On October 30, 2020, the CFPB published its years-in-the-making amendment to Regulation F (“the Rules”) to implement the FDCPA. These rules address many topics, including email and text message communications, time, place and matter communication restrictions, record retention requirements, and the long-awaited solution to the infamous Foti problem - voicemail messages. But is the CFPB’s solution to the voicemail problem really a solution for companies whose name suggests they are in the debt collection business?
In response to overwhelming industry support for a legal fix, the CFPB offered a solution to the age-old Foti problem for debt collectors. (As a refresher, the problem is this: what can a debt collector say on a voicemail without violating the FDCPA’s requirement to provide certain disclosures to consumers while at the same time complying with the FDCPA’s prohibition on unauthorized third party disclosure in the event someone other than the consumer hears the message?) The CFPB’s solution is a newly birthed creature named the “limited content message.”
The Rules define a “limited content message” as a voicemail message for a consumer which contains:
- The business name for the debt collector (so long as the name does not indicate the company is in the debt collection business)
- A request that the consumer reply to the message
- The name of one or more natural persons whim the consumer can contact to reply to the message
- A telephone number(s) that the consumer can use to reply to the message
In addition, the message may include the following:
- A salutation
- The date and time of the message
- Suggested dates and times for the consumer to reply to the message
- A statement that if the consumer replies, the consumer may speak to any of the company’s representatives or associates.
If a voicemail message left by a debt collector for a consumer contains the required items (1 through 4) and any or all of the allowed items (5 through 8) AND NOTHING ELSE, the message will not be considered a “communication” under the law and the debt collector will not be in violation of third party disclosure prohibitions if a third-party hears it or for failing to disclose that the call is from a debt collector. To take advantage of this provision, the debt collector may not identify the consumer or reference any “account.”
The CFPB provided sample messages as follows:
This is Robin Smith calling from ABC Inc. Please call me or Jim Johnson at 1-800-555-1212.
Hi. This is Robin Smith calling from ABC, Inc. It is 4:15 PM on Wednesday, September 1. Please contact me or any of our representatives at 1-800-555-1212 today until 6:00 PM or any weekday from 8:00 AM to 6:00 PM Eastern time.
The limited content message sounds like a good solution, but what if your company name indicates the company is in the debt collection business? The Bureau attempts to answer this question, but falls short of appreciating the full impact of its suggestion. Recognizing the problem faced by companies whose name reveals their debt collection purpose, the Bureau suggests those debt collectors could adopt a doing-business-as name – d/b/a – which does not reveal their business function as debt collection. This sounds simple – but it is not.
Changing your company’s name or adopting a d/b/a is quite involved and would require a debt collector to change a great many aspects of their consumer-facing business. From letters, to messages, to scripting, to credit reporting, changing the corporate name or adopting a d/b/a would require the debt collector to effectively change its consumer-facing identity. In addition, doing-business-as names are required to be registered in many jurisdictions. Adopting a d/b/a also bears licensing implications. Many states which required collectors to be licensed prohibit those licensees from using a name other than the name appearing on their license to engage in regulated collection behavior. As a result, having your licensing regulator approve a d/b/a would be an additional hurdle a collector must overcome to avoid using their debt-collection-revealing corporate name. The difficulties do not end here.
How do you know if your corporate name indicates that the company is in the debt collection business? And, by what legal standard will that question be answered? The Rules remain silent on the answers to these important questions. For most company names, applying the rule is not difficult – ABC Collection Agency, Inc., Consumer Account Collections, LLC, Debt Recovery Corporation – these names, even to the least sophisticated consumer, could reasonably indicate that the companies are in the debt collection business. At the opposite extreme, names like Zephyr, Inc., Atrium International, LLC, or Black Rock Industries Corporation convey not even the slightest indication about the nature of the business conducted by each. But, what about names like Account Solutions, Inc., Recovery Specialists, LLC, Financial Solutions Corp., Credit Alliance, LLC, Creditors Protection Group, Inc.? Do these names indicate the nature of these businesses as debt collection? Is the least sophisticated consumer the benchmark for answering this question? The Bureau offers no answers to these difficult questions.
Big deal – so what if a company is wrong about whether its name reveals its business as debt collection? What are the real consequences of answering the question incorrectly? The answer to this question is clear – the message left by a debt collector whose name reveals its business as debt collection will not be considered a Limited Content Message under the Rules and will therefore not bear the protection provided by the rule to debt collectors who leave Limited Content Messages. Effectively, new rules provide no solution to the Foti problem for those debt collectors.
In the end, debt collectors need to answer some difficult questions, not just about compliance, but about the business of leaving messages. Why leave messages at all? The answer to this question is not found in any government rule, but instead lies in the data already in the possession of every debt collector. Wise debt collectors will analyze their call data very carefully for call back rates, right party contacts, minutes spent paying high cost labor to speak to machines, and a host of other metrics to make the right business decision about whether to leave messages, including the Limited Content Message.