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Comment for 1026.34 - Notice for Validation of Debts

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34(a) Validation information required.

34(a)(1) In general.

1. Deceased consumers. Section 1006.34(a)(1) generally requires a debt collector to provide the validation information required by § 1006.34(c) either by sending the consumer a validation notice in the manner required by § 1006.42, or by providing the information orally in the debt collector’s initial communication. If the debt collector knows or should know that the consumer is deceased, and if the debt collector has not previously provided the validation information to the deceased consumer, a person who is authorized to act on behalf of the deceased consumer’s estate operates as the consumer for purposes of § 1006.34(a)(1). In such circumstances, to comply with § 1006.34(a)(1), a debt collector must provide the validation information to an individual that the debt collector identifies by name who is authorized to act on behalf of the deceased consumer’s estate.

34(b) Definitions.

34(b)(2) Initial communication.

1. Bankruptcy proofs of claim. Section 1006.34(b)(2) defines initial communication and states that the term does not include a communication in the form of a formal pleading in a civil action. A proof of claim that a debt collector files in a bankruptcy proceeding in accordance with the requirements of the United States Bankruptcy Code (Title 11 of the U.S. Code) is a communication in the form of a formal pleading in a civil action and therefore is not an initial communication for purposes of § 1006.34.

34(b)(3) Itemization date.

1. In general. Section 1006.34(b)(3) defines itemization date for purposes of § 1006.34. Section 1006.34(b)(3) states that the itemization date is any one of five reference dates for which a debt collector can ascertain the amount of the debt. The reference dates are the last statement date, the charge-off date, the last payment date, the transaction date, and the judgment date. A debt collector may select any of these dates as the itemization date to comply with § 1006.34. Once a debt collector uses a reference date for a debt in a communication with a consumer, the debt collector must use that reference date for that debt consistently when providing the information required by § 1006.34(c) to that consumer. For example, if a debt collector uses the last statement date to determine and disclose the account number associated with the debt pursuant to § 1006.34(c)(2)(iv), the debt collector may not use the charge-off date to determine and disclose the amount of the debt pursuant to § 1006.34(c)(2)(vii).

2. Subsequent debt collectors. When selecting an itemization date pursuant to § 1006.34(b)(3), a debt collector may use a different reference date than a prior debt collector who attempted to collect the debt.

Paragraph 34(b)(3)(i).

1. Last statement date. Under § 1006.34(b)(3)(i), the last statement date is the date of the last periodic statement or written account statement or invoice provided to the consumer by a creditor. For purposes of § 1006.34(b)(3)(i), the last statement may be provided by a creditor or a third party acting on the creditor’s behalf, including a creditor’s service provider. However, a statement or invoice provided by a debt collector is not a last statement for purposes of § 1006.34(b)(3)(i), unless the debt collector is also a creditor.

Paragraph 34(b)(3)(iii).

1. Last payment date. Under § 1006.34(b)(3)(iii), the last payment date is the date the last payment was applied to the debt. A third-party payment applied to the debt, such as a payment from an auto repossession agent or an insurance company, can be a last payment for purposes of § 1006.34(b)(3)(iii).

Paragraph 34(b)(3)(iv).

1. Transaction date. Section 1006.34(b)(3)(iv) provides that the itemization date may be the date of the transaction that gave rise to the debt. The transaction date is the date that the good or service that gave rise to the debt was provided or made available to the consumer. For example, the transaction date for a debt arising from a medical procedure may be the date the medical procedure was performed, and the transaction date for a consumer’s gym membership may be the date the membership contract was executed. In some cases, a debt may have more than one transaction date. This could occur, for example, if a contract for a service is executed on one date and the service is performed on another date. If a debt has more than one transaction date, a debt collector may use any such date as the transaction date for purposes of § 1006.34(b)(3)(iv), but the debt collector must use whichever transaction date is selected consistently, as described in comment 34(b)(3)–1.

34(b)(5) Validation period.

