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Challenge

When a third-party debt collector acquires a debt, they are legally required to send the consumer a notice alerting them to the debt and payment instructions. However, the quality and clarity of these forms varied wildly across collectors, often confusing consumers. CFPB took on the task of creating a model notice that would make the complicated and confusing nature of third-party debt collection as clear to the consumer as possible, while also informing the consumer of their legal rights within the debt collection process.

Process

CFPB partnered with Fors Marsh Group to conduct a multi-stage research process to develop optimal versions of these forms. First, focus groups were conducted with consumers who had been through the debt collection process, to get a better understanding of the kinds of issues consumers may have faced with the process and with notices in the past. Then three rounds of in-depth interviews were conducted with consumers—the first round focused on cognitive testing of the different language and terms in the debt collection process, while subsequent rounds focused on usability testing of iterative drafts of a model notice. FMG worked with a form designer to create multiple versions of the draft forms, and eye tracking was used during sessions to further examine how consumers interacted with the materials. 

Impact

Model forms, developed through a rigorous research process, will provide a resource for third-party debt collectors to use when they contact consumers. These forms will help ensure that consumers understand their rights and next steps when they receive such a notice.

Partner With FMG

Justin Baer

Justin Baer

Vice President, Public Policy Evaluation

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