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Compliance

Regulation F and the Impact to Payment Communications

By: Latoya Irby

© HealPay

The upcoming Regulation F has far-reaching implications for the collections and receivables industry, with significant changes not only for firms but also for vendors like CRMs and payment partners.

Using email addresses and notifying intent to communicate

The Regulation details how firms can use email addresses and obtain opt-in consent from consumers from the creditor, from a previous collector, or directly from the consumer.

By providing their email address on the Portal, for example, consumers give consent to email as long as they’re given a clear disclosure.

Prior consent—consumer-provided email address. If a consumer provides an email address to a debt collector (including on the debt collector’s website or online portal), the debt collector may treat the consumer as having consented directly to the debt collector’s use of the email address to communicate with the consumer about the debt for purposes of § 1006.6(d)(4)(i)(B) if the debt collector discloses clearly and conspicuously that the debt collector may use the email address to communicate with the consumer about the debt.

This means adjusting your Terms and Conditions to alert consumers that providing an email address or phone number via the Portal or your website means they will receive communications relating to their file.

Allow consumers to opt-out of communications

Consumers should be given the opportunity to opt-out debt communications with every electronic message you send them, i.e. every email and every text message.

With emails, this means adding an opt-out link or instructions for opting-out in the footer of the email.

Reg F footer example

Exception for legally-required communications

The Regulation allows firms to send legally-required communications even if a consumer has opted-out. This applies to things like email reminders , which you’re required to send if a consumer has posted a payment by more than five days.

Regulation F now requires firms to exclude weekends and holidays from the post-dated reminder timing of 3 to 10 days.

Keeping firms aware of opt-outs

Check with vendors who send emails on your behalf to verify that you’ll receive a notification when a consumer has changed their communication preferences. This way you can update your records. Likewise, share this information with vendors when you receive cease communication letters or notice of refusal to pay. This way, vendors can update their records and refrain from sending any communications to consumers.

Record retention

Regulation F requires firms to keep records that are evidence of compliance or noncompliance for three years from the last date of collection activity on the account, but doesn’t require firms to create any records that it wouldn’t keep in the normal course of business.

Note that this three year clock is based on the collector’s activity, not the consumer’s. So it would begin on the last date the firm attempted to contact or enforced a lien, for example.

Changes HealPay is making

We want to be sure our firms remain in compliance with the law and are implementing changes under Regulation F:

  • Adding an unsubscribe link to debt related-emails.
  • Adding a disclosure to legally-required disclosures for opted-out consumers.
  • Adding communication controls within the Account Settings on the Portal.
  • Notifying firms when consumer’s change their communication preferences.