The Correct Answers to Questions about the Limited Content Message and Model Validation Notice (The Debt Collection Drill Videocast)

Although debt collectors had a full year and more than 1,000 pages of CFPB guidance to assist in preparing for Regulation F, some facets of this new law remain murky. Many debt collectors are unclear if the Zortman phone message may still be used after implementation of Regulation F or does the limited content message (LCM) replace it? Further, questions arise daily about the permissible extent of modifications to the model validation notice (MVN), especially when collecting on multiple debts for the same obligor.

In the latest episode of The Debt Collection Drill videocast, Moss & Barnett attorneys John Rossman and Mike Poncin break down the differences between the Zortman message and the LCM, including acceptable uses. In addition, the attorneys examine the allowed scope of potential modifications to the MVN, specifically focusing on the inclusion of debits in the itemization and placement of a payment portal web address on the notice.


Speaker 1: (00:04)
Welcome to the Debt Collection Drill, the video cast featuring Moss & Barnett shareholders, John Rossman, and Mike Poncin, providing sage tips for collection and compliance.

Mike Poncin: (00:18)
Hello, everybody. Welcome again to another exciting and new edition of the Debt Collection Drill. I'm Mike Poncin. And with me as always is my co-host John Rossman.

John Rossman: (00:26)
Thank you, Mike. We have a really exciting episode for today. Really the number one change to the debt collection laws here in the United States in the past 50 years is Regulation F and we've had a lot of questions, a lot of comments, a lot of hand ringing about Regulation F. Ultimately, the regulation went into effect in November 30th, 2021. And we know a lot of clients are still looking at complying with that. But Mike wanted to take some time to talk about some specific provisions of Regulation F that have been causing some concern and some questions for our clients. And Mike, I want to start with a limited content message. As you know before the Regulation F, there was some question as to whether or not a debt collector could leave a voicemail message. Mike, what was the law pro-Regulation F as it related to debt collector leaving a voicemail?

Mike Poncin: (01:16)
Well, It's got a long and stressful history. You think 20 years ago when you would leave a message, you were told to leave a message saying, "This is Mike I'm calling Joe Smith. Please give me a call back." And most folks in the industry said that was great. Consumer attorney said that was great. Then there was the Foti lawsuit which came out and said, you're not disclosing that you're a debt collector, it's violating the law. So in light of 40, there were changes being made, where now you have to set forth that you're a debt collector. You have to include your name, your callback, your information, setting forth that the intent is to collect a debt. And if you didn't do that, you were not complying with the law.

Mike Poncin: (01:56)
The Zortman case came along a few years back, which provided a alternative where you set forth the name of your agency but you did not name the consumer. And a court here in Minnesota found that was not a communication under the FDCPA and that that type of voice message would be fine. So a lot of debt collectors started using the Zortman-type message and that's existed up until the new Regulation F kicked in just recently.

John Rossman: (02:24)
So, Mike Regulation F and the Zortman message. So Regulation F proposes and authorizes what's called a limited content message. It's a message that a debt collector may leave by voicemail. You can't send it up by text. It's only by voicemail. It's a voicemail message that the debt collector may leave for a consumer that does not disclose that the communication is in connection with an attempt to collect a debt, does not disclose the name of the consumer but does disclose information about who's calling and request a callback number. And so that's the Regulation F CFPB fix to the Zortman-Foti issue is this limited content message. Mike, the question that's arisen for us recently from our clients has been... well, first of all, what I'm hearing is that limited content message can be confusing for some consumers.

John Rossman: (03:12)
The limited content message is so stripped down and so devoid of information that consumers will call back the number and say, well, I'm not going to tell you who I am because you haven't really given me a lot of information in your voicemail. So I know that initially there's been some concerns about this limited content message but I think more broadly, what agencies are questioning is whether or not they can continue to use the Zortman message. The biggest difference between the Zortman message and the limited content message is the disclosure that the caller is a debt collector. In Zortman, you disclose that you're a debt collector with a limited content message you do not. Mike, what kind of difference does that make impact-wise in your opinion on whether or not a message is a communication in connection with an attempt to collect a debt?

