New Fair Debt Collection Practices Act (FDCPA) rules effective November 30, 2021

As the country continues to deal with the economic impact of the pandemic, it is important for attorneys handling FDCPA claims to be aware of recent developments in the rules and case law.

Two final rules impacting debt collection communications are now effective. The Consumer Financial Protection Bureau (CFPB) previously proposed an extension to January of 2022, but public comment indicated stakeholders would be ready to comply with the November 30, 2021 date.

The first rule, finalized in October 2020, clarifies the Act’s prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors through telephone, email, texting, and other communications. The second rule, finalized in December 2020, clarifies the disclosures debt collectors must provide to consumers and prohibits debt collectors from suing or threatening to sue on time-barred debt. The CFPB has several resources addressing compliance on its website.

These changes come on the heels of recent cases addressing the required standing to bring a claim under the FDCPA. (See TransUnion v. Ramirez, 141 S. Ct. 2190 (2021) and Ward v. National Patient Account Services Solutions, Inc., No. 20-5902, 2021 WL 3616067, — F.4th — (6th Cir. Aug. 16, 2021)). The cases, which analyzed FDCPA claims under the old rules, discuss what circumstances rise to the level of concrete harm necessary for one to have standing to bring a claim. Standing requires “more than a bare procedural violation of the FDCPA” and more than the risk of future harm. See Ward. Instead, “plaintiffs must demonstrate that the risk of future harm materialized or that the plaintiffs were independently harmed by their exposure to the risk itself.” Id. at *5 (internal citations omitted).

Failing to follow the correct, current procedures can open lawyers up to malpractice liability. Lawyers handling FDCPA claims can manage their risk by familiarizing themselves with the CFPB resources and reviewing recent case law in the applicable jurisdiction. We anticipate bringing you more detail on these FDCPA developments as the new rules and case law evolves. Stay tuned!