CFPB bulletin reminds agencies about authorizations
The CFPB issued a compliance bulletin reminding businesses, including, debt collection agencies, mortgage servicing, and student loan servicing companies, of these requirements:
- Obtain prior authorization before initiating recurring auto debits from a consumers’ account.
- Provide consumers with an easy to understand copy of the terms of authorization.
- The Authorization can only be obtained through written, signed, or a similarly authenticated method (a wet signature).
- Phone authorizations are allowed if using an identifying PIN to log in or the verbal authorization is recorded. (NACHA and VISA have not approved phone authorizations)
- Key Terms of the recurring payments, such as dates and amounts, need to be on the authorization.
In addition, the CFPB is providing information to consumers on how to revoke authorizations.
For additional information on the CFPB reminders, please see this article: