephone 

message is a ‘‘communication’’ within 

the meaning of the FDCPA, thereby 

requiring that these messages include 

the information set forth in FDCPA 

sections 806(6) and 807(11).171 Other 

courts have reached the same 

conclusion as Foti.172

Collectors believe that Foti creates a 

dilemma. On the one hand, if recorded 

messages are ‘‘communications,’’ 173

then collectors must identify themselves 

as a debt collector. On the other hand, 

if they leave that information in a 

recorded message, they risk disclosing 

such information to a third party who 

may hear the message, which could 

violate FDCPA section 805(b). 

Courts and other observers have noted 

that collectors can avoid both forms of 

liability by simply refraining from 

leaving recorded messages altogether.174

Some collectors argue that this would 

impose high costs, by limiting their 

ability to reach many consumers, such 

as those that work night hours (given 

the calling-time restrictions in FDCPA 

section 805(a)(1)), those that do not 

answer calls from unfamiliar numbers, 

or those for whom collectors have the 

wrong mailing address. It could also 

cause harm if consumers do not learn 

that their debts are in collection and 

debt collectors furnish information 

about these debts to CRAs or file law 

suits to collect. 

In its 2009 Modernization Report, the 

FTC acknowledged the challenges that 

Foti and similar cases create for 

collectors and stated that it would be 

beneficial to clarify the law relating to 

collectors leaving recorded messages.175

Q82: How should a rule treat recorded 

messages, if at all? What benefits do 

recorded messages (as distinct from live 

phone calls) offer to debt collectors or 

consumers? 

Q83: What would be the costs and 

benefits of allowing the following 

approaches to leaving recorded 

messages? 

• When leaving recorded messages on 

certain media where there is a plausible 

risk of third-party disclosure, the 

collector leaves a message that identifies 

the consumer by name but does not 

reference the debt and does not state the 

mini-Miranda warning. 

• The collector leaves a recorded 

message identifying the consumer by 

name and referring the consumer to a 

Web site that provides the mini-Miranda 

warning after verifying the consumer’s 

identity. 

• The collector leaves a recorded 

message identifying the consumer by 

name, but only on a system that 

identifies (e.g., via an outgoing greeting) 

the debtor by first and last name and 

does not identify any other persons. 

• The collector leaves a recorded 

message that identifies the consumer by 

name and includes the mini-Miranda 

warning but implements safeguards to 

try to prevent third parties from 

listening.176

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to the continued risk that third parties can listen in. 

See, e.g., Leahey v. Franklin Collection Serv., Inc., 

756 F. Supp. 2d 1322, 1327 (N.D. Ala. 2010) 

(denying a collector’s motion to dismiss in which 

it had argued that the ACA message did not violate 

FDCPA section 1692c(b)); Berg v. Merchants Ass’n 

Collection Div., Inc., 586 F. Supp. 2d 1336, 1343 

(S.D. Fla. 2008) (denying a collector’s motion to 

dismiss). 

177See Pew Research Ctr., Polls Face Growing 

Resistance, But Still Representative Survey 

Experiment Shows (2004), available at http://

www.people-press.org/2004/04/20/polls-facegrowing-resistance-but-still-representative/. 

178See, e.g., Knoll v. Allied Interstate, Inc., 502 

F. Supp. 2d 943, 945 (D. Minn. 2007) (denying 

motion to dismiss where collector displayed caller 

ID as ‘‘Jennifer Smith’’). But see Glover v. Client 

Services, Inc., No. 1:07–CV–81, 2007 WL 2902209 

(W.D. Mich. Oct. 2, 2007) (granting motion to 

dismiss where collector displayed caller ID as 

‘‘unavailable’’). 

179The FTC’s Telemarketing Sales Rule 

concluded that telemarketers should be prohibited 

from blocking, circumventing, or altering the 

transmission of caller-ID information. 68 FR 4580, 

4623–4627 (Jan. 29, 2003). The FTC reasoned that 

transmission of caller-ID information was 

inexpensive and was not a technical impossibility 

and that doing so provided many benefits, 

including privacy protections for consumers, 

increased accountability in telemarketing, and 

increased information for law enforcement groups. 

The FTC recognized in its 2009 Modernization 

Report that prohibiting debt collectors from 

blocking, circumventing, or altering the 

transmission of caller-ID information would 

provide similar benefits in the debt collection 

context. 2009 FTC Modernization Report at 54–55. 

• The collector leaves a recorded 

message that indicates the call is from 

a debt collector but does not identify the 

consumer by name. 

• The collector leaves a message that 

does not contain the mini-Miranda 

warning, but only after the consumer 

consents to receiving voice messages 

without the mini-Miranda warning. 

Q84: Some of the proposed solutions 

described above would permit a 

collector to leave a recorded message 

without leaving the mini-Miranda 

warning. Should collectors be 

permitted, in their communications 

with consumers, to ask consumers if 

they will opt out of receiving future 

mini-Miranda warnings? If consumers 

are permitted to opt out of receiving 

future mini-Miranda messages, what 

factors or limitations, if any, should 

limit consumers’ right to opt out? 

Should consumers be allowed to opt out 

both in writing and orally? Should the 

opt-out provision extend to miniMiranda warnings given in other 

communications besides recorded 

messages? 

3. Caller Identification (‘‘Caller ID’’) 

Caller-ID technologies transmit 

certain information along with a 

telephone call that allows recipients of 

calls to view callers’ telephone numbers 

and sometimes also their names. Some 

telephones display all or part of such 

information while others, such as many 

landlines, do not. A 2004 survey by the 

Pew Research Center indicated that 

approximately half of phone owners had 

some form of caller ID.177

Caller-ID technologies present certain 

compliance issues for debt collectors. 

For instance, FDCPA section 807(14) 

requires that debt collectors use the 

‘‘true name’’ of their business. However, 

a debt collector may be concerned that 

using the name of the collector’s 

employer in caller ID risks causing a 

disclosure of the consumer’s debt to a 

third party or disclosure of the identity 

of the collector’s employer without an 

express request under FDCPA sections 

805(b) or 804(1). Alternatively, a debt 

collector may be concerned that 

changing how the name of its business 

is displayed via caller ID risks making 

a false representation or using a 

deceptive means, using a false name, or 

failing to make meaningful disclosure of 

the caller’s identity under FDCPA 

sections 806(6), 807(10), or 807(14). 

Debt collectors sometimes change the 

telephone number displayed via caller 

ID. For instance, when callers use 

certain voice-over-IP (VOIP) services, 

the phone number displayed to the 

recipient may have a local area code. 

Collectors may intend this result 

because they believe that consumers are 

more likely to pick up a local phone 

call, or it may be an unintended result 

of the telephone services collectors use. 

Callers sometimes block the caller-ID 

phone number altogether so that the 

recipient is unaware of the caller’s 

identity. Debt collectors may be 

concerned that blocking or changing the 

phone number displayed via caller ID 

risks making a false representation or 

using a deceptive means under FDCPA 

section 807(10).178 The FTC considered 

similar issues in its Telemarketing Sales 

Rule and its 2009 Modernization Report, 

but it did not make any specific 

recommendations in the debt collection 

context.179

Q85: What would be the costs and 

benefits for collectors in transmitting 

caller-ID information? In addition to the 

benefit of consumers being able to 

screen calls, how do consumers benefit 

from receiving caller-ID information? Do 

space limitations constrain the ability of 

collectors to disclose information (e.g., 

the collector’s identity) via caller ID? 

What are the risks of third-party 

disclosure by caller ID? The Bureau is 

particularly interested in data showing 

how many consumers currently use 

telephones that provide technologies 

such as caller ID, and whether these 

technologies display for consumers only 

a telephone number or whether they 

display additional information, such as 

the name of the caller. How can 

collectors use these technologies to 

minimize third-party disclosure risks 

while still providing consumers with 

relevant, truthful, and non-misleading 

information? 

Q86: Should debt collectors be 

prohibited from blocking or altering the 

telephone number or identification 

information transmitted when making a 

telephone call, for example by blocking 

the name of the company or the caller’s 

phone number or by changing the phone 

number to a local area code? What 

technological issues might complicate 

or ease compliance with regulation 

regarding caller-ID technologies? 

4. Newer Technologies 

Some new methods of communication 

appear to present greater privacy risks 

than do telephone or postal 

communications. Email, for example, is 

a service consumers often access 

through a provider, such as an employer 

or outside company (e.g., Google, 

Microsoft, Yahoo). These providers, 

including employers, may retain rights 

to access the emails of their users. If 

employers or other email providers 

retain the ability to access an email 

account, the likelihood increases that 

debt collection emails sent to those 

accounts may be read by third parties. 

Joint users of email accounts also may 

be able to read each other’s email 

messages, including any that debt 

collectors send. 

Emails may also pose risks of thirdparty disclosure because they may be 

publicly viewable by anyone near the 

display screen. Even when consumers 

check their email using a smartphone, 

nearby onlookers may have the 

opportunity to see communications 

from debt collectors, especially when 

consumers have their smartphones 

configured to conspicuously display the 

subject and sender of the message upon 

receipt. A similar concern exists for text 

messages, which are often displayed on 

the public-facing screens of mobile 

phones. 

Q87: Should the email provider’s 

privacy policy affect whether collectors 

send emails to that account? For 

instance, where a collector knows or 

should know that an employer reserves 

the right to access emails sent to its 

employees, should the collector be 

prohibited from or limited in its ability 

to email a consumer at the employerprovided email address? Should a 

collector be prohibited from using an 

employer-provided email address if a 

collector is unsure whether an employer 

or other third party has access to email 

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180See, e.g., Complaint at ¶ 15, United States v. 

Nat’l Atty. Collection Servs., Inc., No. CV13–06212 

(C.D. Cal. Aug. 23, 2013), available at http://

www.ftc.gov/os/caselist/1223032/

130925naccmpt.pdf. 

181 15 U.S.C. 1692e(11). 

182See 15 U.S.C. 1692c(b). 

183 15 U.S.C. 1692f(8). 

184 15 U.S.C. 1692c(c). 

185 15 U.S.C. 1692c(a). 

186See, e.g., U.S. Fed. Trade Comm’n, Anderson/ 

Beato Advisory Opinion (June 23, 2009), available 

at http://www.ftc.gov/os/statutes/

andersonbeatoletter.pdf. 

187U.S. Bureau of Consumer Fin. Prot., CFPB 

Bulletin 2013–12, Implementation Guidance for 

Certain Mortgage Servicing Rules (Oct. 15, 2013), 

available at http://files.consumerfinance.gov/f/

201310_cfpb_mortgage-servicing_bulletin.pdf. 

188 Interim Final Rule, Amendments to the 2013 

Mortgage Rules under the Real Estate Settlement 

Procedures Act (Regulation X) and the Truth in 

Lending Act (Regulation Z), 78 FR 62993 (Oct. 23, 

2013), available at http://

files.consumerfinance.gov/f/201310_cfpb_mortgageservicing_interim.pdf. 

189New York City Admin. Code § 2–194. 

190 15 U.S.C. 1692(a). 

191 15 U.S.C. 1692(e); See also F.T.C. v. 

LoanPointe, LLC, No. 12–4006, 2013 WL 1896820, 

*6 (10th Cir. May 8, 2013) (‘‘The FDCPA was 

expressly designed to curb the harms of abusive 

debt collection practices.’’); Schlegel v. Wells Fargo 

Bank, NA, No. 11–16816, 2013 WL 3336727 (9th 

Cir. July 3, 2013); Mellentine v. Ameriquest Mortg. 

