New FDCPA Regulation F: How It Impacts Your Condo/HOA

The Fair Debt Collections Practices Act (FDCPA) was introduced to outline prohibited collection practices. The newly introduced FDCPA Regulation F adds important language to help flesh this out for the modern world. This sounds pretty straightforward, especially given how well-established the FDCPA is, but Regulation F has a lot to unpack, especially for community associations

When the FDCPA was originally enacted, it was 1979, and although disco was all the rage, it would be at least another decade before emails and text messages became an essential part of our lives. The FDCPA originally considered consumers’ privacy by prohibiting collection agencies from communicating with unauthorized third parties about a debt. It was easy to comply on a phone call – simply verify the consumer’s identity before you proceed. It’s not so easy to comply with emails and text messages. How do you know you have the right contact information? How do you know others aside from the intended person do not have access to the information you’re sending? 

So What Changed?

Quite a bit, but in ways that make sense in our modern, digitally-tethered society. Regulation F protects consumers’ privacy by requiring collection agencies to implement a rigorous set of procedures for verifying email addresses and cell phone numbers to ensure that electronic communications are only received by the intended party. 

Reg F prohibits collection agencies from sending an electronic communication to an email address or cell phone number for which the collection agency has not received direct consent, or has not received verified contact information from the association.

When the FDCPA was enacted, consumers were much more likely to answer their phone calls. There was no caller ID, and answering machines were costly. Today it’s easy to screen calls, and as spammers and scammers become more and more common, we become more likely to ignore or even block phone calls from phone numbers we don’t recognize. For this reason, it is essential to be able to communicate via email and texts. 

How Can HOAs and Condo Associations Comply With the FDCPA Regulation F?

Your manager (or whoever sends delinquent courtesy letters) will need to include some language that will enable the collection agency to consider the homeowner’s contact information “verified.” If you are in a self-managed condominium or homeowner’s association, your accounting department can do this very easily as you are already sending these notices.

Collection agencies can use email addresses that an association has obtained from the homeowner, has used to contact the homeowner previously, and for which the homeowner has not opted-out, if the association sends the homeowner a written or electronic notice clearly and conspicuously disclosing the following:

a)     That the debt has been or will be transferred to the debt collection agency (the identity of the debt collection agency must be given);

b)     The email address and the fact that the debt collection agency might use the email address to communicate with the consumer about the debt;

c)     That, if others have access to the email address, then it is possible someone other than the intended recipient may see the emails;

d)     Instructions for a reasonable and simple method by which the homeowner can opt out of such communications; and

e)     The date by which the debt collection agency or the creditor must receive the homeowner’s request to opt out (must be at least 35 days after the date the notice is sent).

The CPFB has provided the following sample language for management companies or boards of directors may use. Please be advised that you are NOT legally obligated to use this language, but it will almost certainly help with your collection efforts as it will allow the collection agency to communicate electronically with the homeowner from day one.

“We are transferring your account to ABC debt collector, and we are providing ABC debt collector with the following email address for you: [email address]. ABC debt collector may use this email address to communicate with you about the debt. If others have access to this email address, then it is possible they may see the emails. If you would like to opt out of communications by ABC debt collector to [email address], please fill out the enclosed form and return it in the enclosed envelope so that we receive it by [date].”

Adding this language to the final courtesy letter that advises that they are going to collections helps the association by providing the collection agency the ability to immediately start outreach on every level possible. Axela Technologies knows and understands collection regulations from a state and federal perspective. We work diligently to keep your community association’s cash flowing, keep the management company safe from any FDCPA violations, and improve the residential experience. Call us for a free review and collection analysis.

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