Mike Poncin: (04:02)
Well, and I believe the frequently asked questions that the CFPB has put out set forth that the Zortman is a communication, unlike the LCM message. So, if you're using Zortman... And that doesn't make it illegal. It specifically sets forth that you can still use Zortman but you're not entitled to the, I'll say, safe harbor but that's the wrong word, but it's not going to be treated as a non-message as the LCM would be. So, there is some risk using Zortman but there's nothing saying you cannot use Zortman at this time.

John Rossman: (04:31)
No, absolutely. I think that's right. I think where the concern is with this is that Regulation F suggested this one message, and oh my goodness, if we don't use this one message, we're going to be violating the FDCPA. Mike, I think the primary way that I look at Regulation F is as follows: There's certain information that we would include in certain disclosures that we would include in communications with consumers before Regulation F that we can continue to include now and violate the FDCPA.

John Rossman: (05:02)
And like you said, the Zortman message passed muster under the FDCPA for several years before Regulation F and I think it's a good argument to make that it continues to comply with the FDCPA but that question mark is in there with the CFPB issuing Regulation F and selecting a different message. I also do understand that there are some courts especially, in California that have taken the position that Zortman message is indeed a communication and connection with an attempt to collected debt. So, it puts you in a little different footing. But nonetheless, I think Regulation F has certainly opened the door for further discussion on that type of issue related to the messaging.

Mike Poncin: (05:47)
And that is a very good point. I'm glad you brought it up. With Zortman, the one thing I often told clients when they asked if they could use it was, well, definitely if you get sued and you're sued in Minnesota, and the same judge gets the case, you're going to be 100% safe or pretty close to a 100% safe. But it depends on the judge. We have no way of knowing how other judges will look at it but the CFPB has previously looked on it somewhat approvingly. So you do have that to back you but there could be problems using Zortman, so if you can use the LCM, it is a recommended way to go.

John Rossman: (06:20)
Yes, absolutely. And that's what we recommend. I think that this is going to continue to evolve. My prediction is that the CFPB at some point in the next year or two will review some provisions of Regulation F and perhaps make some tweaks. And one area where I think is right for tweaking will be that limited content message to perhaps include just a little more information so that the consumers have a little more data to decide whether or not to make a call back.

John Rossman: (06:46)
Mike, one area that debt collectors were concerned about, not just debt collectors, everyone was concerned was going to cause a lot of litigation was the 7-in-7 rule. The rule that you can only attempt to contact a consumer seven times within a seven-day period on a single account. Mike, we've seen some early cases abating involving the 7-in-7 rule that I wanted to talk to you about. And specifically, what we've seen is where the debt collector will make a certain number of outbound calls, say six, but then the debt collector will call inbound a few more times and actually to talk to the collector and try and throw off that seven and seven number. Well, you talk to me, so now you got to wait a week before you can talk to me again. Mike, what are your thoughts on how a court might approach that type of abating situation based on your experience in defending other baiting cases over the years?

Mike Poncin: (07:34)
Well, I think it's important, of course, everybody is recording their phone calls, so to be recording to show that these are incoming calls from the consumer to the debt collector, they're not calls being made by the debt collector. So, I think most courts are going to look at those as falling outside of the seven calls in seven day rule. So, I think you're definitely fine there but it is important to keep track of these calls. Another baiting thing would be setting somebody up and saying, "Hey, you can give me a call back between this time." And that would put you over your seven. Are you entitled to the exemption because they asked for a phone call during a certain timeframe but making sure you call during that timeframe. So, it does leave open the opportunity for consumers to try to set up debt collectors.

John Rossman: (08:21)
Mike, absolutely. And I agree and I want to emphasize a point that you made, which was when the debt collector has the consumer on the phone, the debt collector can certainly request permission to call the consumer back. 7-in-7 is a presumption but if the debtor says, yes, please call me back in response to the debt collector's inquiry that can open up that 7-in-7 rule. So I think when you look at your scripting and certainly in situations where the consumer wants to look at a payment plan or gather further information, those are situations where we definitely recommend that the debt collector affirmatively seek to get that consent from the consumer to contact the consumer again. Mike, one other issue, we're seeing a lot of questions about relates to the model validation notice. So in Regulation F, the CFPB dictated exactly word-for-word what your first debt collection notice should look like.