Co., No. 11–2467, 2013 WL 560515 (6th Cir. Feb. 

14, 2013). 

sent to a consumer? How difficult is it 

for collectors to discern whether an 

email address belongs to an employer? 

Newer technologies also raise an issue 

similar to the Foti dilemma relating to 

the requirement to provide the miniMiranda and the simultaneous 

prohibition against third-party 

disclosures.180 All collection 

communications, including those made 

via new communication technologies, 

are subject to the requirements of 

FDCPA section 807(11), which requires 

that collectors clearly disclose in both 

initial and subsequent communications 

that the communication is from a debt 

collector.181 Debt collectors may be 

concerned that this requirement is in 

tension with the prohibition on thirdparty disclosure under FDCPA section 

805(b).182 To prevent such disclosures 

with traditional communication 

technologies, FDCPA section 808(8) 

prohibits the use of debt-collectionrelated language or symbols on the 

envelope of any communication, such 

as a communication through postal mail 

or telegram.183 The Bureau seeks 

comment on whether analogous 

prohibitions might be useful to prevent 

third-party disclosures in the sending of 

emails, text messages, or other 

communications made via newer 

technologies. 

Q88: What third-party disclosure 

issues arise from providing FDCPA 

section 807(11)’s mini-Miranda via 

email, text message, or other means of 

electronic communication? Are an 

email’s subject line and sender’s address 

akin to the front of an envelope mailed 

by post, and should it be subject to the 

same restrictions? Should the 

restrictions apply to the sender’s name 

on a text message or to the banner line 

on a fax? 

E. Ceasing Communications (Section 

805(c) of the FDCPA) 

The structure of the FDCPA raises the 

question of whether consumers may set 

the conditions under which collectors 

communicate with them. First, FDCPA 

section 805(c) affords consumers the 

right to cease communications from 

collectors, with limited exceptions, if 

consumers notify the collectors in 

writing.184 Second, as discussed above, 

FDCPA section 805(a) prohibits 

collectors from communicating with 

consumers at unusual or inconvenient 

times or places, from communicating 

with a consumer represented by an 

attorney, and from communicating with 

the consumers at their places of 

employment where the consumer’s 

employer prohibits such 

communications.185

The express language of the FDCPA 

does not provide consumers with the 

right to restrict collector 

communications to a particular medium 

or a particular time or place. However, 

because consumers have the right to 

cease collector communications and the 

apparent right to declare certain times 

or places inconvenient, some argue that 

consumers do or should have the right 

to limit communications to certain 

media or to certain times or places. 

Others may respond that the FDCPA 

does not confer such a right on 

consumers and, if it is interpreted to, 

this would impose undue or 

unreasonable burdens on collectors. 

Q89: What would be the costs and 

benefits of allowing consumers to limit 

the media through which collectors 

communicate with them? What would 

be the costs and benefits of allowing 

consumers to specify the times or 

locations that are convenient for 

collectors to contact them? What would 

be the costs and benefits of allowing 

consumers to provide notice orally or in 

writing to collectors of their preferred 

means or time of contact? Should there 

be limits or exceptions to a consumer’s 

ability to restrict the media, time, or 

location of debt collection 

communications? Should consumers 

also be allowed to restrict the frequency 

of communications from debt 

collectors? 

Q90: Other Federal consumer 

financial laws, as defined in section 

1002(14) of the Dodd-Frank Act, may 

require collectors to provide certain 

notices or disclosures to consumers for 

a variety of purposes, raising potential 

conflicts in cases in which consumers 

have made a written request that 

collectors cease communications.186 For 

example, the 2013 RESPA and TILA 

Servicing Final Rules require mortgage 

servicers to provide certain disclosures 

to borrowers, while the FDCPA may 

prohibit communications with those 

same consumers where the servicer falls 

within the FDCPA’s definition of a debt 

collector and the consumer has 

requested that the servicer cease 

communications. The Bureau recently 

concluded that, in most cases, servicers 

that fall within the FDCPA’s definition 

of debt collector are required to engage 

in certain communications required by 

Regulations X and Z, notwithstanding a 

consumer’s cease communications 

request under the FDCPA.187 However, 

two of the provisions under Regulations 

X and Z exempt such servicers from 

certain communications requirements in 

cases where the consumer has validly 

requested that communications cease 

under the FDCPA.188 How often do debt 

collectors provide notices or disclosures 

to consumers required by other Federal 

consumer financial laws? What would 

be the advantages and disadvantages to 

consumers of receiving these notices 

and disclosures notwithstanding their 

cease communication requests? 

Q91: Some jurisdictions require that 

collectors provide consumers with 

contact information. At least one 

jurisdiction has required that collectors 

provide not only contact information, 

but also a means of contacting the 

collector that will be answered by a 

natural person within a certain time 

period.189 How would the costs and 

benefits of providing contact 

information compare to those associated 

with a natural person answering calls 

within a certain period of time? 

V. Unfair, Deceptive, and Abusive Acts 

and Practices (Sections 806, 807, 808, 

810, and 812 of the FDCPA) 

Congress enacted the FDCPA in 

response to the ‘‘abundant evidence of 

the use of abusive, deceptive, and unfair 

practices by many debt collectors.’’ 190 A 

main purpose of the FDCPA’s 

provisions, therefore, is to prohibit the 

use of such practices.191 FDCPA section 

806 prohibits ‘‘any conduct the natural 

consequence of which is to harass, 

oppress, or abuse any person in 

connection with the collection of a 

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192 15 U.S.C. 1692d. 

193 15 U.S.C. 1692e. 

194 15 U.S.C. 1692f. 

195 12 U.S.C. 5531(b). 

196 12 U.S.C. 5531(c)(1)(A)–(B). 

197 12 U.S.C. 5531(c)(2). 

198 12 U.S.C. 5531(d)(1)–(2). 

199 12 U.S.C. 1692d, 1692e, 1692f. 

200See, e.g., Fox v. Citicorp Credit Services, Inc., 

15 F.3d 1507, 1516 (9th Cir. 1994) (holding that a 

violation of the FDCPA section 805(a) may also 

constitute an abusive practice under the FDCPA); 

Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1178 

(11th Cir. 1985) (holding that FDCPA section 1692d 

is not limited to the enumerated conduct it 

proscribes); United States v. Cent. Adjustment 

Bureau, Inc., 667 F. Supp. 370, 375 (N.D. Tex. 1986) 

aff’d as modified, 823 F.2d 880 (5th Cir. 1987) 

(holding that making calls to a debtor at 

inconvenient times, at debtor’s place of work, or 

contacting third parties about debt without debtor’s 

consent constitutes abusive, deceptive, and unfair 

debt collection); see also McVey v. Bay Area Credit 

Serv., 4:10–CV–359–A, 2010 WL 2927388, at *2 

(N.D. Tex. July 26, 2010); Arteaga v. Asset 

Acceptance, LLC, 733 F. Supp. 2d 1218, 1228 (E.D. 

Cal. 2010); Pittman v. J.J. Mac Intyre Co. of Nevada, 

Inc., 969 F. Supp. 609, 612 (D. Nev. 1997). 

201See U.S. Bureau of Consumer Fin. Prot., CFPB 

Bulletin 2013–07, Prohibition of Unfair, Deceptive, 

or Abusive Acts or Practices in the Collection of 

Consumer Debts (July 10, 2013), available at 

http://files.consumerfinance.gov/f/201307_cfpb_

bulletin_unfair-deceptive-abusive-practices.pdf; 

U.S. Bureau of Consumer Fin. Prot., CFPB Bulletin 

2013–08, Representations Regarding Effect of Debt 

Payments on Credit Reports and Scores (July 10, 

2013), available at http://

files.consumerfinance.gov/f/201307_cfpb_bulletin_

collections-consumer-credit.pdf. 

202 15 U.S.C. 1692(e). 

203 15 U.S.C. 1692d. 

204 12 U.S.C. 5531(d)(1)–(2). 

debt.’’ 192 FDCPA section 807 also bars 

the use of any ‘‘false, deceptive, or 

misleading representation or means in 

connection with the collection of any 

debt.’’ 193 FDCPA section 808 further 

prohibits the use of ‘‘unfair or 

unconscionable means to collect or 

attempt to collect any debt.’’ 194

The Dodd-Frank Act authorizes the 

Bureau to prescribe rules that identify as 

unlawful unfair, deceptive, or abusive 

acts or practices in connection with any 

transaction with a consumer for a 

consumer financial product or service or 

the offering of a consumer financial 

product or service, including collecting 

debt related to and delivered in 

connection with a consumer financial 

product or service.195 The Act does not 

describe when the Bureau may declare 

an act or practice to be ‘‘deceptive.’’ 

However, the Dodd-Frank Act permits 

the Bureau to declare an act or practice 

to be ‘‘unfair’’ if it has a reasonable basis 

to conclude that it ‘‘causes or is likely 

to cause substantial injury to consumers 

which is not reasonably avoidable by 

consumers [and] such substantial injury 

is not outweighed by countervailing 

benefits to consumers or to 

competition.’’ 196 In determining if an 

act or practice is unfair, the Bureau 

‘‘may consider established public 

policies as evidence to be considered 

with all other evidence,’’ but ‘‘[s]uch 

public policy considerations may not 

serve as a primary basis for such 

determination.’’ 197 The Act also 

authorizes the Bureau to declare an act 

or practice to be ‘‘abusive’’ if the act or 

practice: 

(1) [M]aterially interferes with the 

ability of a consumer to understand a 

term or condition of a consumer 

financial product or service; or 

(2) [T]akes unreasonable advantage 

of–(A) a lack of understanding on the 

part of the consumer of the material 

risks, costs, or conditions of the product 

or service; (B) the inability of the 

consumer to protect the interests of the 

consumer in selecting or using a 

consumer financial product or service; 

or (C) the reasonable reliance by the 

consumer on a covered person to act in 

the interests of the consumer.198

The FDCPA provides numerous 

specific examples of each category of 

‘‘harassment or abuse,’’ ‘‘false or 

misleading representations,’’ or ‘‘unfair 

practices,’’ but the language of the 

FDCPA also expressly states that these 

examples do not limit the general 

application of these categories.199

Courts have thus found other types of 

conduct to be included within these 

categories, including some conduct that 

violates other sections of the FDCPA.200

Unfair, deceptive, or abusive conduct 

that violates the FDCPA or the DoddFrank Act has been and will remain a 

focus of Bureau supervision and 

enforcement activity. Indeed, the 

Bureau recently issued two supervisory 

bulletins providing guidance to promote 

compliance with these laws.201

Although such conduct is unlawful 

under these statutes, incorporating debt 

collection provisions into rules relating 

to unfair, deceptive, or abusive conduct 

could provide greater clarity and 

specificity. Greater clarity and 

specificity as to prohibited conduct 

could make it easier for collectors and 

others to know what they must do to 

comply with the law. Rules that provide 

greater clarity and specificity as to 

prohibited conduct also could simplify 

law enforcement actions against those 

who do not comply. 

