A Closer Look: Validation End Date, Email and Digital Communications

A Closer Look: Validation End Date, Email and Digital Communications

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The comment period for the CFPB’s Notice of Proposed Rulemaking (NPR) is closing soon. Now is the time for debt collection industry professionals to take action. The only way to let the Bureau know what collectors are excited about (and what areas need more consideration) is to file comments before time is up.

Many debt collectors are looking to industry experts and vendors to lead the way. However, it’s important for each agency to have a working understanding of what the NPR has outlined and how it will impact you. Here are some areas that deserve a closer look:

  1. Validation End Date
  2. Email vs Esign Consent
  3. Digital Communications
A Closer Look: Validation End Date, Email and Digital Communications

Above: additional items (aside from validation end date) also mandated by the proposed new rule to be included on a validation notice.

Validation End Date

With the new rule, the Bureau has tried to clarify how to calculate the validation period end date and accurately report it to consumers. The aim, as with many other sections of the NPR, is to simplify communication between collectors and consumers.

However, agencies should be aware – this topic is more complicated than it may seem at first. Consider:     

  • Will this still confuse consumers or cause violations? If a consumer mails their dispute within the window, but it isn’t received by the collector until after the end date, this can pose a problem. There is a chance an agent might begin collecting while the dispute is in the mail, violating the rule to halt collection during a dispute. 
  • How will electronic delivery work? Digital communication doesn’t guarantee delivery at the same rates a paper letter does. Spam, firewalls and blocked text messages are all ways a validation notice could fail reaching a consumer (without an agency even knowing). 
  • Could this lead to legal action? The CFPB states agencies are allowed to accept disputes outside of the validation window in order to better serve consumers. However, adding an end date that your agency doesn’t necessarily adhere to for accepting disputes could send conflicting messages that cause a consumer to sue.
A Closer Look: Validation End Date, Email and Digital Communications

Email vs E-Sign Consent

The NPR intends to allow debt collectors to use new technologies like email and text messaging. This is a long-overdue stance for the industry. However, electronic communication does add extra considerations to the process. 

  • There’s more than one type of consent. Sending disclosures is considered different than other simple email communications with consumers. Because of this, there are different types of consent required for each. Research the difference between email and E-Sign consent to prepare for full compliance when the rule is finalized.
  • Be careful communicating with a consumer’s work email. As with consents, there is a distinction between a consumer receiving disclosures at work (which is a one-time act) and consumers asking for other communication through their work email addresses. Assuming one of these implies the other action is acceptable may get you into trouble. 
  • Consent and opt-out concerns. E-Sign consent can get even more complicated if a consumer opted out of communication through creditors or other collectors before their account was passed to your agency. Take a close look at what processes you will need to have in place to ensure you obtain the proper consents before your own communications with consumers.

How Digital Communication Will Fit Into Your Agency

Allowing digital communication technologies is a big step forward for the industry. But it’s going to take some careful planning to make the pivot from paper letters and phone calls to email and text messaging. How should you decide how these new technologies will fit into your daily operations?

  • Brand identity. The NPR will standardize many aspects of agency operation. You can still convey your brand identity, however, by partnering with software vendors who share your vision and message. 
  • Working groups. Creating a working group in your agency is the best way to pinpoint what areas of the rule will impact your current policies and procedures. Your working group should be able to help you decide what technologies will be best for your agency and how you will need to begin implementation to adhere with the NPR.   

Are you interested in using email and text for communications and payments? Contact PDCflow to discuss your current needs and how we can support your goals when the NPR becomes final.


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