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The Consumer Financial Protection Bureau (CFPB) continues to refine debt collection rules to align with modern communication practices and protect consumers. Key updates include:
Recent enforcement actions emphasize compliance, such as the 2024 Navient case, which led to a $120 million penalty and a ban on servicing federal loans. Other cases targeted credit reporting errors and improper debt collection practices, resulting in millions in penalties.
For compliance, debt collectors should update validation notices, monitor call frequency, and leverage technology to track opt-outs, time-barred debts, and communication timelines. Following these rules not only avoids penalties but also builds trust with consumers.
In 2026, the CFPB introduced a series of updates, publishing eight Federal Register documents - two rules and six notices - to refine its regulatory framework. These changes build upon earlier enforcement efforts, offering clearer compliance standards for debt industry participants. Among the updates are revised asset-size thresholds under Regulation Z and Regulation C, which adjust exemptions for smaller financial institutions.
One of the most notable shifts is the replacement of vague requirements with specific, measurable standards. For instance, the earlier reliance on an unclear "harassment" standard for phone calls has been replaced with the reinforced "7-in-7" rule. Under this rule, debt collectors are prohibited from making more than seven calls within seven days - a clear and enforceable benchmark. This move from ambiguity to precision represents a major evolution in debt collection regulation.
The updated policies present notable challenges for debt buyers and sellers, requiring operational adjustments to meet compliance. Validation notices now need to include an itemized table detailing interest, fees, payments, and credits. Additionally, a "tear-off" form must be provided to make consumer disputes easier. This means debt buyers must integrate creditor data more thoroughly to ensure accuracy.
Another significant change is the mandatory 14-day waiting period before reporting debts to credit bureaus after consumer contact. This adjustment forces collectors to rethink their strategies and timelines.
Furthermore, collectors are now prohibited from suing on time-barred debts. This rule compels debt buyers to carefully screen portfolios to verify the legal age and status of debts, adding a layer of risk to the acquisition process. These measures reflect the CFPB's commitment to strengthening consumer protections and ensuring consistent compliance across the industry.
CFPB Debt Collection Enforcement Actions and Penalties 2024-2025
The Consumer Financial Protection Bureau (CFPB) has been stepping up its enforcement efforts, targeting debt collectors, student loan servicers, and credit reporting agencies. In September 2024, the CFPB filed a proposed order against Navient (formerly Sallie Mae), leading to a $20 million penalty and $100 million in consumer redress. This action addressed allegations that Navient steered borrowers toward costly forbearance options instead of more affordable income-driven repayment plans.
Credit reporting agencies have also faced scrutiny. In January 2025, Equifax was fined $15 million for failing to investigate credit reporting errors and for keeping "junk data" in consumer files. That same month, American Honda Finance Corporation received a $12.8 million penalty for providing inaccurate consumer credit information and neglecting to offer required COVID-19 credit protections. Additionally, Block, Inc., the operator of Cash App, was ordered to pay a hefty $175 million in January 2025 for shortcomings in fraud prevention and handling consumer disputes.
Precedent-setting actions against major debt buyers have also had a lasting impact. For example, Encore Capital Group, the largest debt buyer in the U.S., was required to pay $42 million in refunds, a $10 million penalty, and halt collection on $125 million in debt due to the use of robo-signed documents and lawsuits on unverified debts. Similarly, Portfolio Recovery Associates (PRA) was ordered to pay $19 million in refunds, an $8 million penalty, and stop collecting on $3 million in debt.
These cases highlight the need for strict compliance measures across the debt collection and credit reporting industries.
These enforcement actions provide clear lessons for debt collectors, emphasizing the importance of strong verification and litigation practices. Under current regulations, document verification is a must. Collectors are now required to review original account-level documentation before filing lawsuits. This includes ensuring they have specific records that confirm the debt's accuracy, such as the name of the original creditor and the charge-off balance.
Litigation practices also need to be restructured. To avoid allegations of mass-signing, all affiants must thoroughly review the original account-level documentation they reference. Affidavits must accurately reflect the signer's personal knowledge of the facts and the attached documents.
Debt collectors are now prohibited from reselling debts to third parties, a rule aimed at stopping the spread of inaccurate or unverified information. When assigning debts to third-party law firms or collectors, it's crucial to include details about whether the debt is currently disputed by the consumer. The CFPB has also introduced market bans to remove repeat offenders from specific sectors, signaling a tough stance on systemic violations.
Debt buyers must prioritize rigorous internal processes to investigate consumer disputes within the legally required timeframes. Failure to do so could lead to allegations of conducting "sham investigations".
"We will continue to take action to protect consumers from illegal and obnoxious debt collection practices".
These enforcement actions make it clear: compliance isn't optional, and the CFPB is prepared to take decisive action against those who fail to meet its standards.
