Reg F language you need to know: Clear and conspicuous

Reading glasses sit on a stack of papers.

As all regulations are wont to do, Reg F continues to impact revenue cycles among collectors. The amendment to 12 CFR part 1006, which implements the FDCPA, creates new communications requirements for debt collection groups and agencies — and following new regulations presents new challenges. 

We’ve already written about how to navigate some aspects of Reg F using AI. Today, we’re going to provide more information about how “clear and conspicuous” comes into play, and how your collections group can handle it. 

What is clear and conspicuous disclosure in Reg F?

Agency leaders have been busy implementing plans for Reg F adherence that involve vendor relationship changes, process overhauls, and more. But the success of many of these plans can be boiled down to a simple principle: How clearly do they communicate with the debtor

Specifically, the phrase “clear and conspicuous” has been used with regard to two particular areas of debt collector-to-debtor communications: opt outs and validation notices. 

What does clear and conspicuous mean in opt outs?

The premise is quite simple: An electronic or written communication (sent in a specified time period) must include a clear and conspicuous statement that tells the debtor how to opt out of those communications — and by when. But what does clear and conspicuous mean? A certain font size? A certain letter count? A certain email or letter design? 

Of course, collectors asked these questions. And some were answered. The Bureau will add commentary that offers guidance on the meaning of clear and conspicuous — “readily understandable” and legible, along with “examples illustrating how to comply with the rule when sending a text message or email,” and the clear and conspicuous rule for opt outs remains a part of the Final § 1006.6(e). 

They’ve also offered guidance with regard to “reasonable and understandable,” available here.

What does clear and conspicuous mean in the validation notice?

Again, the premise here is simple. That doesn’t mean it’s easy to achieve. 

A debt collector can only send an email to a debtor’s email address as the validation notice if many stipulations have already been met. Specifically, the creditor needs to have sent the notice that has already met clear and conspicuous disclosure of debt transfer requirements, and referred to an upcoming communication to that email address via a debt collector.

Of course, the validation notice doesn’t have to occur over email. Regardless, the definition of clear and conspicuous matters. It still means readily understandable. 

In the case of electronic communications, just as with the opt-out, legibility counts. “In the case of oral disclosures, the disclosures also must be given at a volume and speed sufficient for the consumer to hear and comprehend them.”

But how will anyone know if that’s happening in every email and on every call — until an audit hits?

It all comes down to clarity

If you don’t already have total clarity on voicemails, complete call coverage, or the right framework for agent compliance — or if you believe you have it, but haven’t run up against a major Reg F “clear and conspicuous” challenge yet to prove it — it’s time to start considering how machine learning can help. 

Imagine uncovering the quality of every single disclosure and notification. Imagine developing a longer-term strategy to keep your entire contact center ahead of regulatory trends.

Reach out to Prodigal to start clearing your path toward compliance and peace of mind.