A. Abusive Conduct (Section 806 of the 

FDCPA) 

A stated purpose of the FDCPA is ‘‘to 

eliminate abusive debt collection 

practices by debt collectors, to insure 

that those debt collectors who refrain 

from using abusive debt collection 

practices are not competitively 

disadvantaged, and to promote 

consistent State action to protect 

consumers against debt collection 

abuses.’’ 202 Although the FDCPA does 

not define the term ‘‘abusive,’’ FDCPA 

section 806 prohibits debt collectors 

from engaging in any conduct ‘‘the 

natural consequence of which is to 

harass, oppress, or abuse any person in 

collection of a debt.’’ 203 The FDCPA 

also sets forth six specific examples of 

conduct that is harassing, oppressive, or 

abusive. The Dodd-Frank Act does not 

expressly prohibit conduct that is 

harassing or oppressive, but it does 

authorize the Bureau to prescribe rules 

barring ‘‘abusive’’ acts or practices in 

specified circumstances.204

1. General Abusive Conduct Questions 

Q92: Should the Bureau incorporate 

all of the examples in FDCPA section 

806 into proposed rules prohibiting acts 

and practices by third-party debt 

collectors where the natural 

consequence is to harass, oppress, or 

abuse any person? Should any other 

conduct by third-party debt collectors 

be incorporated into proposed rules 

under section 806 on the grounds that 

such conduct has such consequences? If 

so, what are those practices; what 

information or data support or do not 

support the conclusion that they are 

harassing, oppressive, or abusive; and 

how prevalent are they? 

Q93: Should the Bureau include in 

proposed rules prohibitions on firstparty debt collectors engaging in the 

same conduct that such rules would bar 

as abusive conduct by third-party debt 

collectors? What considerations, 

information, or data support or do not 

support the conclusion that this conduct 

is ‘‘abusive’’ under the Dodd-Frank Act? 

Does information or data support or not 

support the conclusion that this conduct 

is ‘‘unfair’’ or ‘‘deceptive’’ conduct 

under the Dodd-Frank Act? 

2. Specific Section 806 Prohibition 

Questions 

Q94: FDCPA section 806(3) enjoins 

debt collectors from ‘‘the publication of 

a list of consumers who allegedly refuse 

to pay debts, except to a consumer 

reporting agency or to persons meeting 

the requirements of 603(f) or 604(a)(3) of 

[the Fair Credit Reporting Act].’’ Should 

the Bureau clarify or supplement this 

prohibition in proposed rules? If so, 

how? The Bureau notes that in 

communicating with debtors through 

social media, the use of this media 

might cause collectors to make known 

the names of debtors to others using that 

medium. Should the Bureau include in 

proposed rules provisions setting forth 

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205Compare Tucker v. CBE Group, Inc., 710 F. 

Supp. 2d 1301, 1303 (M.D. Fla. 2010) (granting 

summary judgment finding no violation with 57 

calls to non-debtor, including 7 on one day, only 

6 messages left in total), with Sanchez v. Client 

Services, Inc., 520 F. Supp. 2d 1149, 1161 (N.D. Cal. 

2007) (denying summary judgment where there 

were 54 calls and 24 messages in a 6-month period, 

including 17 calls in one month and 6 calls in one 

day). 

206E.g., Bingham v. Collection Bureau, Inc., 505 

F. Supp. 864, 873 (D.N.D. 1981) (violation where 

collector immediately called back after plaintiff 

hung up). 

207 940 Code of Mass. Regulations 7.04(1)(f). 

208 2009 FTC Modernization Report at 37. 

209 16 CFR 310.4(b)(1)(iv) and 16 CFR 

310(b)(4)(iii). 

210 15 U.S.C. 1692e. 

211See U.S. Bureau of Consumer Fin. Prot., CFPB 

Supervision and Examination Manual at UDAAP 6, 

available at http://files.consumerfinance.gov/f/

201210_cfpb_supervision-and-examinationmanual-v2.pdf; see also U.S. Bureau of Consumer 

Fin. Prot., CFPB Bulletin 2012–06, Marketing of 

Credit Card Add-On Products (July 18, 2012), 

available at http://files.consumerfinance.gov/f/

201207_cfpb_bulletin_marketing_of_credit_card_

addon_products.pdf (adding that the Bureau 

applies factors that track FTC guidance in 

evaluating the effectiveness of disclosures at 

preventing consumers from being misled). 

212 Id. 

what constitutes the publication of a list 

of debtors in the context of newer 

communications technologies, such as 

social media? If so, what should these 

provisions prohibit or require and why? 

Q95: FDCPA section 806(5) bars debt 

collectors from ‘‘causing a telephone to 

ring or engaging any person in 

telephone conversation repeatedly or 

continuously with intent to annoy, 

abuse, or harass any person at the called 

number.’’ Should the Bureau clarify or 

supplement this prohibition in 

proposed rules? If so, how? 

Q96: The FDCPA does not specify 

what frequency or pattern of phone calls 

constitutes annoyance, abuse, or 

harassment. Courts have issued differing 

opinions regarding what frequency of 

calls is sufficient to establish a potential 

violation.205 Courts also often consider 

other factors beyond frequency, such as 

the pattern and content of the calls, 

where the calls were placed, and other 

factors demonstrating intent.206 Should 

the Bureau articulate standards in 

proposed rules for when calls 

demonstrate an intent to annoy, harass, 

or abuse a person by telephone? If so, 

what should those standards be and 

why? 

Q97: At least one State has codified 

bright-line prohibitions on repeated 

communications. Massachusetts allows 

only two communications via phone— 

whether phone calls, texts, or audio 

recordings—in any seven-day period.207

The prohibition is stricter for phone 

calls to a work phone, allowing only 

two in any 30-day period. If the Bureau 

provides bright-line standards in 

proposed rules, what should these 

standards include? Should there be a 

prohibition on repetitious or continuous 

communications for media other than 

phone calls and should that prohibition 

be in addition to any proposed 

restriction on phone calls? Should all 

communications be treated equally for 

this purpose, regardless of the 

communication media, such that one 

phone communication (call or text), one 

email, or one social networking message 

each count as ‘‘one’’ communication? 

What time period should be used in 

proposed rules in assessing an 

appropriate frequency of 

communications? 

The Bureau recognizes that many 

consumers complain not only about the 

number and frequency of the calls they 

received from collectors, but also that 

they answer many calls in which the 

collector hangs up when they answer or 

in which there is no one on the line. It 

appears that such calls are the result of 

debt collectors’ use of predictive dialer 

technologies in placing calls. Predictive 

dialers are automated systems that 

determine who to call, when to call, and 

how often to call, based on information 

about the time of day, the time zone of 

the consumer, the number of collectors 

available, and other factors such as the 

length of prior collection calls. The 2009 

FTC Modernization Report noted that 

approximately 50 percent of ACA 

members use some type of predictive 

dialer, and that dialers may be the 

‘‘single most significant change in 

technology since the enactment of the 

FDCPA,’’ given their ability to increase 

the efficiency of collection operations. 

The 2009 FTC Modernization Report 

concluded that predictive dialers can 

result in disconnections when a 

consumer is reached but no collector is 

available, resulting in ‘‘hang-ups’’ or 

‘‘dead air.’’ 208 Although the FTC did 

not make policy recommendations 

relating to the use of predictive dialers 

in the collection context, the FTC has 

addressed hang-up and dead air calls in 

its Telemarketing Sales Rule. Call 

abandonment under the Telemarketing 

Sales Rule is treated as ‘‘abusive,’’ but 

the Rule creates a safe harbor for 

telemarketing systems that contain 

certain safeguards.209 For instance, to 

qualify for the safe harbor, three percent 

or less of the calls the system places can 

be abandoned. The system also must 

allow the consumer’s phone to ring for 

at least 15 seconds or four rings before 

disconnecting an unanswered call. 

Q98: What are the costs and benefits 

to consumers and collectors of using 

predictive dialers? How commonly are 

they used by the collection industry and 

what are the different ways in which 

they are used? How often do consumers 

receive debt collection calls resulting in 

hang-ups, dead air, or other similar 

treatment? 

Q99: Should there be standards 

limiting call abandonment or dead air 

for debt collection calls, similar to the 

standards under the FTC’s 

Telemarketing Sales Rule? Are there 

reasons why debt collection standards 

should be more stringent or more 

lenient than standards for 

telemarketing? 

B. Deceptive Conduct (Section 807 of 

the FDCPA) 

1. FDCPA Examples of Deception 

As discussed above, FDCPA section 

807 prohibits ‘‘any false, deceptive, or 

misleading representation or means in 

connection with the collection of any 

debt.’’ Without limiting the application 

of this general prohibition, section 807 

also sets forth 16 examples of such 

prohibited behavior but does not 

explicitly define the terms ‘‘false, 

deceptive, or misleading.’’ 210

The Dodd-Frank Act also prohibits 

deceptive practices but does not define 

‘‘deceptive.’’ The Bureau has stated that 

the FTC’s interpretation and application 

of deception under the FTC Act informs 

the Bureau’s standard for deceptive 

practices under the Dodd-Frank Act.211

Under section 5 of the FTC Act, 

deceptive acts or practices can take the 

form of written or oral representations 

or omissions of material information. 

Whether a representation or omission is 

likely to mislead under the 

circumstances is considered from the 

viewpoint of a reasonable consumer.212

To be deceptive, a representation or 

omission must be material, that is, likely 

to affect a consumer’s purchasing or 

other decisions. Section 807 contains a 

set of prohibitions regarding (1) the 

identity of collectors; (2) character, 

amount, or status of debt; (3) 

documentation of debt; (4) consequence 

of non-payment of debt; (5) implications 

of debt transfers; and (6) reporting credit 

information. 

Q100: With respect to each of the 

areas covered in FDCPA section 807, 

should the Bureau clarify or supplement 

any of these FDCPA provisions? If so, 

how? Are there other representations or 

omissions that the Bureau should 

address to prevent deception in each of 

these areas? For each additional 

representation or omission you believe 

should be addressed, please describe its 

prevalence and why you believe it is 

material to consumers. 

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213Nielsen, State of the Media: The Social Media 

Report 2012, at 3 (Dec. 2012), available at http:// 

www.nielsen.com/us/en/reports/2012/state-of-themedia-the-social-media-report-2012.html. 

214For the purposes of this document, social 

media is a form of interactive online 

communication in which users can generate and 

share content through text, images, audio, and/or 

video; messages sent via email or text message, 

standing alone, do not constitute social media. 

215 15 U.S.C. 1692e(10). 

216 15 U.S.C. 1692e(11). 

217A recent Pew Internet Research study found 

that 73 percent of cell phone users use text 

messages, sending an average of over 40 text 

messages each day. See Pew Research Ctr., 

Americans and Text Messaging (Sept. 2011), 

available at http://pewinternet.org/Reports/2011/

Cell-Phone-Texting-2011.aspx. 

218See, e.g., Stipulated Order for Permanent 

Injunction and Monetary Judgment, United States v. 

Nat’l Attorney Collection Services, Case No. CV13– 

06212 (C.D. Cal. Aug. 23, 2013), available at 

http://ftc.gov/os/caselist/1223032/

130925nacstip.pdf. 

219 2009 FTC Modernization Report at 20–21. 

Q101: Do collectors falsely state or 

imply that the Servicemembers Civil 

Relief Act does not apply to debts? What 

would be the costs and benefits of 

requiring collectors to disclose 

information about rights related to debts 

subject to the Servicemembers Civil 

Relief Act to a consumer, consumer’s 

spouse, or dependents? What debt 

collection information related to the 

Servicemembers Civil Relief Act should 

be communicated? 