1. Assumed receipt of validation information. Section 1006.34(b)(5) defines the validation period as the period starting on the date that a debt collector provides the validation information required by § 1006.34(c) and ending 30 days after the consumer receives or is assumed to receive it. Section 1006.34(c)(3)(i) through (iii) requires statements that specify the end date of the validation period. If a debt collector provides the validation information in writing or electronically, then, at the time that the debt collector calculates the validation period end date, the debt collector will know only the date on which the consumer is assumed to receive the validation information. In such cases, the debt collector may use that date to calculate the validation period end date even if the debt collector later learns that the consumer received the validation information on a different date.

2. Updated validation period. If a debt collector sends a subsequent validation notice to a consumer because the consumer did not receive the original validation notice and the consumer has not otherwise received the validation information required by § 1006.34(c), the debt collector must calculate the end date of the validation period specified in the § 1006.34(c)(3) disclosures based on the date the consumer receives or is assumed to receive the subsequent validation notice. For example, assume a debt collector sends a consumer a validation notice on January 1, and that notice is returned as undeliverable. After obtaining accurate location information, the debt collector sends the consumer a subsequent validation notice on January 15. Pursuant to § 1006.34(b)(5), the end date of the validation period specified in the § 1006.34(c)(3) disclosures is based on the date the consumer receives or is assumed to receive the validation notice sent on January 15.

34(c) Validation information.

34(c)(1) Debt collector communication disclosure.

1. Statement required by § 1006.18(e). Section 1006.34(c)(1) provides that validation information includes the statement required by § 1006.18(e). Section 1006.18(e)(1) requires a debt collector to disclose in its initial communication that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose. Section 1006.18(e)(2) requires a debt collector to disclose in each subsequent communication that the communication is from a debt collector. A debt collector who provides a validation notice as described in § 1006.34(a)(1)(i)(A) complies with § 1006.34(c)(1) by providing on the validation notice the disclosure required by § 1006.18(e)(1). A debt collector who provides a validation notice as described in § 1006.34(a)(1)(i)(B) complies with § 1006.34(c)(1) by providing either the disclosure required by § 1006.18(e)(1) or the disclosure required by § 1006.18(e)(2). The following example illustrates the rule:

i. ABC debt collector has an initial communication with the consumer by telephone. Within five days of that initial communication, ABC debt collector sends the consumer a validation notice using Model Form B–1 in appendix B to this part. ABC debt collector has complied with § 1006.34(c)(1) even though Model Form B–1 includes the disclosure described in § 1006.18(e)(1) rather than the disclosure described in § 1006.18(e)(2).

34(c)(2) Information about the debt.

Paragraph 34(c)(2)(i).

1. Debt collector’s name. Section 1006.34(c)(2)(i) provides, in part, that validation information includes the debt collector’s name. A debt collector may disclose its trade or doing-business-as name, instead of its legal name.

2. Debt collector’s mailing address. Section 1006.34(c)(2)(i) provides, in part, that validation information includes the mailing address at which the debt collector accepts disputes and requests for original-creditor information. A debt collector may disclose a vendor’s mailing address, if that is an address at which the debt collector accepts disputes and requests for original-creditor information.

Paragraph 34(c)(2)(ii).

1. Consumer’s name. Section 1006.34(c)(2)(ii) provides, in part, that validation information includes the consumer’s name. To satisfy the requirement to provide this validation information, a debt collector must disclose the version of the consumer’s name that the debt collector reasonably determines is the most complete and accurate version of the name about which the debt collector has knowledge. A debt collector does not disclose the most complete and accurate version of the consumer’s name if the debt collector omits known name information in a manner that creates a false, misleading, or confusing impression about the consumer’s identity. For example, assume the creditor provides the consumer’s first name, middle name, last name, and name suffix to the debt collector. In this scenario, the debt collector would reasonably determine that the most complete and accurate version of the consumer’s name about which the debt collector has knowledge includes the first name, middle name, last name, and name suffix. If the debt collector omits any of this information, the debt collector has not satisfied the requirement to provide the consumer’s name pursuant to § 1006.34(c)(2)(ii).

Paragraph 34(c)(2)(iii).

