Black Knight: Preparing the Fair Debt Collection Practices Act

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Black Knight Offers Informative White Paper and MSP® Maintenance System Enhancements to Help Customers Prepare

New debt collection regulations are on the horizon and will impact the collection practices of Black Knight clients who qualify as “debt collectors” under the new Consumer Financial Protection Bureau (CFPB) rules. ). The CFPB recently proposed changes to Reg F (12 CFR §1006), which implements the Fair Debt Collection Practices Act (FDCPA) originally established in 1977 by Congress. The FDCPA establishes specific consumer protections to regulate communications between debt collectors and consumers. Harassment or abuse, false or misleading statements and unfair practices are prohibited.

On November 30, 2021, two new rules will come into effect: the November 2020 Debt Collection Rule and the January 2021 Debt Collection Rule. Black Knight is currently working with MSP® Loan Management System clients to leverage both existing features and new enhancements to prepare for the new FDCPA rules.

About the FDCPA rules

The November 2020 Debt Collection Rule

This rule indicates how, when and where debt collectors can communicate with consumers about collecting their debts.

  • This rule gives consumers the ability to control HOW the debt collector communicateswith them and what forms of media they can and cannot use to communicate.
  • The November Rule further addresses WHEN the debt collector can communicate with consumers. It prohibits a debt collector from communicating with a consumer in connection with the collection of any debt at any “unusual time,or a moment that “the debt collector knows he is inconvenient for the consumer”.
  • The rule also prohibits debt collectors from repeatedly making phone calls with the intent to annoy, abuse or harass. It limits calls per account to seven calls made in seven consecutive calendar days.
  • The November Rule continues by addressing O the debt collector can communicate with the consumer. The rule prohibits the debt collector from communicating or attempting to communicate with a consumer at any “unusual place,or somewhere that “the debt collector knows or should know is troublesome.”
  • Finally, the November rules state that if a consumer notifies a debt collector in writing that he refuses to pay a debt or if the consumer requests that the debt collector cease all communication, the debt collector must stop all further communication with the debt collector. the consumer, with certain exceptions.

The January 2021 debt collection rule

January 2021 debt collection rule requires debt collectors to provide consumers with oral or written information validationdebt information and an explanation of consumer rights. It also identifies steps that must be taken before a debt collector can report information to credit bureaus and prohibits prosecution of prescribed debts.

  • During the validation period, this rule requires that a debt collector not engage in any collection activity or communication that overshadows or is inconsistent with the disclosure of the consumer’s rights to dispute the debt and to request the name and address of the original creditor.
  • For the first time, the January rule addresses “passive collection” to include credit report. Before a debt collector can provide information to a consumer reporting agency, they must speak to the consumer about the debt in person or by phone OR by mail or deliver a letter to the consumer electronically.
  • Finally, the January rule states that debt collectors must keep recordswhich constitute proof of compliance or non-compliance with FDCPA rules. These records must begin on the date the debt collector begins collection activity on a debt up to three years after the last collection activity of the debt collector on the debt. Departments that record collection calls must keep the records for three years after the date of the call.

How Can Mortgage Agents Prepare?

Black Knight is working with its MSP Loan Management System clients and improving the platform to support the new FDCPA rules. We have also developed an informative white paper with detailed steps to guide service agents in the preparatory efforts. We encourage our service clients to review their debt collection processes and systems to make the necessary updates to support FDCPA compliance. The CFPB said being “unprepared is unacceptable”, so it is important to be ready when the new rules are established to avoid financial penalties and negative publicity for non-compliance.

Download Black Knight’s Complimentary White paper: Prepare Now for the Fair Debt Collection Practices Act

If you need help preparing for the new FDCPA rules, contact Black Knight.

Disclaimer

Dark Knight Inc. published this content on September 07, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on 07 September 2021 20:51:09 UTC.


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