Q102: The Bureau has heard reports 

of debt collectors falsely stating that 

they will have a servicemember’s 

security clearance revoked and 

threatening action under the Uniform 

Code of Military Justice if the 

servicemember fails to pay the debt. 

How prevalent are these threats? 

Q103: Spouses and surviving spouses 

of alleged debtors may be asked by 

collectors to pay the spouse’s individual 

debt in circumstances in which the nondebtor spouse is not legally liable for the 

debt. Do debt collectors state or imply 

that the non-debtor spouse or surviving 

spouse has an obligation to pay debts for 

which they are not liable? What would 

be the costs and benefits of requiring 

that collectors, where applicable, use 

disclosures or other approaches to 

convey that non-debtor spouses or 

surviving spouses have no legal 

obligation to pay the spouse’s 

individual debt? 

Q104: Authorized users on credit 

cards are sometimes contacted by debt 

collectors and asked to pay debts in 

circumstances where the cardholder is 

liable but the authorized user is not. 

How often are authorized users asked to 

pay debts for which they are not liable? 

What would be the costs and benefits of 

requiring that collectors disclose to 

authorized users, where applicable, that 

they have no legal obligation to pay the 

debt? 

2. Other Deceptive Act and Practices 

As discussed above, Congress 

intended the specific conduct set out in 

FDCPA section 807 to be a nonexhaustive list of examples of false, 

deceptive, and misleading 

representations. Indeed, FDCPA section 

807(10) is a broad provision which 

prohibits collectors from using any 

‘‘false representation or deceptive 

means to collect or attempt to collect 

any debt or to obtain information 

concerning a consumer.’’ In addition, 

the Dodd-Frank Act also includes a 

general prohibition on any covered 

person or service provider engaging in 

unfair, deceptive, or abusive acts or 

practices, which would include 

deceptive acts and practices in the 

collection of debts arising out of 

consumer credit transactions. 

Consequently, the Bureau is interested 

in information about deceptive acts and 

practices beyond the specific examples 

in section 807 that would be appropriate 

to include in proposed rules. 

a. Newer Communication Technologies 

Collectors are making use of newer 

communications technologies like social 

media and text messaging. In recent 

years, social media has become a major 

means of communications. A 2012 

Nielson report found that over 20 

percent of internet time is devoted to 

social media.213 Social media can take 

many forms, including, but not limited 

to, micro-blogging sites (e.g., Facebook, 

Google Plus, MySpace, and Twitter); 

forums, blogs, customer review Web 

sites, and bulletin boards (e.g., Yelp); 

photo and video sites (e.g., Flickr and 

YouTube); sites that enable professional 

networking (e.g., LinkedIn); virtual 

worlds (e.g., Second Life); and social 

games (e.g., FarmVille).214

Collectors’ use of social media to 

communicate with consumers 

implicates certain provisions of the 

FDCPA. Section 807(10) forbids 

collectors from using ‘‘false 

representation or deceptive means to 

collect or attempt to collect any debt or 

to obtain information concerning a 

consumer.’’ 215 Section 807(11) requires 

that certain disclosures accompany 

initial and subsequent communications 

with consumers.216 Similar concerns 

about deception in collecting via social 

media may arise under the Dodd-Frank 

Act’s prohibition on deceptive acts and 

practices. 

Text messaging is now a common 

mode of communication.217 It may be 

more difficult to disclose information in 

a text message than in other methods 

collectors use to communicate with 

consumers. Text messages (sometimes 

called ‘‘short message service’’ or 

‘‘SMS’’) are normally limited to 160 

characters (although some services 

allow other forms of ‘‘messaging’’ with 

longer formats). Debt collectors who 

communicate by text message, among 

other things, are subject to FDCPA 

section 807(11), but the limited 

character format of text messages 

presents a special challenge for 

inclusion of both the mini-Miranda 

disclosure and the communication 

itself.218

Q105: What technological limitations 

might prevent mini-Miranda warnings 

from being sent via text message? 

Should consumers be able to opt in to 

collector communications via text 

message that do not include a miniMiranda warning? If so, what type of 

consent should be required and how 

and when should it be obtained? Could 

the mini-Miranda warning be more 

succinctly stated so that it fits within 

the character constraints of a text 

message? 

Q106: What technological innovations 

(e.g., links, attachments) might facilitate 

the delivery of mini-Miranda warnings 

via text message? For instance, what 

would be the potential costs and 

benefits of allowing a collector to send 

the consumer a text message that does 

not contain the mini-Miranda but 

contains only a link to a Web site, PDF, 

or similar document that provides the 

mini-Miranda as well as other 

information about the consumer’s debt? 

Should the acceptability of relying on a 

link or an attachment depend on the 

frequency with which persons who 

receive such links or attachments go to 

the linked material or open the 

attachment? Would relying on a link or 

an attachment raise privacy or security 

risks? If so, how significant are those 

risks? 

Q107: Are there challenges in 

providing the mini-Miranda warning via 

other newer technologies, such as email 

or social networking sites? If so, what, 

if anything, should be included in 

proposed rules to address these 

challenges? 

b. Payment Methods and Fees 

With advances in technologies and in 

the marketplace, consumers now have a 

greater variety of payment options than 

they once did. For example, as the FTC 

noted in its 2009 Modernization Report, 

electronic payment methods have 

continued to proliferate in recent 

years.219 According to the Federal 

Reserve, in 2009, electronic payments 

exceeded 75 percent of noncash retail 

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220Fed. Reserve Sys., The 2010 Federal Reserve 

Payments Study: Noncash Payment Trends in the 

United States 2006–2009 at 4–5 (Dec. 10, 2007), 

available at http://www.frbservices.org/files/

communications/pdf/press/2010_payments_

study.pdf. 

221 15 U.S.C. 1692f. 

222 12 U.S.C. 5531(c)(1). 

223 12 U.S.C. 5531(c)(2). 

224See U.S. Bureau of Consumer Fin. Prot., CFPB 

Supervision and Examination Manual at UDAAP 6. 

225 15 U.S.C. 1692f(5). 

226 2009 FTC Modernization Report at 41. 

227 Id. at 42. 

payments, with checks constituting less 

than 25 percent of noncash retail 

payments.220

Q108: Which methods of payment do 

consumers use to pay debts? How 

frequently do consumers use each type 

of payment method? In particular, how 

often do consumers pay collectors 

through electronic payment systems? 

Q109: Do collectors charge fees to 

consumers based on the method that 

they use to pay debts? How prevalent 

are such fees for each payment method 

used? How much is charged for each 

payment method used? 

Q110: Do collectors make false or 

misleading claims to consumers about 

the availability or cost of payment 

methods? If so, how prevalent are these 

claims and why are they material to 

consumers? 

Q111: Do consumers understand the 

costs of using specific payment methods 

to pay their debts or the speed with 

which their payment will be processed 

depending on which payment method 

they choose? Should disclosures be 

required with respect to the costs, 

speed, or reversibility of alternative 

payment methods and, if so, what type 

of disclosures? 

C. Unfair Conduct (Section 808 of the 

FDCPA) 

As discussed above, FDCPA section 

808 prohibits any ‘‘unfair or 

unconscionable means to collect or 

attempt to collect any debt.’’ 221 Without 

limiting the application of this general 

prohibition, section 808 sets forth eight 

examples of such prohibited behavior. 

Unfairness is not defined in the FDCPA. 

The Dodd-Frank Act also prohibits 

unfairness, and it authorizes the Bureau 

to identify through rulemaking acts or 

practices as unfair so long as ‘‘the 

Bureau has a reasonable basis to 

conclude that–(A) the act or practice 

causes or is likely to cause substantial 

injury to consumers which is not 

reasonably avoidable by consumers; and 

(B) such substantial injury is not 

outweighed by countervailing benefits 

to consumers or to competition.’’ 222 The 

Bureau may consider established public 

policies as evidence in its analysis of 

whether acts and practices are unfair.223

This Dodd-Frank Act approach to 

‘‘unfairness’’ is very similar to the 

approach to unfairness in section 5(n) of 

the FTC Act, and the Bureau has stated 

that its views on unfairness under the 

Dodd-Frank Act are informed by the 

FTC’s application of the unfairness 

standard in the FTC Act.224

1. General Unfair Conduct Questions 

Q112: Should the Bureau incorporate 

the examples from FDCPA section 808 

into proposed rules prohibiting unfair or 

unconscionable means to collect or 

attempt to collect any debt by thirdparty debt collectors? Should any of the 

specific examples addressed in section 

808 be clarified or supplemented and, if 

so, how? Should any other conduct by 

third-party debt collectors be 

incorporated into proposed rules 

prohibiting unfair or unconscionable 

means of collection? If so, what are 

those practices; what information or 

data support or do not support the 

conclusion that they are unfair or 

unconscionable; and how prevalent are 

they? 

Q113: Should the Bureau include in 

proposed rules prohibitions on firstparty debt collectors engaging in the 

same conduct that such rules would bar 

as unfair or unconscionable by thirdparty debt collectors? What information 

or data support or do not support the 

conclusion that this conduct is ‘‘unfair’’ 

under the Dodd-Frank Act? What 

information or data support or do not 

support the conclusion that this conduct 

is ‘‘abusive’’ or ‘‘deceptive’’ conduct 

under the Dodd-Frank Act? 

2. Specific Section 808 Prohibition 

Questions 

Q114: Section 808(1) of the FDCPA 

prohibits collecting any amount unless 

it is expressly authorized by the 

agreement creating the debt or permitted 

by law. Should the Bureau clarify or 

supplement this prohibition in 

proposed rules? 

Q115: The FDCPA expressly defines 

the amount owed to include ‘‘any 

interest, fee, charge, or expense 

incidental to the principal obligation.’’ 

Section 808(1) makes it unlawful for 

debt collectors to collect on these 

amounts unless authorized by the 

agreement creating the debt or permitted 

by law. Should the Bureau clarify or 

supplement this prohibition in 

proposed rules? 

FDCPA section 808(5) prohibits debt 

collectors from ‘‘causing charges to be 

made to any person for communications 

by concealment of the true purpose of 

the communication.’’ 225 Since the 

FDCPA was enacted in 1977, 

communications methods other than 

collect calls and telegrams have been 

introduced that also may cause 

consumers to incur charges. Two 

prominent examples are calls to mobile 

phones and text messaging. While some 

consumers have wireless plans that do 

not charge for either mode of 

communication, other consumers are 

charged by the minute or by the text 

message. Some free-to-end-user services, 

however, may be available to allocate all 

charges to collectors and thereby obviate 

concerns about charges to consumers. 

In the 2009 FTC Modernization 

Report, the FTC recommended that ‘‘the 

law should presume that consumers 

will incur charges for calls and text 

messages made to their mobile phones, 

and, therefore, generally prohibit debt 

collectors from contacting consumers 

via mobile phones.’’ 226 However, the 

FTC also recognized that ‘‘the law may 

need to be changed in the future if most 

consumers would not be charged based 

on the number of calls or text messages 

received or the time spent on calls to 

their mobile phones.’’ 227

Q116: What communications 

technologies could cause consumers to 

incur charges from contacts by debt 

collectors? What are the costs to 

consumers and how many consumers 

use these technologies? For instance, 

how common is it for consumers to be 

charged for text messages and what is 

the average cost of receiving a text 

message? How common is it for 

consumers to be charged for mobile 

phone calls and what is the average cost 

of receiving an average-length call? Does 

incurring such charges vary by 

demographic group? If so, how? 

