As we have mentioned for several months now, the CFPB’s new rules that affectively clarify or change some of the rules initiated in The Fair Debt Collection Practices Act (FDCPA; March 1978), will go into effect this November, 2021. With these rules, most of which will be up to third-party collection agencies to adopt into their practices, come some items that will require their clients to hand over more information on their patients and consumers in their placement files.
For instance the safe harbor validation letter (B-1 Model Form for Validation Notice) includes a required itemization for consumer/patient bills that include breakdowns of the charges, any fees, interest, payments made, etc. This is a departure from the “rolled-up” amount due that is currently featured on most letters sent to consumers. This information must be coordinated with your agency in order to comply with this notice that essentially gives them and your organization the peace of mind that they will not be sued for the innocuous and frivolous reasons that have come to define the lawsuits plaguing the industry over the last decade.
In addition to this, you will notice that the form makes disputing the debt the most obvious option (even over paying it!). In an article published by Cornerstone Support, this idea is even confirmed, "In fact, the CFPB is adamant that payment is of secondary concern in the validation notice." This is going to require organizations that place debts with third-parties to help agencies answer many more disputes from their patients and customers than they currently do now. In fact, it may even be wise to start including the original bills with placements in order to quell what will surely be a major influx of new disputes. Presenting a copy of the original bill or invoice is often the only way to definitively reject any abstract dispute or objection to the amount owed.
Next on the list of options for consumers (and still before the option to pay), is to request the name and address of the original creditor. In most cases that will be your organization and your organization will be listed as the creditor, but how many of us think that this will prevent many consumers from needlessly (or with contempt) selecting that option?
In the world of debt collection it’s, “be careful what you wish for” and here we are. A safe harbor letter is something the industry begged for, but once again, the end result is going to lead to more frivolous actions, this time on the part of the consumers who will be spinning our wheels and buying themselves time.
The B-1 Model Form for Validation Notices provided by the CFPB. Click to enlarge.
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