If there is one particular component of Regulation F — the Debt Collection Rule from the Consumer Financial Protection Bureau — that has tripped up and confused more people in the months since the rule was released, it is the itemization date that will need to be included in the validation letter that collectors send to consumers. In this episode of “You Wanted a Rule, You Got a Rule,” John Bedard of Bedard Law Group discusses the five different options provided by the CFPB that collectors can choose from for their itemization date, along with the other definitions that need to be understood in order to compliantly communicate validation information to consumers once the rule goes into effect.
Some of the definitions in the section are going to be very important to collectors. Among them are, “clear and conspicuous” as in the validation information has to be “clear and conspicuous,” and the itemization date, which will act as a reference to help consumers understand the timeline of when the debt was incurred. Collectors can choose from one of five options for the itemization date:
- The last statement date, which is the date of the last periodic statement or written account statement or invoice provided to the consumer by a creditor;
- The charge-off date, which is the date the debt was charged off;
- The last payment date, which is the date the last payment was applied to the debt;
- The transaction date, which is the date of the transaction that gave rise to the debt; or
- The judgment date, which is the date of a final court judgment that determines the amount of the debt owed by the consumer.
The itemization date is “the big Kahuna” of definitions Bedard says in the episode, along with explaining why the itemization date is going to be so important to collectors.
Finally, Bedard walks through how the CFPB defines the “validation period” and discusses why this is going to be important to collectors, too. “When we learn about validation information, we’re going to learn that debt collectors are going to be required to identify the ending date of the validation period and actually disclose it to consumers,” Bedard says in the episode.
Check out all the episodes in the series here: You Wanted a Rule, You Got a Rule. You will also find links on that page to subscribe to the audio version of the series through Apple Podcasts, Google Podcasts, and Spotify. Like what you see? Be sure to reach out to John and let him know!