Regulation F…Practical Considerations to Ensure Your Accounts are Compliant
On December 30, the Consumer Financial Protection Bureau’s (CFPB) new rules governing third-party Collections went into effect across the nation. In our previous post about Regulation F, we talked about some of the broader changes to the laws, including new limitations on consumer contact, modernizations (text/email/social media contact now allowable), and some of the other new requirements that will affect our clients’ accounts now that the changes have taken effect. Today, we’ll be talking in more detail about some practical steps clients can take to ensure your post-move out policies and procedures are going to put you in the best position to successfully recover your balances in this new legal environment.
First and foremost, PLEASE INSTRUCT YOUR COMMUNITIES TO RETAIN A COPY/SCAN OF THE FINAL MOVE OUT STATEMENT THAT IS PHYSICALLY MAILED TO THE PAST RESIDENT. The CFPB’s new Safe Harbor Letter template specifically refers to the last statement the consumer received about their balance prior to the account going delinquent (into collections), so it is even more important now that the copy of the final statement you send us is the same copy of the statement the consumer received. It’s okay if the final balance has changed since the statement was mailed (the letter template allows us to show credits and debits after the fact), just be sure that mailed copy is attached and uploaded with your collection accounts so we can reference the document the consumer actually received from your community.
We may also ask for more information when your communities reach out to request balance adjustments. Because the new letter template requires our agencies and firms to give a breakdown of new credits and debits, your communities may receive requests for additional documentation and/or details if they request a balance adjustment, particularly if a balance goes up. For example, the new letter template requires us to provide a specific figure for “fees”, so if the new charges added are for fees specifically, your communities may need to provide a more specific accounting of the charges being added.
Additionally, it would also greatly assist our Collections Network if you can make sure communities clearly describe any fees assessed in your ledger. Sometimes, communities will use shorthand in their descriptions for specific fees referenced in the lease (e.g. “no notice” or “broke lease”). For the sake of clarity, these charges should be added with clear descriptions that specifically reference the fees as stated in the lease; that way there will never be any confusion about what is and isn’t a fee, and if will also make it much easier to tie the specific charges back to your lease if we ever received a dispute.
If you’d like to schedule a meeting with our team to discuss the new Regulation F changes and your company’s current policies in more detail, please don’t hesitate to contact our Director of Operations, Bryan Bailey (firstname.lastname@example.org) to set something up.