Q117: Should proposed rules presume 

that consumers incur charges for calls 

and text messages made to their mobile 

phones? Should the failure to use freeto-end-user services when using 

technologies that would otherwise 

impose costs on the consumer be 

prohibited? What would be the costs 

and challenges for collectors of 

implementing such requirements? 

Q118: Should proposed rules require 

collectors to obtain consent before 

contacting consumers using a medium 

that might result in charges to the 

consumer, such as text messaging or 

mobile calls? If so, what sort of consent 

should be required and how should 

collectors be required to obtain it? 

Q119: Should proposed rules impose 

other limits beyond consent on 

communications via media that result in 

charges to the consumer and if so, what 

limits? For example, would it be feasible 

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228 15 U.S.C. 1692h. 

229For example, New York City has issued rules 

providing that if a payment schedule or settlement 

agreement is reached, the collector must send a 

confirmation of the arrangement to the debtor 

within five business days with certain information. 

New York City Admin. Code § 2–192. 

230See, e.g., United States v. Luebke Baker & 

Assoc., No. 1:12-cv-01145 (C.D. Ill. May 23, 2012) 

(debt collector), available at http://ftc.gov/os/

caselist/0823206/120515luebkecmpt.pdf; United 

States v. Asset Acceptance, LLC, No. 8:12-cv-00182 

(M.D. Fla. Jan. 31, 2012) (debt collector), available 

at http://www.ftc.gov/os/caselist/0523133/

120130assetcmpt.pdf; United States v. Allied 

Interstate, Inc., No. 0–10-cv-04295 (D. Minn. Oct. 

21, 2010) (debt collector), available at http:// 

www.ftc.gov/os/caselist/0823207/

101021alliedinterstatecmpt.pdf; United States v. 

Credit Bureau Collection Services, No. 2–10-cv-169 

(D. Ohio Feb. 24, 2010) (debt collector), available 

at http://www.ftc.gov/os/caselist/0623226/

100303creditcollectioncmpt.pdf. Note that the FTC 

also has brought actions against mortgage servicers 

for making unsubstantiated claims to consumers. 

FTC v. EMC Mortg. Corp., No. 4:08-cv-00338 (E.D. 

Tex. Sept. 9, 2008) (mortgage servicer), available at 

http://www.ftc.gov/os/caselist/0623031/

080909emcmortgagecmplt.pdf; FTC v. Countrywide 

Home Loans, Inc., No. 2–10-cv-04193 (C.D. Cal. 

June 7, 2010) (mortgage servicer), available at 

http://ftc.gov/os/caselist/0823205/

100607countrywidecmpt.pdf. 

231 2009 FTC Modernization Report at 24 

(footnotes omitted). 

232U.S. Bureau of Consumer Fin. Prot., CFPB 

Examination Manual at UDAAP 1. 

233The Bureau has explained: 

The CFPB will give due consideration to the 

application of other written guidance, 

interpretations, and policy statements issued prior 

to July 21, 2011, by a transferor agency, in light of 

all relevant factors, including: whether the agency 

had rulemaking authority for the law in question; 

the formality of the document in question and the 

weight afforded it by the issuing agency; the 

persuasiveness of the document; and whether the 

document conflicts with guidance or interpretations 

issued by another agency. 

Identification of Enforceable Rules and Orders, 76 

FR 43569, 43570 (July 21, 2011). 

234U.S. Bureau of Consumer Fin. Prot., CFPB 

Bulletin 2013–08, Representations Regarding Effect 

of Debt Payments on Credit Reports and Scores 

(July 10, 2013), available at http://

files.consumerfinance.gov/f/201307_cfpb_bulletin_

collections-consumer-credit.pdf. 

to require in proposed rules that 

consumers have the right to opt out of 

communications via certain media to 

avoid the possibility of being charged? 

If so, should initial communications via 

such media be required under proposed 

rules to include a disclosure of the 

consumer’s right to opt out? Should 

proposed rules include limits on the 

frequency with which collectors use 

such media? 

3. Payment Acts and Practices 

Q120: FDCPA section 810 states, ‘‘If 

any consumer owes multiple debts and 

makes any single payment to any debt 

collector with respect to such debts, 

such debt collector may not apply such 

payment to any debt which is disputed 

by the consumer and, where applicable, 

shall apply such payment in accordance 

with the consumer’s direction.’’ 228

Should the Bureau clarify or 

supplement this prohibition in 

proposed rules? If so, how? In addition, 

what information or data support or do 

not support the conclusion that conduct 

that violates FDCPA section 810 is 

unfair or abusive conduct under the 

Dodd-Frank Act? Why or why not? 

Q121: Should proposed rules require 

that payments be applied according to 

specific standards in the absence of an 

express consumer request or require a 

collector to identify the manner in 

which a payment will be applied? 

Should proposed rules require that the 

payment be applied on or as of the date 

received or at some other time? 

Q122: Many consumers complain that 

debt collectors seek to recover on debts 

that consumers have already paid and 

therefore no longer owe. Other 

consumers assert that debt collectors 

promise that they will treat partial 

payments on debts as payment in full, 

but then collectors subsequently seek to 

recover the remaining balance on these 

debts. To what extent do debt collectors 

currently provide consumers with a 

receipt or other documentation showing 

the amount they have paid and whether 

it is or is not payment in full? Should 

such documentation be required under 

proposed rules? Are there any State or 

local laws that are useful models to 

consider? 229

D. Substantiation 

Firms may want to make claims to 

consumers for which they lack support, 

or lack adequate support, at the time 

they are made. To protect consumers 

from harm if such claims prove to be 

false, the FTC has a long history of 

treating certain types of unsubstantiated 

claims to consumers in advertising as 

unfair or deceptive in violation of 

section 5 of the FTC Act. 

Even though the FTC’s substantiation 

doctrine arose in the advertising 

context, the FTC has used it to protect 

consumers in other contexts. Most 

significantly, the FTC has brought cases 

alleging that debt collectors made 

unsubstantiated claims to consumers in 

seeking to recover on debts.230 The FTC 

has clearly articulated its view that 

‘‘[c]ollectors have a legal obligation to 

possess information to support the 

claims they make to consumers about 

debt, pursuant to both Section 5(a) of 

the FTC Act, and Section 807 of the 

FDCPA.’’ 231 The Bureau’s views 

regarding unfair and deceptive acts and 

practices under the Dodd-Frank Act are 

informed by the FTC’s application of 

those terms under the FTC Act.232 The 

Bureau also gives due consideration to 

the FTC’s interpretation of the FDCPA 

prior to July 21, 2011.233

Q123: Should the Bureau’s proposed 

rules impose standards for the 

substantiation of common claims related 

to debt collection? If so, what types of 

claims should be covered and what 

level of support should be required for 

each such claim? What would be the 

costs and benefits to consumers, 

collectors, and others of requiring 

different levels of substantiation? Would 

a case-by-case approach to 

substantiating claims instead be 

preferable? Why or why not? 

Q124: Should the information or 

documentation substantiating a claim 

depend upon the type of debt to which 

the claim relates (e.g., mortgage, credit 

card, auto, medical)? Is it more costly or 

beneficial to substantiate claims 

regarding certain types of debts than 

others? 

Q125: Should the information or 

documentation expected to substantiate 

a claim depend on the stage in the 

collection process (e.g., initial 

communication, subsequent 

communications, litigation) and if so, 

why? 

Q126: What information do debt 

collectors use and should they use to 

support claims of indebtedness: 

• Prior to sending a validation notice; 

• after a consumer has disputed the 

debt; 

• after a consumer has disputed the 

debt and it has been verified; and 

• prior to commencing a lawsuit to 

enforce a debt? 

Q127: In July 2013, the Bureau 

released a compliance bulletin 

explaining that representations about 

the effect of debt payments on credit 

reports, credit scores, and 

creditworthiness have the potential to 

be deceptive under the FDCPA and the 

Dodd-Frank Act.234 What information 

are debt collectors using to support the 

following claims: 

• The consumer’s credit score will 

improve if the consumer pays the debt; 

• payment of the debt will result in 

the collection trade line being removed 

from a consumer’s credit report; 

• the consumer’s creditworthiness 

will improve if the consumer pays the 

debt; and the collector will furnish 

information about a consumer’s debt to 

a CRA? 

E. Service Providers and Third-Party 

Liability for UDAAP Violations 

The previous section of this Part 

sought comment related to potential 

proposed rules that would prevent 

unfair, deceptive, or abusive acts and 

practices by first-party and third-party 

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235Section 1002(26)(A) of the Dodd-Frank Act, 12 

U.S.C. 5481(26)(A). The term, ‘‘service provider’’ 

does not include ‘‘a person solely by virtue of such 

person offering or providing to a covered person— 

(i) a support service of a type provided to 

businesses generally or a similar ministerial service; 

or (ii) time or space for an advertisement for a 

consumer financial product or service through 

print, newspaper, or electronic media.’’ Section 

1002(26)(B) of the Dodd-Frank Act, 12 U.S.C. 

5481(26)(B). 

236E.g., Kimber v. Fed. Fin. Corp., 668 F. Supp. 

1480 (M.D. Ala. 1987); Basile v. Blatt, Hasenmiller, 

Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 

(N.D. Ill.2009). 

237Timothy E. Goldsmith & Natalie Martin, 

Testing Materiality Under the Unfair Practices Acts: 

What Information Matters When Collecting TimeBarred Debts?, 64 Consumer Fin. L.Q. Rep. 372 

(2010). This study examined whether consumers’ 

responses to collection efforts are affected by the 

knowledge that a debt is time barred. The study 

concluded that ‘‘[t]hose participants who were told 

that the debt could not be enforced through court 

action chose different repayment options than 

participants who were not told about time-barred 

debt.’’ Goldsmith & Martin at 377–80. In the study, 

34 percent of subjects said they would decline to 

pay a hypothetical debt when they were told the 

debt ‘‘cannot be enforced against you through court 

action because the enforcement period has run 

out.’’ Only 6 percent of subjects said they would 

decline to pay when they had not received the 

notice. This difference was statistically significant. 

Id. at 378–79. 

238Complaint at ¶ 34, United States v. Asset 

Acceptance, LLC, No. 8:12–CV–182–T–27EAJ (M.D. 

Fla. Jan. 30, 2012), available at http://www.ftc.gov/ 

opa/2012/01/asset.shtm. 

239 Id. at ¶¶ 81–82. 240The Asset-required disclosure states that: (1) 

‘‘The law limits how long [the consumer] can be 

sued on the debt,’’ and (2) ‘‘Because of the age of 

[the consumer]’s debt, we will not sue [the 

consumer] for it.’’ Consent Decree, United States v. 

Asset Acceptance, LLC, No. 8:12–cv–182–T–27EAJ 

(M.D. Fla. Jan. 31, 2012), available at http://

www.ftc.gov/opa/2012/01/asset.shtm. 241 In re Am. Express Centurion Bank, Salt Lake 

City, Utah, FDIC–12–315b, FDIC–12–316k, 2012– 

CFPB–0002 (Oct. 1, 2012), at 6–7 (Joint Consent 

Order, Joint Order for Restitution, and Joint Order 

to Pay Civil Money Penalty), available at http://

files.consumerfinance.gov/f/2012-CFPB-0002- 

American-Express-Centurion-Consent-Order.pdf. 242Brief for FTC and CFPB as Amici Curiae 

Supporting Respondent, Delgado v. Capital Mgmt. 