1. Creditor’s name. Section 1006.34(c)(2)(iii) provides that, if a debt collector is collecting debt related to a consumer financial product or service as defined in § 1006.2(f), validation information includes the name of the creditor to whom the debt was owed on the itemization date. Pursuant to § 1006.34(c)(2)(iii), a debt collector may disclose this creditor’s trade or doing-business-as name, instead of its legal name.

Paragraph 34(c)(2)(iv).

1. Account number truncation. Section 1006.34(c)(2)(iv) provides that validation information includes the account number, if any, associated with the debt on the itemization date, or a truncated version of that number. If a debt collector uses a truncated account number, the account number must remain recognizable. For example, a debt collector may truncate a credit card account number so that only the last four digits are provided.

Paragraph 34(c)(2)(v).

1. Creditor’s name. Section 1006.34(c)(2)(v) provides that validation information includes the name of the creditor to whom the debt currently is owed. A debt collector may disclose this creditor’s trade or doing-business-as name, instead of its legal name.

Paragraph 34(c)(2)(vii).

1. Amount of the debt on the itemization date. Section 1006.34(c)(2)(vii) provides that validation information includes the amount of the debt on the itemization date. The amount of the debt on the itemization date includes any fees, interest, or other charges owed as of that date.

Paragraph 34(c)(2)(viii).

1. Itemization of the debt. Section 1006.34(c)(2)(viii) provides that validation information includes an itemization of the current amount of the debt reflecting interest, fees, payments, and credits since the itemization date. If providing a validation notice, a debt collector must include fields in the notice for all of these items even if none of the items have been assessed or applied to the debt since the itemization date. A debt collector may indicate that the value of a required field is “0,” “none,” or may state that no interest, fees, payments, or credits have been assessed or applied to the debt; a debt collector may not leave a required field blank.

2. Itemization required by other applicable law. If a debt collector is required by other applicable law to provide an itemization of the current amount of the debt with the validation information, the debt collector may comply with § 1006.34(c)(2)(viii) by disclosing the itemization required by other applicable law in lieu of the itemization described in § 1006.34(c)(2)(viii), if the itemization required by other applicable law is substantially similar to the itemization that appears on Model Form B–1 in appendix B to this part.

3. Itemization on a separate page. Section 1006.34(c)(2)(viii) provides that a debt collector may disclose the itemization of the current amount of the debt on a separate page provided in the same communication with a validation notice if the debt collector includes on the validation notice, where the itemization would have appeared, a statement referring to that separate page. A debt collector may comply with the requirement to refer to the separate page by, for example, including on the validation notice the statement, “See the enclosed separate page for an itemization of the debt,” situated next to the information about the current amount of the debt required by § 1006.34(c)(2)(ix).

4. Debt collectors collecting multiple debts. A debt collector who combines multiple debts on a single validation notice complies with § 1006.34(c)(2)(viii) by disclosing either a single, cumulative itemization on the validation notice or a separate itemization of each debt on a separate page or pages provided in the same communication as the validation notice.

Paragraph 34(c)(2)(ix).

1. Current amount of the debt. Section 1006.34(c)(2)(ix) provides that validation information includes the current amount of the debt (i.e., the amount as of when the validation information is provided). For residential mortgage debt subject to Regulation Z, 12 CFR 1026.41, a debt collector may comply with the requirement to provide the current amount of the debt by providing the consumer the total balance of the outstanding mortgage, including principal, interest, fees, and other charges.

2. Debt collectors collecting multiple debts. A debt collector who combines multiple debts on a single validation notice complies with § 1006.34(c)(2)(ix) by disclosing on the validation notice a single cumulative figure that is the sum of the current amount of all the debts.

34(c)(3) Information about consumer protections.

Paragraph 34(c)(3)(v).

1. Electronic communication media. Section 1006.34(c)(3)(v) provides that, if the debt collector provides the validation notice electronically, validation information includes a statement explaining how a consumer can, as described in paragraphs (c)(4)(i) and (ii) of this section, dispute the debt or request original-creditor information electronically. A debt collector may provide the information required by § 1006.34(c)(3)(v) by including the statements, “We accept disputes electronically at,” using that phrase or a substantially similar phrase, followed by an email address or website portal that a consumer can use to take the action described in § 1006.34(c)(4)(i), and “We accept original creditor information requests electronically,” using that phrase or a substantially similar phrase, followed by an email address or website portal that a consumer can use to take the action described in § 1006.34(c)(4)(ii). If a debt collector accepts electronic communications from consumers through more than one medium, such as by email and through a website portal, the debt collector is required to provide information regarding only one of these media but may provide information on any additional media.