Staying compliant with the latest CFPB rules is non-negotiable, especially in light of recent enforcement actions. Debt collectors need to make specific operational updates to ensure they meet these standards. Start with revising your validation notice process. Each notice sent to consumers must include a detailed breakdown of the debt - covering interest, fees, payments, and credits - and a "tear-off" dispute form. The CFPB also provides model forms in English and Spanish, which can act as a guide to meet formatting requirements.
"Today's final rule provides clear rules of the road for debt collectors on how to disclose details about a consumer's debt and informs consumers how they may respond to the collector, if they choose to do so." – Kathleen L. Kraninger, Director, Consumer Financial Protection Bureau
When it comes to phone calls, there are strict limits: no more than seven calls about a specific debt within seven consecutive days. After speaking with a consumer, you must wait seven days before calling again. Additionally, calls must only occur between 8:00 a.m. and 9:00 p.m. in the consumer's local time zone. Voicemails should follow the limited-content message format, which means including only your business name (without mentioning debt collection), a callback number, and a request for a return call.
Before reporting any debt to a credit bureau, you must contact the consumer and wait 14 days after sending a validation notice. If you’re using electronic communication methods like email, text, or social media, every message must include a clear opt-out option and maintain privacy protections. Avoid initiating or threatening lawsuits on debts where the statute of limitations has expired. These updates are designed to protect consumers while ensuring consistent compliance across the industry.
Technology can make managing these regulations much easier. For example, call tracking software can automatically enforce the seven-calls-in-seven-days rule and block outgoing calls for seven days after a successful conversation. Secure platforms can handle the delivery of validation notices through email or text, while also tracking delivery issues to manage the necessary waiting period before reporting to credit bureaus.
A preference management system is another essential tool. By maintaining a centralized database of consumer opt-outs across all communication channels - phone, email, text, and social media - you can ensure no further contact occurs once a consumer opts out. Data analytics tools can help identify time-barred debts in your portfolio, preventing automated litigation triggers. Lastly, programming your dialers with time-zone logic ensures calls are restricted to the allowed hours of 8:00 a.m. to 9:00 p.m. in the consumer’s local time. These tech solutions not only simplify compliance but also help maintain trust with consumers.
The debt collection industry is undergoing a major transformation, driven by the CFPB's assertive enforcement efforts and detailed rules under Regulation F. A clear example of this is the September 2024 action against Navient, which led to a permanent ban on servicing federal Direct Loans, a $20 million penalty, and $100 million in consumer redress. This case highlights the Bureau's readiness to impose tough penalties on repeat offenders. The stakes for non-compliance have never been higher.
In this environment, staying ahead with compliance strategies is crucial. Regular education and updating internal processes are non-negotiable. The CFPB frequently issues advisory opinions, particularly concerning medical and rental debt collection, and continues to refine its interpretation of what constitutes a "debt collector" under the FDCPA's "principal purpose" test. For debt buyers, it’s critical to assess whether their primary revenue source is debt collection, as this classification requires full adherence to FDCPA rules, regardless of debt ownership.
Fortunately, the CFPB provides tools to help organizations align with these requirements. Resources like the Small Entity Compliance Guide, the Model Validation Notice (including Spanish-language versions), and the Debt Collection Exam Procedures offer clear guidance on disclosure standards. Subscribing to updates through the CFPB's Debt Collection Rule Implementation page ensures timely notifications about policy changes. As former CFPB Director Kathleen L. Kraninger explained:
"Today's final rule provides clear rules of the road for debt collectors on how to disclose details about a consumer's debt and informs consumers how they may respond to the collector, if they choose to do so".
By leveraging these resources and adopting proactive internal measures, businesses can maintain compliance and adapt to evolving regulations.
The risks of reactive operations are immense. Enforcement actions can result in massive financial penalties and even permanent bans from the market. To avoid these outcomes, businesses must prioritize regular audits, invest in technology-driven compliance systems, and provide ongoing training for their teams. These steps not only ensure alignment with CFPB regulations but also safeguard the long-term viability of debt collection operations.
Call limits are set per consumer, not per individual debt. This approach aligns with the CFPB's regulations and guidance on debt collection practices. To stay compliant, you should account for all debts tied to a single consumer when determining and applying call limits.
The 14-day credit reporting wait period begins when a debt is reported to a consumer reporting agency. However, the precise starting date for this period is not explicitly detailed in the information provided.
To determine if a debt is time-barred, you’ll need to look into the statute of limitations for your specific state and the type of debt in question. These time limits often fall between 3 to 6 years, but they can vary widely depending on state laws and the kind of debt. For instance, some debts, like federal student loans, don’t have a time limit at all.
Be aware that certain actions, such as making a payment or even acknowledging the debt, might reset the clock on the statute of limitations. For exact details, it’s a good idea to check with your state’s legal resources or reach out to a consumer protection agency. They can help clarify your rights and responsibilities.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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