Services, LP, No. 4:12–cv–04057 (7th Cir. Aug. 14, 

2013), available at http://

files.consumerfinance.gov/f/201309_cfpb_agencybrief_12-cv-04057.pdf. 

collectors. Section 1031(a) of the DoddFrank Act, however, not only prohibits 

such collectors from engaging in these 

acts and practices but also more broadly 

prohibits UDAAPs from being 

committed by ‘‘service providers.’’ 

Under the Dodd-Frank Act, ‘‘service 

provider’’ is defined to include ‘‘any 

person that provides a material service 

to a covered person in connection with 

the offering or provision * * * of a 

consumer financial product.’’235 The 

Dodd-Frank Act prohibits these service 

providers ‘‘from committing or engaging 

in an unfair, deceptive, or abusive act or 

practice * * * in connection with a 

consumer for a consumer financial 

product or service, or the offering of a 

consumer financial product or service.’’ 

This prohibition includes those 

activities or practices that may arise out 

of a consumer credit transaction. 

Q128: What services are provided to 

debt collectors in connection with the 

collection of debts and who provides 

them? Are the types of services the same 

for first-party and third-party collectors? 

What information or data support or do 

not support the conclusion that such 

services provided are material to the 

collection of debts? 

Q129: Are there specific acts or 

practices by service providers that 

should be specified in proposed rules as 

constituting unfair, deceptive, or 

abusive acts or practices in connection 

with the collection of debts? How 

prevalent are such acts or practices? 

In addition to the prohibition on 

unfair, deceptive, and abusive acts and 

practices by service providers, section 

1036(a)(3) of the Dodd-Frank Act 

prohibits ‘‘any person [from] knowingly 

or recklessly provid[ing] substantial 

assistance to a covered person or service 

provider in violation of the provisions 

of section 1031 or any rule or order 

issued thereunder.’’ 

Q130: Who provides substantial 

assistance to debt collectors? Is the 

assistance provided to first-party 

collectors the same as the assistance 

provided to third-party collectors? What 

measure should be used to assess 

whether such services provided are 

material to the collection of debts? 

Q131: In what types of circumstances, 

if any, are persons knowingly or 

recklessly providing substantial 

assistance to collectors who are a 

‘‘covered person’’ or ‘‘service provider’’ 

as defined in the Dodd-Frank Act with 

respect to acts or practices by the 

covered person or service provider that 

violate section 1031? How prevalent is 

conduct by such persons? 

VI. Time-Barred Debts 

Time-barred debts are debts that are 

older than the applicable statute of 

limitations. There are no requirements 

set forth in the FDCPA or the DoddFrank Act regarding time-barred debts. 

The Bureau is generally interested in 

comments about the need for and the 

costs and benefits of proposed rule 

provisions concerning the collection of 

time-barred debt. The Bureau 

particularly is interested in comment 

about the need for and the costs and 

benefits of requiring debt collectors to 

provide consumers with information 

relating to time-barred debts. 

A. No Legal Right To File Suit on TimeBarred Debt 

The FTC and consumer groups have 

raised the concern that many consumers 

do not know or understand their legal 

rights with respect to the collection of 

time-barred debts. For example, a 

consumer may not realize that a debt 

collector is collecting on a time-barred 

debt and that it is unlawful 236 under the 

FDCPA for collectors to sue on such 

debts if the consumer does not pay. 

Some empirical research suggests that 

information about the time-barred status 

of debts may affect consumers’ 

decisions to pay debts and in what order 

to pay their debts.237

The FTC and the Bureau have taken 

law enforcement actions arising from 

the collection of time-barred debts. In 

2012, the FTC brought an action against 

a debt buyer that allegedly collected on 

time-barred debt without disclosing to 

consumers that they could no longer be 

sued successfully on the debt. The U.S. 

Department of Justice, on behalf of the 

FTC, filed a complaint against Asset 

Acceptance, LLC (‘‘Asset’’) alleging that 

when Asset collects time-barred debts, 

‘‘[m]any consumers do not know if the 

accounts that Asset is attempting to 

collect are beyond the statute of 

limitations. . . . When Asset contacts 

consumers to collect on a debt, many 

consumers believe they could 

experience serious negative 

consequences, including being sued, if 

they fail to pay the debt.’’ 238 The 

complaint alleged that it was deceptive 

for Asset to fail to disclose to consumers 

that they could not be sued if they did 

not pay.239 Asset agreed to a settlement 

under which it was required to disclose 

such information when it collects on 

debts that it knows or should know are 

time barred.240 Later in 2012, the 

Bureau also entered into a settlement 

agreement with a bank collecting on its 

own debts that requires the bank to 

provide disclosures concerning the 

expiration of the bank’s litigation rights 

when collecting debts that are barred by 

the applicable statute of limitations.241

The Bureau and the FTC also recently 

explained in a joint amicus brief that 

consumers may be deceived in 

connection with the collection of timebarred debts.242 Consumers, in some 

circumstances, may infer from a 

collection attempt the mistaken 

impression that a debt is enforceable in 

court even in the absence of an express 

or implied threat of litigation. 

Accordingly, where a debt is not legally 

enforceable, a debt collector may be 

required to make the affirmative 

disclosure to that effect to avoid 

misleading consumers. 

Q132: Is there any data or other 

information that demonstrate or indicate 

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243For example, if a debt collector offers to accept 

a $50 payment on a $500 time-barred debt, a 

consumer may believe that the $50 payment itself 

is the only consequence to him or her of making 

the payment. 

244 2013 FTC Debt Buyer Report at 47. 

245 2010 FTC Litigation and Arbitration Report 

at 28. 

246N.Y.C. Admin. Code § 20–493.2 (2012); N.M. 

Admin. Code 12.2.12; 940 Mass. Code Regs. 

7.07(24). 

what consumers believe may occur 

when they do not pay debts in response 

to collection attempts? Does it show that 

consumers believe that being sued is a 

possibility? 

Q133: Should the Bureau include in 

proposed rules a requirement that debt 

collectors disclose when a debt is time 

barred and that the debt collector cannot 

lawfully sue to collect such a debt? 

Should the disclosure be made in the 

validation notice? Should it be made at 

other times and in other contexts? 

Should such a rule be limited to 

situations in which the collector knows 

or should have known that the debt is 

time barred? Is there another standard 

that the Bureau should consider? 

Q134: The FTC in its Asset 

Acceptance consent order and several 

States by statute or regulation have 

mandated specific language disclosing 

that consumers cannot be lawfully sued 

if they do not pay time-barred debts. 

Please identify what language would be 

most effective in conveying to 

consumers that the collector cannot 

lawfully sue to collect the debt, and 

why. 

B. Revival of Statute of Limitations With 

Partial Payment of Debt 

The FTC and consumer groups also 

have raised concerns that consumers do 

not understand that partial payments in 

some jurisdictions may revive the entire 

balance of the debt for a new statute of 

limitations period. Specifically, 

consumers may believe that when they 

make a partial payment on a time-barred 

debt they have only obligated 

themselves in the amount of the partial 

payment but in many circumstances 

that is not true.243 Under the laws of 

most States, a partial payment on a 

time-barred debt revives the entire 

balance of the debt for a new statute of 

limitations period.244

The FTC stated in its 2010 FTC 

Litigation and Arbitration Report that in 

many circumstances in States where 

laws provide that a partial payment on 

a time-barred debt revives it, a 

collector’s attempt to collect time-barred 

debt may create a misleading 

impression as to the consequences of 

making such a payment, in violation of 

section 5 of the FTC Act and FDCPA 

section 807. The FTC stated that to 

avoid creating a misleading impression, 

collectors in many circumstances would 

need to disclose clearly and 

prominently to consumers prior to 

requesting or accepting such payments 

that providing a partial payment would 

revive the collector’s ability to sue to 

collect the balance.245 Apart from 

avoiding a misleading impression, 

consumers also may benefit from 

receiving affirmative statements 

regarding the impact of partial payments 

in making decisions about whether to 

pay debts and in what order to pay 

them. Indeed, some State and local 

governments have started requiring 

collectors to disclose similar types of 

information when seeking partial 

payments on time-barred debts both to 

prevent deception and assist consumers 

in making better informed decisions.246

Q135: Is there any data or other 

information indicating how frequently 

time-barred debt is revived by 

consumers’ partial payments? How 

frequently do owners of debts and 

collectors sue to recover on time-barred 

debts that have been revived? 

Q136: Is there any data or other 

information bearing on what consumers 

believe are the consequences for them if 

collectors demand payment on debts 

and they make partial payments? 

Q137: Should the Bureau require debt 

collectors seeking or accepting partial 

payments on time-barred debts to 

include a statement in the validation 

notice that paying revives the collector’s 

right to file an action for a new statute 

of limitations period for the entire 

balance of the debt if that is the case 

under State law? What would be the 

benefits to consumers of receiving such 

disclosure? What would be the costs to 

debt collectors in making such a 

disclosure? How should such a 

disclosure be made to be effective? Are 

there any State or local models that the 

Bureau should consider in developing 

proposed rules concerning disclosures 

and the revival of time-barred debts? 

Q138: Some debts may become time 

barred after collectors have sent 

validation notices to consumers. In this 

case, if a collector is still attempting to 

collect debts after they become time 

barred, should the collector be required 

to disclose information about the debt 

being time-barred, the right of the 

collector to sue, and the effect of making 

partial payment to these consumers, 

and, if so, when and how should it be 

provided? 

Q139: A substantial period of time 

may transpire between the time of the 

first disclosure that debt is time barred 

and of the consequence of making a 

partial payment and subsequent 

collection attempts. Should collectors 

be required to repeat the partial 

payment disclosure during subsequent 

collection attempts? If so, when and 

how often should the disclosure be 

required? 

Q140: How frequently do actions by 

consumers other than partial payment 

(e.g., written confirmation by the 

consumer) revive the ability of debt 

collectors to sue on time-barred debts? 

If so, what other actions trigger the 

revival of time-barred debts? Should 

debt collectors be required to provide 

the same type of disclosures to 

consumers before they take one of these 

actions that they would be required to 

provide in connection with payment on 

a time-barred debt? 

C. Consumer Testing of Time-Barred 

Debt Disclosures 

Some consumer financial services 

statutes and regulations mandate 

specific format and wording 

requirements for disclosures. In other 

cases, to ease compliance, the Bureau 

publishes model forms and model 

clauses that may be used to comply with 

certain disclosure requirements under 

its regulations. The Bureau seeks 

comments concerning developing model 

or standard language and formats for 

disclosures relating to time-barred 

debts. 

Q141: Have industry organizations, 

consumer groups, academics, or 

governmental entities developed model 

time-barred debt notices? Have any of 

these entities or individuals developed 

a model summary of rights under the 

FDCPA or State debt collection laws 

related to time-barred debt? Which of 

these models, if any, should the Bureau 

consider for proposed rules? 

