Advice From the Experts on Day One of the Regulation F Era

The time has come for the rubber to meet the road. For the cards to be dealt and played. For green flag to be waved and the race to start. A new era in the history of the accounts receivable management industry begins today, and with it, a new host of anxiety and concerns. Will there be a rash of lawsuits? Did collectors do everything the way they were supposed to? To help companies cope with the stress, reached out to experts from across the industry and asked for their advice. Here is what they said:

CHRIS MEIER, THE CMI GROUP: This is new for everyone so don’t feel defeated if you are not a Reg F guru by now. Just make sure you are honoring the mandatory elements and putting consumers first in the areas that still need fleshing out. We will survive this.

MIKE FROST, MALONE FROST MARTIN: Be confident and celebrate what you have accomplished as you implement your Reg F plan. As you worked through Reg F over the past year, you identified problems that Reg F created for your business processes and you solved those problems. As Reg F becomes effective, it is likely that unforeseen “new” problems will be identified that will again need solutions. You will again find solutions to those problems and will continue to be a vital contributor to the US economy.

LESLIE BENDER, CLARK HILL: The long awaited clarity under the FDCPA has arrived. As we look ahead to 2022, it appears Reg F will create wonderful opportunities for folks in the credit and collections industry and all our consumer-facing employees to focus on consumers’ communication preferences, however our customers may express them, and to explore accessible means for digitally engaging with consumers.

DARA TARKOWSKI, ACTUATE LAW: Be prepared for whatever comes after November 30th. Everyone is feeling uncertain and trepidatious. With no court precedent, be sure your policies and procedures are well documented regarding your Reg F compliance efforts, decisions, and implementation. These will be critical in any attempt to prove up a bona fide error defense and take advantage of the safe harbors offered by Regulation F.

MICHAEL KLUTHO, BASSFORD REMELE: Use the Limited-Content Message. It’s the best nugget Reg F has to offer.

DAVID SCHULTZ, HINSHAW CULBERTSON: Consider phasing things in as opposed to doing too much at once. For instance, if smaller or mid-sized agency are not already using text and email, they may want to focus first on putting in place the initial letter and call volume limitations. Once those are set and working well, then consider phasing in email and texting (and other means of communication).

BRIT SUTTELL, BARRON & NEWBURGER: My advice: (1) If your business name does not imply that you are a debt collector, use the limited-content message; and (2) use the Form and don’t mess with it.

JEFFREY TURNER, SURDYK, DOWD & TURNER: Don’t get caught up in thinking you need to have the answer to every question on November 30th. Finalize your initial notice, your policies, and procedures, and continue to move forward. Some issues will become clearer, and questions will be answered down the road. You’ve adapted and changed your letters and practices many times in the past. You can do it again.

JOHN BEDARD, BEDARD LAW GROUP: The two best ways to avoid being sued in a Regulation F world is to (1) use the model validation notice, and (2) control outbound telephone call volume.

LORAINE LYONS, MALONE FROST MARTIN: Remind your collectors to listen for consumer communication preferences (and document accordingly) and provide a refresher on the 7/7 rule. Also, ensure you have updated your process to notify the consumer about the debt before furnishing information regarding the consumer’s debt to a consumer reporting agency. Remind yourself You’ve got Reg F! Best wishes.

LAUREN BURNETTE, MESSER STRICKLER: My words of wisdom are — breathe. Change is hard, but change is healthy. Remember that we’re all in this together, and that you have a community of people to help you adjust to this new normal. We’ve all hashed and rehashed the dos and don’ts, we’ve looked at every possible permutation of letter templates and safe harbors and limited content messages, we’ve haggled over data points and call caps and disclosure placement. Now, we take a deep breath and embrace the change we’ve been preparing for.

STACY RODRIGUEZ, ACTUATE LAW: Now that you are operationally ready for November 30th, please make sure that your new policies, procedures, processes, workflows, controls, and training programs addressing Regulation F adjustments are formally documented and complete. That includes call and conversation frequency, time/place/medium preferences, electronic communications (including obtaining and documenting consent and withdrawal of consent), credit reporting waiting periods, time-barred debt, vendor oversight and auditing, etc. This is essential for handling the new wave of litigation defense and audits that are sure to follow.

JOANN NEEDLEMAN, CLARK HILL: Industry should stay calm and take deep breaths. You are prepared and there are numerous resources out there to assist.

Your staff is going to have to listen and talk to consumers differently. The next couple of months should be spent monitoring and re-training staff to ensure they are communicating in ways that the consumer wants.

STEFANIE JACKMAN, BALLARD SPAHR: Validation notices present fairly low-hanging fruit for claims seeking to establish the limits of Regulation F’s safe harbor protections. Be prepared for those claims to start coming very soon.

JUDD PEAK, CAPITAL ACCOUNTS: For me, the best lesson from my Reg F experience (and by extension, advice to others) is to build and strengthen those relationships with your creditor/clients. Proper Reg F compliance requires enhanced data and engagement from the creditors, and getting there has underscored the importance of good communication channels and flow of information. The Reg F process has forced those interactions to occur more frequently, but having that rapport will only serve to benefit you in the future.

DAVID KAMINSKI, CARLSON & MESSER: With regard to Regulation F and the Model Notice, now is not the time to panic. Most of the industry has done its homework for months and strived to comply as best as possible. Yes, there are many unknowns and we are venturing into new territory. But, we are here for you and we will stand by your side and continue to work with you and support you as we all boldly go where no one has gone before.

RICK PERR, KAUFMAN, DOLOWICH & VOLUCK: Follow the Rule. It seems simple, but many agencies are looking for ways around the Rule instead of how to comply with it. While some of the safe harbors may not be very helpful, compliance with the Rule beats defending a lawsuit any day.

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