34(c)(4) Consumer-response information.

1. Prompts. If the validation information is provided in writing or electronically, a prompt required by § 1006.34(c)(4) may be formatted as a checkbox as in Model Form B–1 in appendix B to this part.

34(c)(5) Special rule for certain residential mortgage debt.

1. In general. Section 1006.34(c)(5) provides that, for residential mortgage debt, if a periodic statement is required under Regulation Z, 12 CFR 1026.41, at the time a debt collector provides the validation notice, a debt collector need not provide the validation information required by § 1006.34(c)(2)(vi) through (viii) if the debt collector provides the consumer, in the same communication with the validation notice, a copy of the most recent periodic statement provided to the consumer under 12 CFR 1026.41(b), and the debt collector includes on the validation notice, where the validation information required by paragraphs (c)(2)(vi) through (viii) of this section would have appeared, a statement referring to that periodic statement. A debt collector may comply with the requirement to refer to the periodic statement in the validation notice by, for example, including on the validation notice the statement, “See the enclosed periodic statement for an itemization of the debt.”

34(d) Form of validation information.

34(d)(2) Safe harbor.

1. In general. A debt collector who provides a validation notice that is neither a notice described in § 1006.34(d)(2)(i) or (ii), nor a substantially similar notice as described in § 1006.34(d)(2)(iii), does not receive a safe harbor for compliance with the information and form requirements of § 1006.34(c) and (d)(1).

34(d)(2)(i) In general.

1. Disclosure required by § 1006.18(e). Section 1006.18(e)(1) requires a debt collector to disclose in its initial communication that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose. Section 1006.18(e)(2) requires a debt collector to disclose in each subsequent communication that the communication is from a debt collector. Model Form B–1 in appendix B to this part includes the disclosure required by § 1006.18(e)(1). A debt collector who uses Model Form B–1 to provide a validation notice as described in § 1006.34(a)(1)(i)(B) may replace the disclosure required by § 1006.18(e)(1) with the disclosure required by § 1006.18(e)(2) without losing the safe harbor described in § 1006.34(d)(2). See comment 34(c)(1)–1 for further guidance related to providing the disclosure required by § 1006.18(e) on a validation notice.

34(d)(2)(iii) Substantially similar form.

1. Substantially similar form. Pursuant to § 1006.34(d)(2)(iii), a debt collector who uses Model Form B–1 as described in § 1006.34(d)(2)(i) may make changes to the form and retain the safe harbor for compliance with the information and form requirements of § 1006.34(c) and (d)(1) provided that the form remains substantially similar in substance, clarity, and meaningful sequence to Model Form B–1. Permissible changes include, for example:

i. Modifications to remove language that could suggest liability for the debt if such language is not applicable. For example, if a debt collector sends a validation notice to a person who is authorized to act on behalf of the deceased consumer’s estate (see comment 34(a)(1)–1), and that person is not liable for the debt, the debt collector may use the name of the deceased consumer instead of “you”;

ii. Relocating the consumer-response information required by § 1006.34(c)(4) to facilitate mailing;

iii. Adding barcodes or QR codes, as long as the inclusion of such items does not violate § 1006.38(b);

iv. Adding the date the form is generated; and

v. Embedding hyperlinks, if delivering the form electronically.

34(d)(3) Optional disclosures.

34(d)(3)(i) Telephone contact information.

1. In general. Section 1006.34(d)(3)(i) permits a debt collector to include telephone contact information. Telephone contact information may include, for example, a telephone number as well as the times that the debt collector accepts consumer telephone calls.

34(d)(3)(iv) Disclosures under applicable law.

34(d)(3)(iv)(A) Disclosures on the reverse of the validation notice.

