How Debt Collection Has Changed

By Robert Hale, MBA, Director of Business Development, Receivables Management Corporation

2022 Alliance sponsor article courtesy of Receivables Management Corporation

  1. Regulation F took effect on November 29, 2021. Regulation F is large and complicated. The document containing the final rule and official interpretation is over 350 pages.
  2. Key Points: debt collectors cannot report a Debt to a credit bureau before they contact you. Collection vendors must supply more information in the Notice of Debt.
    • An itemized date can be one of five different dates: the date of the last statement, the charge off date, the date of the last payment applied to the debt, the date of the transaction that gave rise to the debt, and the judgement date if there is court judgement on the debt.
    • Validation Information: the collection vendor must supply the consumer with more extensive validation information, including the debt collector’s name and mailing address, the consumer’s full name and mailing address, the account number associated with the debt, the name of the creditor to which the debt is currently owed, the amount of the current debt, and an itemized list of any payments made.
    • Dispute and Information prompts: the debt validation notice must contain a returnable form. The prompt will allow the consumer to check an “I want to dispute the debt because” option. The consumer can then check one of several boxes, for example, “this is not my debt,” or “the amount is wrong,” or “other.”
    • Disclosure of Rights: the debt validation notice must contain information advising the consumer of their right to dispute the debt and request further information.
    • Regulation F clarifies that email and text messages can be used. It also states the consumer can specify what communication channels the collector can use.
    • Limits on communication: Regulation F puts strict limits on how often a collector can contact a debtor. A collector cannot call a debtor more than seven times within seven consecutive days. If a collector speaks to the debtor on the phone, the collector must wait seven days before calling again.
  3. Additional Changes:
    • Starting July 1, 2022, medical debt that has been paid in full will no longer be included on credit reports from Equifax, Experian, and Trans Union. It is the responsibility of the credit agencies to remove the paid in full medical debt from the consumers credit report. In addition, the credit bureaus are increasing the amount of time before medical debt in collection appears on the debtor’s credit report. Debts will need to be at least one year old before they can be placed on a consumer’s credit report of the credit reporting. Beginning in March of 2023, the three credit reporting agencies will no longer include medical debt in collections under $500.00 on credit reports.

In closing, nearly one in ten adults, or about 23 million Americans, owe at least $250 in medical debt.

Article submitted by:
Robert Hale, MBA
Director of Business Development
Receivables Management Corporation
Cell (803)-414-0103
1-800-849-2201 Ext. 135