The agency is proposing to prevent collectors from using non-litigation means – including telephone calls – to collect on time-barred debt unless collectors disclose to consumers during the initial contact and on any required validation notice that the debt is time-barred. Last May, the CFPB published a proposal to implement the Fair Debt Collection Practices Act as a means of providing consumers with clear protections against harassment by debt collectors and straightforward options to address or dispute debts. The proposal also presented defined limits on the number of calls debt collectors may place to reach consumers on a weekly basis and clarified how collectors may communicate lawfully in voicemail and digital messaging.
Furthermore, the NPRM also proposed to prohibit debt collectors from suing or threatening to sue on debts they know or should know are time barred. However, the CFPB also included “know or should know” standard in its proposal recognizing the concern that some debt collectors could be genuinely unaware if the statute of limitations expired even after undertaking a reasonable investigation.
The Supplemental NPRM proposes model language and forms that debt collectors could use to comply with the proposed disclosure requirements, the CFPB added. The public is invited to submit written comments on the proposed rule, including on the proposed knowledge standard, in the 60 days following its publication in the Federal Register.