The Bureau plans to conduct 

consumer testing and other research in 

developing content or format 

requirements for any disclosures for 

time-barred debts it may propose, and 

for any model forms or clauses for these 

disclosures it may propose. The Bureau 

believes that testing disclosures with 

consumers would help produce 

disclosures that consumers will be more 

likely to pay attention to, understand, 

and use. The Bureau recognizes that 

industry, academics, or others may have 

already conducted relevant consumer 

testing or other research. 

Q142: Is there consumer testing or 

other research concerning consumer 

understanding or disclosures relating to 

time-barred debts that the Bureau 

should consider? If so, please provide 

any data collected or reports 

summarizing such data. 

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247 15 U.S.C. 1692i(a)(1). 

248 15 U.S.C. 1692i(a)(2). 

249S. Rept. 382, 95th Cong. at 2. 

250See 2010 FTC Litigation and Arbitration 

Report at 12 (noting that consumer groups have 

pointed out the challenges faced by some 

consumers in traveling to court). 

251Calder v. Bull, 3 U.S. 386, 387 (1798). 

252Courts have interpreted the FDCPA as 

prohibiting filing actions in court to collect on timebarred debt where the debt collector knows or 

reasonably should have known that it was time 

barred. See, e.g., Kimber v. Fed. Fin. Corp., 668 F. 

Supp. 1480, 1488–89 (M.D. Ala. 1987). Courts have 

also interpreted the FDCPA as prohibiting collectors 

from making materially false or misleading 

representations in the pleadings, motions, and other 

documents filed in litigation. See, e.g., Washington 

v. Roosen, Varchetti & Oliver, PPLC, 894 F. Supp. 

2d 1015, 1023 (W.D. Mich. 2012) (noting that false 

or misleading statements are prohibited where the 

statement is materially false or misleading to 

violation section 1692e); see also Miller v. Javitch, 

Block & Rathbone, 561 F.3d 588, 596–97 (6th Cir. 

2009). 

253 In its 2010 Litigation and Arbitration Report, 

the FTC also expressed concern about debt 

collectors’ use of arbitration to resolve disputes 

with consumers. 2010 FTC Litigation and 

Arbitration Report at 37–46. After that Report, there 

was an industry self-imposed moratorium on 

collectors’ use of arbitration to resolve debt 

collection claims. Section 1028 of the Dodd-Frank 

Act directs the Bureau to conduct a study and 

submit a report to Congress concerning mandatory, 

pre-dispute arbitration with respect to consumer 

financial products or services, which would include 

debt collection. 

254 2010 FTC Litigation and Arbitration Report at 

iii–iv. 

255Maryland Court of Appeals, Rules Order 

(adopting amendments to Rules 3–306, 3–308 and 

3–509) (Sept. 8, 2011); North Carolina Senate Bill 

974 (signed into law on Sept. 9, 2009). 

256At the FTC–CFPB Roundtable, Christopher 

Koegel (Asst. Dir., Div. of Financial Practices, FTC) 

noted that Delaware, Maryland, and Texas had 

incorporated provisions of the FTC’s earlier 

recommendations into their State’s laws on debt 

collection. Transcript of 2013 FTC–CFPB 

Roundtable at 270. In addition, California, 

Colorado, North Carolina, and Minnesota also have 

enacted new laws regulating debt collection 

litigation. 

VII. Debt Collection Litigation Practices 

This Part of the ANPR seeks comment 

on several aspects of debt collection 

litigation practice and procedure. Part 

VII.A discusses section 811 of the 

FDCPA, which relates to the venue 

requirements for filing debt collection 

actions in State courts. Part VII.B seeks 

comment on a variety of issues related 

to litigation process and procedure. 

A. Venue (Section 811 of the FDCPA) 

Section 811 of the FDCPA specifies 

where a debt collector may file suit and 

mandates that legal action be filed in 

one of three places. In an action to 

enforce an interest in real property 

securing the consumer’s obligation, the 

suit must be filed where the property is 

located.247 Otherwise, the suit must be 

filed in the judicial district in which the 

consumer signed the contract sued upon 

or in the district in which the consumer 

resides at the time of the 

commencement of the suit.248

These restrictions on venue are 

intended to protect consumers by 

preventing them from incurring undue 

costs that could arise if they were 

required to defend themselves in distant 

collection actions.249 Even with these 

restrictions, however, consumer groups 

have stated that the venue alternatives 

may create problems for consumers in 

those States where judicial districts are 

sufficiently large that it can be unduly 

burdensome for indigent consumers to 

travel to distant courthouses.250

Q143: Where do most collectors file 

suit? For example, do collectors usually 

select the place of suit based on a 

consumer’s place of residence or based 

on where a contract was signed? Do 

collectors’ choices of venue differ based 

on the type of debt, the amount of debt, 

or other considerations? 

Q144: Are there any consumer 

protection concerns related to the 

geographic size of judicial districts, and 

if so, where do these problems arise 

specifically? Are States implementing 

any measures to decrease burdens on 

consumers in areas where it may be 

more burdensome for indigent 

consumers to travel to courts that are 

farther away from their places of 

residency? 

Q145: Are there any particular unfair, 

deceptive, or abusive practices related 

to choice of venue that the Bureau 

should address in proposed rules? 

B. State Debt Collection Litigation 

Most debt collection litigation actions 

that collectors file to recover on debts 

are filed in State and local courts. The 

administration of justice and regulation 

of these State and local courts ‘‘on all 

subjects not entrusted to the Federal 

Government, [is] the peculiar and 

exclusive province, and duty of the 

State Legislatures.’’ 251 Despite the 

traditional State role in regulating State 

and local courts, the FDCPA has been 

applied to the actions of debt collectors 

in connection with debt collection 

litigation.252 The Bureau is interested in 

comments concerning how proposed 

rules could protect consumers in debt 

collection litigation without adversely 

affecting the traditional role of the 

States in overseeing the administration 

and operation of their court systems and 

without imposing undue or unnecessary 

burdens on the debt collection process. 

Many of the consumer protection 

issues with regard to debt collection 

litigation involve issues of procedure 

and evidence. As mentioned above, the 

FTC addressed these issues in its 2010 

Litigation and Arbitration Report 253 in 

which it recommended, among other 

things, that: (1) States should consider 

adopting measures to make it more 

likely that consumers would defend 

themselves in litigation, decreasing the 

prevalence of default judgments; and 

(2) States should consider requiring 

collectors to include more information 

about the alleged debt in their 

complaints.254 At the recent FTC–CFPB 

Roundtable discussed above, panelists 

emphasized that a number of States 

have begun to address inadequate 

service of process and improve the 

information that collectors provide to 

consumers before and at the time a 

complaint is filed.255 Some States also 

have adopted or have proposed 

regulations to modify procedures and 

standards for when collectors can obtain 

default judgments.256

The Bureau is interested in receiving 

information about the nature and extent 

of State debt collection litigation 

reforms relating to rules of procedure 

and evidence and standards for proof at 

the time of pleading and application for 

entry of a default judgment. Such 

information will be useful to the Bureau 

in understanding the impact of State 

rules of procedure and evidence on 

consumers who owe or are alleged to 

owe debt and to ensure that the 

proposed debt collection rules 

complement and avoid interfering with 

State rules of procedure and evidence. 

The Bureau is especially interested in 

comments from State courts and other 

State officials on these topics. 

Q146: How many debt collection 

actions do collectors file against 

consumers each year? If the number of 

actions filed has changed over time, 

please explain why. Has the resolution 

of collection actions changed over time? 

For example, are default judgments 

more prevalent than in the past? If cases 

are being resolved for different reasons 

than before, why? 

Q147: Some States have adopted 

requirements for the information that 

must be set forth in debt collection 

complaints, as well as for documents 

(e.g., a copy of the credit contract) that 

must be attached to them. Other States 

have set forth specific requirements for 

the information that collectors must file 

in support of motions for default 

judgment, including adopting standards 

for the information that must be 

included in or attached to supporting 

affidavits and the reliability of the 

information in the affidavits. Should the 

Bureau incorporate into proposed rules 

any requirements to complement or 

avoid interfering with States’ pleading, 

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257At the FTC–CFPB Roundtable, W. Thomas 

Lawrie (AAG, Office of the Maryland Attorney 

General) noted that he has seen multiple cases 

where the ‘‘affiant for the debt buyer [is] robosigning affidavits’’ and ‘‘filing 400, 500, up to say 

900 affidavits a day.’’ Transcript of 2013 FTC–CFPB 

Roundtable at 336. 

258FTC Staff Commentary on FDCPA section 

803(2), comment 2. 

259 15 U.S.C. 1692o. 

260See 12 CFR 1006.1 through 1006.8; 76 FR 

78121 (Dec. 16, 2011). 

261Subpart A of Regulation F contains the rule 

related to State exemptions under the FDCPA. 

Subpart B is reserved for any future rulemaking by 

the Bureau under the FDCPA. 

262Rescission of Rules, 77 FR 22200 (Apr. 13, 

2012). 

263Maine is the only State that has ever sought 

or obtained this exemption. See Exemption from 

Sections 803–812 of the Fair Debt Collection 

Practices Act granted to State of Maine, 60 FR 

66972 (Dec. 27, 1995). 

264Public Law 90–321, sec. 818, as added Public 

Law 109–351, sec. 801(a)(2), 120 Stat. 2004 (2006). 

265 15 U.S.C. 1692p(a)(2)(A). 

266 15 U.S.C. 1692p(a)(2)(B). 

267 15 U.S.C. 1692p(a)(2)(C)(v)(I). 

motions, and supporting documentation 

requirements? 

Under the FDCPA, the Bureau has the 

authority to issue rules prohibiting debt 

collectors from using ‘‘false, deceptive, 

or misleading representation or means 

in connection with the collection of any 

debt’’ or ‘‘unfair or unconscionable 

means to collect or attempt to collect 

any debt.’’ The Bureau also has the 

authority under the Dodd-Frank Act to 

prohibit unfair, deceptive, or abusive 

acts and practices in collecting on debts 

arising from consumer credit 

transactions. Concerns have been raised 

that some collectors may make unfair or 

deceptive claims about consumer 

indebtedness in the pleadings, motions, 

and related documents (usually 

affidavits) that they file in State debt 

collection litigation.257

Q148: What types of deceptive claims 

are made in pleadings, motions, and 

documentation filed in debt collection 

litigation? How common are such 

deceptive claims? For example, how 

frequently do collectors make the false 

claim that they have properly served 

consumers? 

Q149: What specific documentation 

or information do collectors have or 

provide in State courts to support 

claims that (1) the creditor has the right 

to collect on debts; (2) the consumer 

owes the debt; and (3) the consumer 

owes the debt in the amount claimed? 

Q150: The FTC’s Staff Commentary to 

section 803 excludes from the definition 

of ‘‘communication’’ ‘‘formal legal 

actions,’’ like the filing of a lawsuit or 

other petition/pleadings with a court, as 

well as the service of a complaint or 

other legal papers in connection with a 

lawsuit, or activities directly related to 

such service.258 Should the Bureau 

address communications in formal legal 

actions in proposed rules? If so, how? 

Q151: Are there any other acts and 

practices in debt collection litigation 

that the Bureau should address in a 

proposed rule? For each type of act or 

practice, how prevalent is it, what harm 

does it cause to consumers, and how 

could the Bureau address it in proposed 

rules in a manner that complements and 

that is not inconsistent with State law? 

