Federal law prohibits a debt collector from telling a credit reporting agency about a debt before either speaking to the consumer or sending a debt validation notice and ensuring it's delivered.
By Amy Loftsgordon, Attorney · University of Denver Sturm College of Law
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The Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. § 1692 and following) protects consumers from abusive debt collectors. This federal law limits what collectors can and can't do when collecting debts.
In 2021, the Consumer Financial Protection Bureau (CFPB) issued a rule for debt collectors limiting when a collector can report information about a debt to credit reporting agencies. This law prohibits a debt collector from telling a credit reporting bureau about a debt before either speaking to the consumer or sending a debt validation notice and then waiting to make sure it's delivered.
When Debt Collectors Can Report a Debt to the Main Credit Bureaus
Effective November 30, 2021, an amendment to Regulation F, which implements the FDCPA, says that a debt collector can't report a debt to the three major credit reporting agencies, Equifax, Experian, and TransUnion, before first contacting the consumer.
Specifically, before reporting a debt to a credit reporting agency, the debt collector must:
- speak to the consumer in person or by phone, or
- mail a letter or send an electronic message, like an email, about the debt to the consumer and then wait a "reasonable period of time" (at least 14 consecutive days) to see if a notice of undeliverability comes back.
If the collector gets a notice that the letter or message was undeliverable, the collector can't report the debt to the credit reporting agencies unless it achieves communication as detailed above. (12 C.F.R. § 1006.30(a)(1) and Official Interpretation of 30(a)(1)).
Example. A debt collector sends you a debt validation notice about a credit card debt. After not receiving a notice of undeliverability within 14 days, the collector goes ahead and reports the debt to the credit reporting bureaus. Then, on day 15, the debt collector gets the letter back as undeliverable. Under the amended FDCPA, the debt collector has not violated the law. The debt collector may furnish the debt information to the credit reporting agencies if it doesn't receive a notice of undeliverability during the 14-day window. But if the collector received the notice of undeliverability on day 13, it would be prohibited from reporting the debt to the agencies until after satisfying the requirements described above.
Exception to the Prohibition on Reporting the Debt to Credit Bureaus
However, the prohibition on reporting the debt doesn't apply "to a debt collector's furnishing of information about a debt to a nationwide specialty consumer reporting agency that compiles and maintains information on a consumer's check writing history." (Specialty consumer reporting agencies, also called "specialty credit reporting agencies," keep records on particular types of transactions, like tenant histories, insurance claims, and check writing histories.)
If you're concerned about the information that a specialty credit reporting agency has about you, you can get a free credit report each year from each agency. To get a list of most credit reporting agencies and contact information for those agencies, categorized by type, go to the Consumer Financial Protection Bureau website.
These reports are in addition to your yearly free credit report from each of the three main nationwide credit reporting agencies.
Talk to a Lawyer
If you think a debt collector has violated the FDCPA when trying to collect a debt from you, consider talking to an attorney to get advice about your options. If a collector violates the FDCPA, you might be able to use the violation to negotiate a favorable settlement or as a defense to a collections lawsuit.
