For all of the excitement and possibility that surrounds the area of collectors communicating electronically with consumers via email, text messaging, and other digital channels, one of the areas that collectors tend to shy away from is sending the initial validation notice through such channels. But the Consumer Financial Protection Bureau has laid out instructions in Regulation F to help collectors that want to send the validation notice electronically. In the latest episode of “You Wanted a Rule, You Got a Rule,” John Bedard of Bedard Law Group walks through this particular section of Regulation F — Section 1006.34d(4) — to help collectors understand what must be done in order to compliantly send the validation notice via electronic channels.
“The Bureau understands that there are some unique features of electronic communications that are not found in paper communications and that collectors ought to be able to take advantage of those unique benefits,” Bedard says in his breakdown of this section.
Ultimately, what the CFPB says in this section of Regulation F is that permitted — but not required — to format the validation notice using fillable fields and hyperlinks, Bedard says. But those fields and links must be used in specific places. For example, collectors can present the consumer response section of the tear-off notice using fillable fields, allowing consumers to electronically check off one of the boxes in that section.
With regards to hyperlinks, collectors can activate their website address, the link to the CFPB’s resource page on debt collection (www.cfpb.gov/debt-collection), and the link allowing consumers to file disputes and requests for original creditor information, Bedard says.
Bedard also points out that Regulation F does not say that collectors can hyperlink the “I enclose this amount” portion of the validation notice which could allow consumers to click on that link and be taken to a payment portal in order to make a payment on the debt.
“You will jeopardize your safe harbor if you end up putting hyperlinks and you end up putting fillable fields in places that the Bureau does not contemplate those things being,” Bedard warns.
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!