Debt collection compliance is always evolving and changing. New regulations, administration shifts and court rulings are constantly shifting the industry landscape like the tide on a beach. This year in 2025, we saw no shortage of collections compliance updates that changed the way businesses interact with consumers.
From rules around undisclosed fees to states stepping up debt collection regulations, we’re going to cover five debt collection compliance updates that happened in 2025.
1. The Non-Partisan Push Back Against Undisclosed or Excessive Fees
This year, there was a continued, non-partisan, push against “junk fees.” While it started off as a Consumer Financial Protection Bureau (CFPB) initiative, it’s now evolved to a big priority at the state level. State attorney generals across the country are using Unfair and Deceptive Acts and Practices (UDAAP) theories to target fees they feel are unclear, excessive, or undisclosed. The crackdown continues to occur across product lines, for fees related to in car transactions, hotel bookings, concert tickets and more.
Additionally, we are seeing fee laws created. An example is Massachusetts’ Unfair and Deceptive Fee law that requires an “all-in” price to be presented upfront. The law also put restrictions into place on recurring fee subscriptions and limits auto-renewals to businesses due to consumer inaction.
For debt collection, you always want to avoid dark patterns, and if you are charging fees, make sure that you are clearly disclosing all fees, that the fees are authorized by the underlying contract or state law, and that they’re a reasonable reflection of the cost. And, even if you aren’t charging any fees, you should use a UDAAP lens when reviewing your online flows to ensure that you are disclosing all-in pricing.
2. More Collections Compliance Has Shifted to the States
Over the course of 2025, we’ve seen the CFPB take a step back and reduce their oversight activities. This has prompted many states across the country to step in and fill the void. More states have enacted new debt collection laws and regulations, creating a nuanced patchwork of compliance standards. Here’s a look at the top finalized debt collection compliance rules by states in 2025:
- California’s Debt Collection Licensing Act (DCLA): New regulations took effect on July 1, 2025 that require debt collectors to be licensed by the California Department of Financial Protection and Innovation (DFPI). Under this law, debt collectors also have to submit annual reporting to the DFPI and it provides a new way to calculate “Net Proceeds” for state assessment fees.
- Wisconsin Updated Financial Service Statutes: Effective at the start of 2025, Wisconsin updated statutes that regulate collection agencies. The new law requires these debt collectors to use the National Multistate Licensing System (NMLS).
- Massachusetts Setting New Debt Relief Standards: The Debt Collection Fairness Act (DCFA) was passed by the state in July 2025. This legislation widened the protection offered to consumers in debt collection. It notably reduced the post-judgement interest rate for consumers from 12% to 3%, put a 5-year statute of limitations in place and banned imprisonment for unpaid consumer debt in the state.
3. Collections Compliance – FDCPA Litigation on Preference vs Convenience
The Fair Debt Collection Practices Act (FDCPA) litigation in 2025 had a core theme of drawing the distinction between a consumer expressing a preference to receive communications versus declaring inconvenient times and places. Throughout the year, most courts found that a request for a preferred communication channel is not the same as saying a time or place is “inconvenient” under FDCPA.
For example, when a consumer received a physical letter from a collector when they requested an email was deemed permissible in most cases. However, there’s perhaps one notable exception in a pending case where a dismissal wasn’t granted. The consumer in this case used specific language saying that “home is an inconvenient place.” Here, the Court found the language specific enough to survive the motion to dismiss. But, keep an eye out, as this case is still ongoing..
Debt collection compliance rules that are this nuanced require training. Staff and AI (when used) need to be able to pick up on when a consumer is expressing a preference, or specifically invoking the inconvenient time and place rule laid out in FDCPA. It’s important for this process to regularly review FDCPA court rulings and identify keywords consumers are using when communicating inconvenient times and places.
4. New Collections Compliance Rules for Consent Under TCPA
The Federal Communications Commission (FCC) enacted a revised proposal for rulemaking covering a plethora of topics under the Telephone Consumer Protection Act (TCPA), perhaps most important for the debt collection industry is the proposal that would undo the “revoke all rule” set to take effect in April 2026. The revoke all rule requires companies to stop using a phone number entirely even if the consumer only opts out of communications in a particular channel, so if a consumer replied STOP to a text message the rule would require the business to also not make phone calls to that number.
Additionally on the potential chopping block is the Order permitting consumers to revoke their consent to be called using an automated telephone dialing system (ATDS) in “any reasonable manner.” Today, debt collectors need to honor any reasonable requests even if the revocation doesn’t follow the specific method for opt-out explained in the message. For example, if a collector’s text says “reply with STOP to opt out of our communications,” a consumer is allowed to respond with other words that must be reviewed by the collector to determine whether the language used is a request to opt-out.
Probably the most interesting development in the TCPA area is the Supreme Court decision in McGlaughlin v. McKesson, making clear that the federal courts do not have to rely on the FCC’s Orders. As a result, we have already seen two court decisions choosing not to follow the FCC’s guidance on text messages. These courts have found that text messages are not phone calls and thus not covered by the TCPA, despite longstanding FCC guidance to the contrary. This likely means we will see more TCPA cases in the coming year where the parties make arguments against longstanding FCC Orders.
5. Increased Priority on Data Security and AI Regulations
There’s been increased pressure this year from federal and state government bodies to protect consumers from data breaches. This has a direct impact on new AI laws that are being introduced at the state level for businesses and systems in financial sectors. With regard to data breach enforcement activity, it’s followed two main principles this year:
- Companies Can’t Overpromise: If a company makes a security marketing claim such as “top performing security or award winning protection,” regulators are likely going to test those claims to ensure they’re true.
- Prioritize Security: Convenience features like websites that pull data from other sources to fill out forms for consumers have to be designed with robust security. These convenience features can become vulnerabilities if they’re not made more secure by businesses using them.
Multiple state AI laws have taken effect this year, with Colorado, Texas and Utah implementing regulations that companies have to follow. In Colorado, businesses have to disclose when they’re using high-risk AI systems with consumers. And in Utah, companies need to be transparent when using generative AI assets. This has led to more businesses creating a documented AI policy that addresses how each of these nuances is handled.
Retain Helps You Stay Ahead of Debt Collection Compliance Shifts
Experts in collections compliance think that 2026 is poised to have just as many, if not more, updates for businesses to keep track. In fact, more states are expected to put forward new compliance rules with the CFPB facing headwinds next year.
The good news is that debt collectors can use software like Retain to stay ahead of the curve. Retain by TrueML products is debt collection software with built-in advanced compliance functionality like setting disclosures by state, and is informed by industry legal experts with an eye toward the latest changes in requirements. Contact our team today to schedule a consultation.
