A new type of form comment on the Consumer Financial Protection Bureau’s proposed debt collection rule popped up yesterday from representatives in the credit and collection industry, and this one is taking a much more aggressive approach. It also appears as though all of the comments were from employees of the same company.
More than 30 of the comments were published yesterday, and the thrust of the comments is to persuade the CFPB not to alter the proposed call cap limit from seven calls per account per week and to keep the CFPB from imposing a limit on the number of emails, text messages, and voicemails that collectors can use in trying to get in touch with individuals. A quick search on LinkedIn of the individuals who chose to include their names with their comments shows that many of the comments are tied to individuals who all work at Encore Capital Group or units of the credit and collection industry giant.
To date, about 2,000 comments have been filed, and they have largely come in two different forms — consumer advocacy groups that are using forms and templates for consumers to express their disappointment with the rules and representatives from the credit and collection industry using forms and templates to tell the CFPB they support the proposed rule and nothing should be changed.
The new comments all start pretty much the same way:
I have proudly worked in the credit and collections industry for five years, and I am writing to comment on the CFPBs proposed rules regarding caps to debt collection calls. I am also writing to urge the CFPB to ensure that emails and texts are not subject to contact caps, as they are passive forms of communications.
On the issue of call caps, the comments attempt to illustrate the issues that collectors have in getting in touch with consumers and the negative consequences that can occur when a collection agency is not able to get in touch with an individual.
A Cap of Seven Call Attempts Per Week, Per Account, Will Make it Harder for Consumers to Communicate with Collectors to Resolve Their Debt Obligations
With regards to the CFPBs proposal to cap calls at seven attempts per week, per account, it is helpful to have a clear rule for calling consumers. Still, I do have some concerns.
Reaching consumers by phone is very difficult. Most consumers have several phone numbers and are often unavailable to speak. The seven-call cap per week will make it harder to connect with our consumers. The unintended consequences to consumers is that they wont be able to reach a workable repayment plan to resolve their outstanding debt, may be charged additional interest and fees, and may have negative credit reporting. If collectors and consumers are unable to connect by phone, consumers may also face debt collection litigation. For these reasons, it is critical that the CFPB does not reduce the number of calls allowed below seven because any restriction, quite frankly, means less opportunity to work out a payment plan with consumer.
In addition, the seven calls per week should apply to each account, not each consumer. Collectors that service multiple accounts for the same consumer typically service the accounts separately because each account is different. Each account may be a different product type (for example, telecommunications versus student loan debt), and can have a different statute of limitations. Different types of debt also have different regulatory requirements (for example, medical debt collection requires different legal and privacy considerations than credit card collections), and would need to be serviced differently by collectors with specialized expertise. It is therefore critical that call caps be applied per account, not per consumer, so that collectors can appropriately service different types of accounts separately.
From there, the comment moves on to the use of email, text messages, and voicemails and the power they have to help consumers get their financial lives back on track.
There Should Be No Contact Caps on Passive Communications That Do Not Disrupt the Consumer or Require an Immediate Response
With regard to new technologies, I believe the CFPB did a good job in its proposed rules to update how collectors and consumers can communicate. Allowing for communications by emails, texts and voicemails will update the law to accommodate how most consumers prefer to communicate today.
While the CFPB apparently views phone calls as a more active form of communication, requiring a bright line call cap, its critical to make sure that passive forms of communicating are not similarly restricted. It is important that these new technologies are not hindered by unnecessary barriers, and a main goal should be to enhance the communication between consumer and collector to resolve debt obligations. The CFPB created an appropriate balance by giving the consumer overt opportunities to opt-out of receiving communication through these technologies.
Equally important to note is that these communications are passive forms to reach the consumer. Emails, voicemails and text do not interrupt consumers, as consumers can respond to them at their convenience. This differentiates them from how the CFPB has apparently viewed the active communications of phone calls, where the CFPB has proposed a contact cap. As they are passive communications, there should be no contact caps on emails, voicemails and texts. To take any action to restrict use of new technologies would chill their use and undermine the value of modernizing debt collection rules for the 21st century.
I appreciate the opportunity to comment on my concerns, and to commend the CFPB on seeking to facilitate communications between consumers and collectors. Ultimately, communications help consumers repay their debt obligations and avoid unintended consequences that may result when consumers and collectors are unable to connect. Thank you for the work you are doing in this regard.
Many of the comments were submitted anonymously, but a number of individuals chose to include their names. They are: Sean Mulcahy, Melissa Scarfeo, Kimberly Hammond, Tim Skeen, Brittany Lederman, Christopher Guerrero, Nouri Chihwaro, Meg Rainey, Tanya Flores, Brian Pedersen, Brandy Haza, Matt Jubenville, Brian Smith, Michael Merle, and Kaushik Kundu. There is a Matt Jubenville who is a director of legal affairs and litigation at Encore. Kaushik Kundu is a senior vice president at the company. Melissa Scarfeo is an IT manager, Nouri Chihwaro is a lead auditor, Tim Skeen is the director of forecasting and analytics, and Sean Mulcahy is a senior manager of operations. Michael Merle is the chief administrative officer at Midland Credit Management and Brittany Lederman is a registered in-house counsel at MCM.