Compliance Weekly is an insideARM newsletter that covers all aspects of industry compliance—from questions to best practices to pitfalls to avoid. The article below, which discusses the 7-in-7 call cap analysis and when a d/b/a will be needed under the CFPB's final debt collection rule, originally appeared in Compliance Weekly earlier this month. If you're not a subscriber, become one now!
Is the 7-in-7 Per Phone Number, Per Debt, or Just a Delicious Drink?
I have read through the new rules and been involved in a few webinars. My question is about calling multiple numbers, I understand that if they have separate accounts they could be getting several calls a week. I haven't seen anything about if they have multiple phone numbers, if we are calling several numbers on an account do those calls apply to the seven times? Also if we do not speak with the consumer does the seven times start over the next week?
The first time call frequency appears in the Final Rule is on page 4: "Clarifies that a debt collector is presumed to violate the FDCPA’s prohibition on repeated or continuous telephone calls if the debt collector places a telephone call to a person more than seven times within a seven-day period or within seven days after engaging in a telephone conversation with the person. It also clarifies that a debt collector is presumed to comply with that prohibition if the debt collector places a telephone call not in excess of either of those telephone call frequencies. The final rule also provides non-exhaustive lists of factors that may be used to rebut the presumption of compliance or of a violation."
This is where we get our "7-in-7" concept. You can contact a consumer about 1 debt 7 times in 7 days. And it's the "1 debt" that's key here. Phone numbers do not matter; how many debts your agency has for the consumer does.
The CFPB uses the term "particular debt." We see that in action here, on page 634:
"1. Particular debt. Section 1006.14(b)(2) establishes presumptions of compliance and violation with respect to § 1006.14(b)(1) and FDCPA section 806(5) (15 U.S.C. 1692d(5)) based on the frequency with which a debt collector places telephone calls to, or engages in telephone conversation with, a person in connection with the collection of a particular debt. Section 1006.14(b)(4) provides that, except in the case of student loan debt, the term particular debt means each of a consumer’s debts in collection. For student loan debt, § 1006.14(b)(4) provides that the term particular debt means all student loan debts that a consumer owes or allegedly owes that were serviced under a single account number at the time the debts were obtained by a debt collector." (The bolding is mine, for emphasis.)
The CFPB further clarifies on page 635 that "if a debt collector places a telephone call to a person and initiates a conversation or leaves a voicemail about one particular debt, the debt collector counts the telephone call as a telephone call in connection with the collection of the particular debt." (Emphasis mine.)
The CFPB also says, on page 635, that "If a debt collector places a telephone call to a person and initiates a conversation or leaves a voicemail about more than one particular debt, the debt collector counts the telephone call as a telephone call in connection with the collection of each such particular debt." (Emphasis mine.)
The final piece of the puzzle is also on page 635: "If a debt collector places a telephone call to a person but neither initiates a conversation about a particular debt nor leaves a voicemail that refers to a particular debt, or if the debt collector’s telephone call is unanswered, the debt collector counts the telephone call as a telephone call in connection with the collection of at least one particular debt." (Emphasis mine.)
A suggestion from my best friend and colleague, Katie Neill, is this: "What you can do today depends on what you did in the past 6 days. Looking back is safer from a compliance point of view."
Here are some hypotheticals that addresses how each of the above three paragraphs are activated:
1) Mike Bevel is a consumer with one (1) debt, a credit card debt, that is placed with Advantage Recoverables, a collection agency. The file that Advantage Recovery received from the creditor has two phone numbers for Mike Bevel. This does not mean that each of those phone numbers allows Advantage Recovery 7 attempts at contact each (for a total of 14 contact attempts on this single debt); it just means that Advantage Recovery can attempt to contact Mike Bevel 7 times in 7 days on that particular debt. Within a rolling 7-day period, Advantage gets to attempt to contact Mike Bevel, using any combination of phone numbers Mike Bevel has on their file, 7 times. Once you've reached Mike Bevel -- made contact and spoken to them about their debt, then you don't get to call them again for 7 days from the day you made contact unless asked to by the consumer or unless the consumer calls you back.
2) Mike Bevel is a consumer with two (2) debts, a credit card debt and a utility bill debt, that are placed with Advantage Recoverables, a collection agency. Within a rolling 7-day period, Advantage gets to attempt to contact Mike Bevel, using any combination of phone numbers Mike Bevel has on their file, 7 times per each debt. If you call Mike Bevel on Monday about their credit card debt, and then call Mike Bevel on Tuesday about their utility bill debt, that does not mean you've used 2 of your 7 attempts; it means you've used 1 attempt each for each debt. This is the same as if you had called Mike Bevel and spoke to them about both their debts on the same call. Once you've reached Mike Bevel -- made contact and spoken to them about their debt, then you don't get to call them again for 7 days from the day you made contact unless asked to by the consumer or unless the consumer calls you back. If you make attempts to call Mike Bevel and get their answering machine, or they don't pick up at all, then you can count that as only 1 attempt on 1 of the 2 debts.
The Final Rule gives similar examples on pages 636-639, but for some reason the CFPB decided to use medical debt as one of the debts in their examples. And I don't think any collection agency, for HIPAA reasons, would attempt to discuss a consumer's credit card debt and their medical debt on the same call.
Finally, you ask, "If we do not speak with the consumer does the seven times start over the next week?" Since this is a rolling 7 days, you're really looking backwards. Each day you don't make contact is, in a sense, a re-tolling of the 7 days.
If you try me on Monday, and I don't answer, and you try me on Tuesday, and I don't answer, and then you try me on Wednesday, and I answer, THEN you have made your contact, you've talked to me about the debt(s), and you cannot call me again for 7 days from that Wednesday unless I ask you to, or if I call back. (If I call back, the date of the call-back re-tolls the 7 days.)
(How'd I do? Did I get it right? Do you disagree? PLEASE LET ME KNOW.)
This Winter, the Hot New Look is a D/B/A
Just a heads up that if the name of your collection agency says that you're a collection agency -- Apex Predatory Collections, say; or, even, Apex Predatory Receivables -- you will want to make sure you have a licensed d/b/a name, too.
Doing Business As. This allows a company to have one name for business purposes -- taxes and the like -- and another name that, in this case, can be consumer-friendly without risking third-party disclosure.
Where is this?
Throughout the Final Rule, and especially within the context of the Limited Content Message. Like, for instance, this, on page 61:
§ 1006.2(j)(1)(i) requires that the business name included in a limited-content message not reveal that a debt collector is in the debt collection business.
The rule seems to explicitly affect any collection agency with the word Collection or Collections or Collectors as part of the business name. (If you're a peddler in old-timey erotica or something weird like stamps, you're fine. I mean, you're not? But you're fine as far as the Final Rule goes.)
However, when the CFPB hauls out an example of a business name that would disclose that the primary function of the business is debt collection, it uses "credit card receivables group" as the example. (See page 76 of the Final Rule.)
So it would seem Receivables is out of the question if you're primary business is the collection of consumer debt. (If your business is just receiving things, like hugs, chain letters, or accounts of hauntings WHICH IS MY BUSINESS BY THE WAY, you're fine. Please send me any stories you have about any hauntings that have happened to you/you know of.)
Most larger agencies are already all over this. Some of my smaller market participants may not have taken this step, and it is with this spirit of sharing and caution that I urge you to do so.