VIII. State and Local Debt Collection 

Systems (Sections 817 and 818 of the 

FDCPA) 

A. Exemption for State Regulation 

(Section 817 of the FDCPA) 

Section 817 of the FDCPA provides 

that the Bureau ‘‘shall by regulation 

exempt from the requirements of this 

subchapter any class of debt collection 

practices within any State if the Bureau 

determines that under the law of that 

State that class of debt collection 

practices is subject to requirements 

substantially similar to those imposed 

by this subchapter, and that there is 

adequate provision for enforcement.’’ 259

Prior to July 21, 2011, the FDCPA 

permitted the FTC to grant such 

exemptions, and the FTC set forth 

procedures in 16 CFR Part 901 that 

States could use to apply for the 

exemption. 

The Dodd-Frank Act transferred 

rulemaking authority related to the State 

exemptions under the FDCPA to the 

Bureau. On December 16, 2011, the 

Bureau published an interim final rule 

under Regulation F to establish 

procedures and criteria whereby States 

may apply to the Bureau for exemption 

of a class of debt collection practices 

within the applying State from the 

provisions of the FDCPA.260 Regulation 

F substantially duplicated the FTC’s 

rule related to State exemptions under 

the FDCPA, making only certain nonsubstantive, technical, formatting, and 

stylistic changes.261 Accordingly, the 

FTC has rescinded its rule.262

The Bureau solicits comment as to 

whether it should revise the procedures 

and criteria that States must use to 

apply to the Bureau for exemption of a 

class of debt collection practices from 

the provisions of the FDCPA.263

Q152: Do the procedures and criteria 

set forth in sections 1006.1 through 

1006.8 of Regulation F adequately 

enable States to apply for exemption? 

Are there any specific revisions to the 

procedures or criteria set forth in 

sections 1006.1 through 1006.8 of 

Regulation F that the Bureau should 

consider? 

B. Exception for Certain Bad Check 

Enforcement Programs Operated by 

Private Entities (Section 818 of the 

FDCPA) 

In 2006, Congress amended the 

FDCPA and added a new exception 

under section 818 for certain bad check 

enforcement programs operated by 

private parties acting pursuant to 

contracts with a State or a district 

attorney.264 Under the exception, a 

private entity is excluded from the 

definition of ‘‘debt collector’’ under the 

FDCPA only if: (1) A State or district 

attorney has established a pretrial 

diversion program for alleged bad check 

offenders who agree to participate 

voluntarily in such programs to avoid 

criminal prosecution; 265 (2) the private 

entity that operates the pretrial 

diversion program is ‘‘subject to an 

administrative services support contract 

with a State or district attorney’’ and 

‘‘operates under the direction, 

supervision, and control of such State or 

district attorney’’; 266 and (3) the private 

entity conducts its operations consistent 

with the specific requirements set forth 

in section 818(a)(2)(C) of the FDCPA. 

Consumer groups have expressed 

concern that some of the entities may 

not be fulfilling the conditions 

necessary to be excluded from the 

definition of ‘‘debt collector,’’ and, 

therefore, that the entities should be 

subject to the FDCPA. For example, 

some consumer groups have suggested 

that entities may not be including a 

‘‘clear and conspicuous statement’’ that 

the consumer may dispute the validity 

of the alleged bad check violation.267

Q153: How prevalent are bad check 

pretrial diversion programs? 

Q154: What provisions typically are 

included in the ‘‘administrative support 

services contracts’’ between private 

entities operating bad check pretrial 

diversion programs and State or district 

attorneys? Are these contracts available 

to the public? Should the Bureau define 

‘‘administrative support services 

contracts’’ in proposed rules or specify 

in such rules what types of provisions 

must be included for contracts to meet 

the definition? Why or why not? 

Q155: What do State or district 

attorneys usually do to ensure that the 

private entities that operate bad check 

pretrial diversion programs are subject 

to their ‘‘direction, supervision, and 

control’’? Should the Bureau specify in 

proposed rules what State or district 

attorneys must do to direct, supervise, 

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Federal Register / Vol. 78, No. 218 / Tuesday, November 12, 2013 / Proposed Rules 67879 

268 15 U.S.C. 1692p(a)(2)(C)(v). 

269Examples of States with some type of licensing 

or registration requirement include Alaska, 

Delaware, Florida, Louisiana, Maine, Maryland, 

Massachusetts, Minnesota, Nevada, New Mexico, 

North Carolina, North Dakota, Oregon, Tennessee, 

Utah, Washington, West Virginia, and Wyoming. 

270See Alaska Application, available at http://

commerce.alaska.gov/dnn/portals/5/pub/

coa4106.pdf. 

271Robert Hunt, Fed. Reserve Bank of Pa., 

Understanding the Model: The Life Cycle of a Debt 

at 10 (2013), available at http://www.ftc.gov/bcp/

workshops/lifeofadebt/UnderstandingTheModel.pdf 

(presented at the FTC–CFPB Roundtable). 272The registration provision excludes ‘‘an 

insured depository institution, insured credit 

union, or related person.’’ Section 1022(c)(7) of the 

Dodd-Frank Act, 12 U.S.C. 5512(c)(7). 273For example, some State banking agencies 

(including those in Massachusetts, Oklahoma, 

Rhode Island, Vermont, and Washington) are using 

the system to manage licensing for a variety of nondepository financial services industries. See Press 

Release, Conf. of State Bank Supervisors, State 

Regulators Expand Use of NMLS to Include 

Additional Non-Depository Industries (Apr. 16, 

2012), available at http://www.csbs.org/news/pressreleases/pr2012/Pages/pr-041612.aspx. 

274Transcript of 2013 FTC–CFPB Roundtable at 

208–09. 

275See 12 CFR 1002.12 and 1026.25; Transcript 

of 2013 FTC–CFPB Roundtable at 208–10. 

276See 15 U.S.C. 1681c; Transcript of 2013 FTC– 

CFPB Roundtable at 208. 

277Transcript of 2013 FTC–CFPB Roundtable at 

208; see section 813(d) of the FDCPA, 15 U.S.C. 

692k(d) (‘‘An action to enforce any liability created 

by this subchapter may be brought in any 

appropriate United States district court without 

regard to the amount in controversy, or in any other 

court of competent jurisdiction, within one year 

from the date on which the violation occurs.’’) 

and control the private entities that 

operate bad check pretrial diversion 

programs in order for these programs to 

be excluded from the FDCPA? If so, 

what should be required? 

Q156: One of the specific 

requirements in section 818(2)(C) of the 

FDCPA is that in their initial written 

communication with consumers the 

private entities operating bad check 

diversion programs must provide a 

‘‘clear and conspicuous’’ statement of 

the consumers’ rights.268 How do 

private entities currently disclose this 

information? Should the Bureau specify 

in proposed rules what constitutes a 

‘‘clear and conspicuous statement’’ of 

these rights? If so, what standards 

should be included? 

Q157: Private entities operating bad 

check pretrial diversion programs that 

meet the conditions set forth in section 

818 are exempt from the FDCPA. Where 

these private entities are subject to title 

X of the Dodd-Frank Act, should the 

Bureau exempt these entities from title 

X of the Dodd-Frank Act and any 

implementing regulations? 

Q158: Are there any other aspects of 

bad check pretrial diversion programs 

that the Bureau should address in a 

proposed rule? To the extent 

commenters have concerns about acts or 

practices involving these programs, 

describe how prevalent the practice is 

and what harm it causes to consumers? 

IX. Recordkeeping, Monitoring, and 

Compliance Requirements 

A. Federal Registration of Debt 

Collectors 

A number of States require the 

licensing or registration of debt 

collectors that operate in their State.269

Although the procedures in each State 

differ, many States require that the 

collector file a certificate with the State 

that includes the name of the collection 

business, as well as the mailing and 

physical address of the business. States 

may also require a listing of individual 

branch offices, and all employees who 

operate in the State.270

In 2010, there were more than 4,000 

third-party debt collection firms that 

employed more than 140,000 people.271

Given the sheer number of debt 

collectors, the fact that not all States 

have licensing or registration programs, 

and that registration information may 

not be shared among States, debt 

collection firms or individuals engaged 

in debt collection may commit an 

unlawful act in one State, leave the 

jurisdiction, and then commence 

operations in another State. 

Section 1022(c)(7) of the Dodd-Frank 

Act provides the Bureau with the 

authority to ‘‘prescribe rules regarding 

the registration requirements applicable 

to a covered person,’’ subject to limited 

exceptions.272 Such a registration 

system could apply to many collection 

firms and individual collectors. 

Q159: Should the Bureau propose 

rules to require debt collectors to 

register? Should any such registration 

system be used to register individual 

debt collectors, debt collection firms, or 

both? What information should be 

required for registration, and are there 

any particular State models that the 

Bureau should consider? Are there data 

on how consumers have benefitted from 

similar systems now operating in States? 

Are there data on the costs imposed on 

collectors by registration? How could a 

registration system be structured to 

minimize the cost of registration for 

debt collectors, while still providing 

adequate information for those who use 

the registration system? 

Q160: The Nationwide Mortgage 

Licensing System and Registry 

(‘‘NMLSR’’), which was originally used 

by State regulators for the registry of 

mortgage loan originators, is 

increasingly being used as a broader 

licensing platform, including for the 

registration of debt collectors.273 Would 

it be desirable for NMLSR to expand or 

for some other existing platform to be 

used to create a nationwide system for 

registering debt collectors rather than 

having the Bureau create such a system? 

What could the Bureau do to facilitate 

the sharing of information among 

regulators who are part of the NMLSR 

or other nationwide system to safeguard 

confidentiality and protect privileged 

information? 

B. Recordkeeping Requirements 

At the FTC–CFPB Roundtable, several 

panelists stated that recordkeeping 

requirements should be added to the 

FDCPA.274 The FDCPA does not 

currently contain specific record 

retention requirements, though debt 

owners, who also function as creditors 

or mortgage originators, may be subject 

to record retention requirements under 

other statutes and regulations, such as 

TILA or the Equal Credit Opportunity 

Act and the Bureau’s implementing 

rules.275 Some Roundtable participants 

proposed that an FDCPA recordkeeping 

requirement should be coextensive with 

the length of time a debt can appear on 

a consumer report before it must be 

deleted as obsolete under the FCRA 

(generally seven years, with some 

exceptions).276 Others have suggested 

that a recordkeeping requirement 

should be coextensive with the one-year 

statute of limitations for private actions 

under the FDCPA, which begins to run 

from the time of the FDCPA 

violation.277 Another alternative would 

be to use the longer of these two 

periods. 

Q161: What records do creditors and 

collectors currently retain relating to 

debts in collection? Should proposed 

rules impose record retention 

requirements in connection with debt 

collection activities? If so, what 

requirements should be imposed and 

who should have to comply with them? 

What would be the costs and benefits of 

these requirements? 

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67880 Federal Register / Vol. 78, No. 218 / Tuesday, November 12, 2013 / Proposed Rules 

Q162: How long do creditors and debt 

collectors currently retain records, and 

how does it differ based on the type of 

debt or type of record? Should the 

length of time that debt collection 

records are retained relate to how long 

a debt may generally be reported in a 

consumer report, how long a collector 

may collect upon the debt, or how long 

a consumer has to bring private action 

under the FDCPA? Or is another time 

period more appropriate? 

Dated: November 5, 2013. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2013–26875 Filed 11–8–13; 8:45 am] 

BILLING CODE 4810–AM–P 

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