1. In general. Section 1006.34(d)(3)(iv)(A) permits, in relevant part, a debt collector to include on the reverse of the validation notice any disclosures that are specifically required by, or that provide safe harbors under, applicable law. If a debt collector provides a validation notice in the body of an email, the debt collector may, in lieu of including the disclosures permitted by § 1006.34(d)(3)(iv)(A) on the reverse of the validation notice, include them in the same communication below the content of the validation notice. Disclosures permitted by § 1006.34(d)(3)(iv)(A) include, for example, specific disclosures required by Federal, State, or municipal statutes or regulations, and specific disclosures required by judicial or administrative decisions or orders, including administrative consent orders. Such disclosures could include, for example, time-barred debt disclosures and disclosures that the current amount of the debt may increase or vary due to interest, fees, or other charges, provided that such disclosures are specifically required by applicable law.

2. Statement referring to disclosures. If a debt collector includes disclosures pursuant to § 1006.34(d)(3)(iv)(A), the debt collector must include a statement on the front of the validation notice referring to those disclosures. A debt collector may comply with the requirement to refer to the disclosures by including on the front of the validation notice the statement, “Notice: See reverse side for important information,” or a substantially similar statement. If, as permitted by comment 34(d)(3)(iv)(A)–1, a debt collector places the disclosures below the content of the validation notice, the debt collector may comply with the requirement to refer to the disclosures by stating, “Notice: See below for important information,” or a substantially similar statement.

34(d)(3)(iv)(B) Disclosures on the front of the validation notice.

1. In general. Section 1006.34(d)(3)(iv)(B) provides, in relevant part that, if a debt collector is collecting time-barred debt, the debt collector may include on the front of the validation notice any time-barred debt disclosure that is specifically required by, or that provides a safe harbor under, applicable law, provided that applicable law specifies the content of the disclosure. For example, if applicable State law requires a debt collector who is collecting time-barred debt to disclose to the consumer that the law limits how long a consumer can be sued on a debt and that the debt collector cannot or will not sue the consumer to collect it, the debt collector may include that disclosure on the front of the validation notice. See § 1006.26(a)(2) for the definition of time-barred debt. For purposes of § 1006.34(d)(3)(iv)(B), time-barred debt disclosures may include disclosures about revival of debt collectors’ right to bring a legal action to enforce the debt.

34(d)(3)(vi) Spanish-language translation disclosures.

Paragraph 34(d)(3)(vi)(A).

1. Supplemental information in Spanish. Section 1006.34(d)(3)(vi)(A) permits a debt collector to include supplemental information in Spanish that specifies how a consumer may request a Spanish-language validation notice. For example, a debt collector may include a statement in Spanish that a consumer can request a Spanish-language validation notice by telephone or email, if the debt collector accepts consumer requests through those communication media.

Paragraph 34(d)(3)(vii).

1. Merchant brand. Section 1006.34(d)(3)(vii) permits a debt collector to include the merchant brand, if any, associated with debt. For example, assume that a debt collector is attempting to collect a consumer’s credit card debt. The credit card was issued by ABC Bank and was co-branded XYZ Store. “XYZ Store” is the merchant brand.

2. Affinity brand. Section 1006.34(d)(3)(vii) permits a debt collector to include the affinity brand, if any, associated with the debt. For example, assume that a debt collector is attempting to collect a consumer’s credit card debt. The credit card was issued by ABC Bank, and the logo for the College of Columbia appears on the credit card. “College of Columbia” is the affinity brand.

3. Facility name. Section 1006.34(d)(3)(vii) permits a debt collector to include the facility name, if any, associated with the debt. For example, assume that a debt collector is attempting to collect a consumer’s medical debt. The medical debt relates to a treatment that the consumer received at ABC Hospital. “ABC Hospital” is the facility name.

34(e) Translation into other languages.

1. Safe harbor for complete and accurate translation. Section 1006.34(e) provides, among other things, that, if a debt collector sends a consumer a validation notice translated into a language other than English, the translation must be complete and accurate. The language of a validation notice that a debt collector obtains from the Bureau’s website is considered a complete and accurate translation. Debt collectors are permitted to use other validation notice translations if they are complete and accurate.