Funny thing about perceptions. Lenders have them, consumers have them, and yes, regulators have them. In 1968, times were different, perceptions were different, and a gregarious entrepreneur named Larry Flynt took on the conservative views regarding pornography held by of Reverend Jerry Falwell in the case of Flynt v Falwell. Just prior to the Flynt v Falwell case, in 1964, was a famous case (often thought to be linked to Larry Flynt) where Justice Potter Stewart in Jacobellis v. Ohio, provided his thoughts on pornography as, “I know it when I see it”!
What do rulings on pornography have to do with consumer convenience and Unfair Deceptive and Abusive Acts and Practices (“UDAAP”)?
Everything. Because perception is everything in relation to UDAAPs.
The UDAAP standard arguably evolved in 1938 whereby, if the FTC had no other law violation finding, they could fall back on claiming conduct as “unfair” or “deceptive” under Section 5 of the Federal Trade Commission Act (FTC Act). More recently, the CFPB under title X of the Dodd–Frank Wall Street Reform and Consumer Protection Act was granted rulemaking and enforcement authority over financial institutions with respect to “unfair, deceptive, or abusive acts or practices.”
As we all know, the CFPB rolled out the Notice of Proposed Rulemaking (NPRM) on Debt Collection Practices. The NPRM has a hint to creditors about UDAAPs. The hint appears in a footnote related to the proposed rule on call volumes wherein the CFPB in footnote 331 states:
The Bureau has not determined in connection with this proposal whether telephone calls in excess of the limit in proposed § 1006.14(b)(2)(ii) by creditors and others not covered by the FDCPA would constitute an unfair act or practice under Dodd-Frank Act 1031(c) if engaged in by those persons, rather than by an FDCPA-covered debt collector. (NPRM at 156).
Sounds like Justice Potter Stewart has been resurrected in the form of a CFPB Enforcement Attorney holding a UDAAP claim in abeyance for just “the right moment” and they will “know it when they see it”. That is the problem.
Creditors, to enjoy some peace of mind, should have a solution to avoid a CFPB UDAAP perception that they are calling consumers an excessive amount of time. For fun and a reality check, lets extend this discussion to where the word “inconvenience” actually resides in the Fair Debt Collection Practices Act (“FDCPA”)— call times of day.
Even for more fun, let’s assume that the CFPB will extend UDAAP findings to creditors in relation to the newer forms of “NPRM allowable” communications with consumers— texts and emails – volume and times of day.