John Rossman: (09:10)
And that is the notice that must be used going forward. Some questions have arisen as to what we can include and exclude from that model validation notice and still take advantage of the safe harbor that's available in Regulation F for using that notice. Mike, and couple of questions that people have asked about it being, can we include the date of the letter? Because if you look through Regulation F and certainly the model validation notice, there's no date on that letter. So, let's unpack that question first. Absolutely. Yes. You can include a date on your letters. It would seem that the CFPB was inadvertent in excluding that from the model validation notice, but in my opinion, you have a consumer on the phone, you want to be able to refer to your initial notice, you want to be able to refer to the date on that notice. And so that's why we are recommending that if you can include the date of the notice on there.

John Rossman: (10:01)
Mike, a closer question is whether or not a debt collector may include a payment portal on that model validation notice. Here again, the commentary to Regulation F says you can include a website, but this is going a step further because you think website, well, that's going to share information about the debt collector, absolutely yes, but then the payment portal is specifically a place where a payment is requested. Mike, what are your thoughts on, generally speaking, a debt collector creating a model validation notice for a consumer and including their website and also a payment portal website address on that model validation notice?

Mike Poncin: (10:38)
It's a close call. It's an interesting question. And I look at it, you're allowed to include a website.

John Rossman: (10:43)

Mike Poncin: (10:43)
So, I'm inclined to pick one or the other instead of listing to... You may disagree, you may agree, but I look at it as if you're going to include the payment portal, maybe not include the other one, just include the one website.

John Rossman: (10:56)
And I love that approach. My thought was include the payment portal as part of your website. So you go to the ABC collection agency website and you click here to go to the payment portal. So, look, at the end of the day, kind of what I said earlier, things that didn't violate the Fair Debt Collection Practices Act before Regulation F should not violate the FDCPA now that we're post-Regulation F including a payment portal address on your model validation notice.

Mike Poncin: (11:27)
And to add on, we've received questions: What if the amount of the debt goes up because of insurance returns a payment or reverses it, there's no area set forth on the model validation notice to... There's room for credit but not debits. And so what do you do? Do you include it? And I say, yes. You want to be set forth the accurate amount. You want to have an accurate itemization. And I would think and I hope that's substantially similar to the model validation notice to give you safe harbor.

Mike Poncin: (11:58)
But the other issue is that, well, if it doesn't give you safe harbor, I think it's still better to have an accurate itemization to have your letter be truthful and easy to follow for the consumer because either way, if you have to litigate whether or not you're complying with the safe harbor or whether or not you're having an accurate itemization, you're still litigating it. So, again, what you could include in before Regulation F you're still allowed to do now, it's just that the model validation letter was intended to give you a template to try to make things easier.

John Rossman: (12:26)
Right. And Mike, I know a lot of times when you're litigating these cases and perhaps there's an argument being made that the debt collector has violated the law and there isn't a lot of precedent on it. Mike, a lot of times you rely on common sense when you're arguing these cases. And here again, looking at this from a common sense standpoint, what information would the consumer like to know or need to know to be able to make an informed decision about whether or not to pay this debt? That's kind of the standard I always use. We can look at FDCPA in case law but if you're looking at adding something like not only debits but debits and credits, certainly, that's going to make sense as an element of the debt that the consumer would like to be informed about.

John Rossman: (13:04)
Thank you, Mike. We are out of time for today but I'd like to thank you for another great episode of the Debt Collection Drill. You can find us on And we look forward to speaking with you next time. Thank you.

Speaker 1: (13:14)
This video is provided only as a general discussion of legal principles and ideas. Every situation is unique and must be reviewed by a licensed attorney to determine the appropriate application of the law to any particular fact scenario. If you have legal questions, consult with an attorney. The listener of this video cast will not rely upon anything herein as legal advice and will not substitute anything contained here in for obtaining legal advice from an attorney. No attorney-client relationship is formed by this video cast and Moss & Barnett assumes no liability for any errors contained herein or for changes in the law affecting anything discussed herein.