Debt Collections on Tenterhooks with Six and Sevens following CFPB’s Reg F

Reg F isn't a hurdle to adjust to and live with. It's an opportunity to improve the way you interact and engage with your customers. Embrace it.

The U.S. Consumer Financial Protection Bureau (CFPB) announced the final rules interpreting the Fair Debt Collections Practices Act (FDCPA) on July 30, which went into effect on November 30, 2021. Regulation F has articulated prohibitions on harassment or abuse, false or misleading representations and unfair practices. These rules require the debt collectors and recoveries staff to—if non-complaint—make significant changes on how and when they can communicate with debtors. Here are some highlights:

  • The 7-in-7 rule: Regulation F stipulates that there may be no more than seven calls made by a debt collector to a consumer in a span of seven days.
  • The debt collector is presumed to violate the law if they place a telephone call to a customer about a particular debt:
    • More than seven times within a seven-day period, or
    • Within seven days after engaging in a telephone conversation with a customer about the particular debt.
    • A debt collector is presumed to comply with the law if the debt collector does not make calls over either of the above limits. 
  • Digital Contact: Debt collectors can contact borrowers through voicemail, email and/or text messages.
    • Debt collectors must offer consumers a “reasonable and simple method” to opt out of communications sent to a specific phone number or email address. If the debt collector uses electronic communications to reach out, a consumer can use that same mode of contact to send a “cease communication” request or inform the collector they refuse to pay.

Some say these new contact guidelines from Regulation F put customers in the driver’s seat.  But the reality is that they have never left that seat.  Banks and financial institutions have always sought to gain a realistic awareness of their customers’ wants, needs, likes, and dislikes. By knowing these preferences, they can shape personal financial products and services to the emerging reality of consumers’ needs.  

Statista research states that Millennials were the largest generation group in the U.S. in 2019, with an estimated population of 72.1 million. Born between 1981 and 1996, Millennials recently surpassed Baby Boomers as the biggest group, and they will continue to be a major part of the population for many years.

Resident population in the United States in 2020, by generation (in millions)

Morgan Stanley research states that millennials are the largest driver of net new loan demand. Gen Z is set to follow suit and up to 80% of smartphone-carrying Gen Z members are already using mobile banking.

Millennials could become the largest borrowers over the next 10 years

 In 2022, it is prudent for debt collections and recovery to be mindful of the emerging statistic that Millennials are now the dominant spending base amongst customers.

As we emerge from the COVID-19 pandemic, we are seeing the normalization of the surge in digital banking products and services that was prevalent over the last two years. It is evident that digital transformation will be at the heart of an improved customer experience in the banking and financial services industry.

Given the pace at which the market is moving and emerging, collections and recoveries will have to adapt rapidly. Following the CFPB ruling the traditional contact center model of intensive attempts to contact and resolve debt levering via phone calls is being challenged to evolve. Another change the industry is learning to deal with is that as contact preferences change, contact center right-party contact rates diminish.  It is getting harder for debt collectors to reach customers by phone. Scaling contact center operations to account for a loss of efficiency is a heavy and operationally intense expense. The fragile balance of improving contact rates, successfully engaging with a segment that is telephone call-averse and consistently maintaining regulatory compliance is increasingly precarious.

Millennials and Gen Z are driving banks and financial services companies to redefine and consider shifting and enhancing the way they connect and engage with their customers. It is widely evident now that digital contact could prove a catalyst to effective and efficient customer engagement that can be leveraged to achieve short  and long-term collections agencies portfolio goals while enhancing customer alignment to preferences and service delivery.

The following info graphic by Barclays clearly outlines the change in communication media adoption and communication preferences evidenced in emerging generations.

An overview of the working generations

With the introduction of the FDCPA Regulation F, has the Consumer Financial Protection Bureau pushed the industry to look beyond traditional contact methods, calling devices, engagement building scenarios?  Are these regulations forcing us to enhance traditionally designed debt collection practices and treatment paths? 


The key to engaging the emerging customer base will be to personalize the debt collector's approach while continuing to leverage traditional foundational disciplines. Enhancing the traditional approach of segmenting customers into standard risk bands with a personalized approach can be more engaging and effective. What we learn from behavior patterns may teach us that a Generation X and Generation Y/Z with the same probability to pay will react very differently to the same debt collections approaches. It is prudent to act now to ascertain the optimal engagement model for these customer segments. And to do so on the basis of insight we have on different behavior patterns and importantly on the basis of their generation insight featuring their attitude towards technology, communication media, communication preference and preference while making financial decisions.    

Does everything need to change for effective Debt Collections Management? Not really, the core questions we are looking to problem solve for remain consistent for successful collections and recoveries management as outlined below:  

Collections and recoveries management


A well-defined and balanced approach featuring compliance to the CFPB Regulation F requirements, strategies that efficiently and effectively provide customer preferred, customer centric and positive engagement enabling relevant solutions is the need of the hour. Such a redefined collections and recoveries approach will go a long way in appropriately categorizing customers and developing a relevant understanding of customer needs and how to solve for the core questions specific to them.   

Time for action / Call to action


With inflation in the US around 8.6%, one of the highest rates in the world, businesses and consumers are bracing for an potential economic recession. While not attempting to predict with any precision the severity or duration of the talked about potential recession, collections and recovery functions should take steps now to review their collections customer engagement operating models. With rising delinquency levels seemingly threatening an upward curve over the last few months, collections and recoveries groups are best positioned to shake off the apprehensions around six or seven contacts, ascertain and understand the elements to compliance, and have in their arsenal a contemporary communication engine that can orchestrate convenient one-way and two-way omni-channel interactions that are compliant with CFPB Reg F requirements. It’s also important to ensure that the deployment strategies yield higher customer satisfaction ratings from more convenient digital experiences and balances engagement with improved efficiency by resolving more situations through the preferred medium digitally. While undergoing this transformation, the key is to keep the focus on delivering value with improved and engaging experiences for your customers and not merely more digital options.  The wallet-share of consumers isn’t guaranteed with everyone competing for it. It is critical that you capture every moment of potential opportunity to engage your customers without ever losing the impetus.

FICO offers software and experience that helps our clients facilitate compliance with CFPB’s Reg F requirements, deploy omnichannel communications to contact customers in the way they prefer, and contact customers in the way most likely to succeed.  Through targeted mobile contacts delivering seamless digital and omnichannel communications—including voice, text, email, mobile apps, interactive voice response (IVR) and self-serve portals—FICO® Customer Communication Services customer report 80% increase in right party contacts, 79% of contact result in a payment or a promise, 75% of the collections dialogue handled digitally, and importantly, a 93% improvement in kept promise rates. 

Collections is part of the wider lifecycle services where we support our customers, and many processes overlap across a multitude of products (including FICO® Customer Communication Services, FICO TRIAD™ Customer Manager, FICO Strategy Director and C&R Software Debt Manager).   

My team, the FICO® Advisors, provides product-agnostic, practitioner level domain expertise, and transformation support in cross-product orchestration of processes that enable seamless and optimal execution against our clients’ goals and objectives. We help our clients meet heightened expectations from bank customers with scalable, intelligent omnichannel communications that improves collections effectiveness and customer engagement by leveraging predictive analytics to determine not only when accounts enter collections, but also how to treat them most effectively.

 FICO® Customer Communication Services for Collection:


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