While industry professionals are used to navigating the changing compliance landscape, some newer factors are making it uniquely challenging. To help you start 2026 smart, we’ve put together the most important compliance trends to stay on top of to help set your digital debt collections up for success.

Telephone Consumer Protection Act Updates and Uncertainty

The Telephone Consumer Protection Act (TCPA) is primed to have a big role in debt collection compliance this year. For starters, the new “revoke all” rule had its waiver extended by the FCC until January 2027. This new rule makes it so if a consumer replies “stop” or opts out by text message, the collector would have to stop texts, calls, and prerecorded messages to that number. One of the reasons this was delayed is because some financial institutions successfully argued that they would need more time to sync opt outs across channels and business units. 

It’s important for debt collectors to keep an eye on when the “revoke all” rule will go into effect. The other rules of TCPA such as honoring keyword-based opt outs (like saying “cancel” instead of “stop”) are not impacted. This extension is a reminder to collectors who are using an omnichannel strategy to make sure their backend systems are prepared to stop communications across channels.

The Debate of if  A Text Message Considered a Phone Call Under TCPA

One big debt collection compliance trend to follow is if text messages are considered phone calls under TCPA. This has become a recent point of legal contention. Historically, the FCC has argued that text messages are “calls” which means they would have to follow TCPA restrictions. Following the Supreme Court’s decisions in Loper Bright (2024) and McLaughlin v. McKesson (2025), courts are no longer required to defer to the FCC’s interpretations. This led to the legal distinction being ruled on more by federal courts. 

There has recently been a developing split in federal courts regarding whether Do-Not-Call restrictions extend to SMS, making jurisdiction-specific strategies essential. For example, a Florida court dismissed Do-Not-Call claims ruling that a “text message” is not a “phone call” in Davis v. CVS Pharm., Inc. (2025).This court expressed how a normal person thinks of a text message and a phone call as two separate forms of communication. Another court in Ohio ruled similarly in Stockdale v. Skymount Prop. Grp, LLC (2026). 

The TCPA landscape is a bit hectic and time will tell how courts will view debt collection text messages in the future. This topic is a developing area of collection compliance that could shift back and forth before a concrete precedent is set.

New York’s FAIR Business Practices Act & Digital Debt Collections

In December of 2025, New York State signed into law the FAIR Business Practices Act. This law specifically expanded the power of the state’s Attorney General to target “abusive” acts along with “deceptive” actions that target consumers. It’s a law that is looking to step in for the diminished CFPB and debt collectors fall into its purview. 

There is one element of this law that digital debt collection strategies need to be aware of. To protect consumers, the FAIR Business Practices Act is looking to limit “digital exhaustion”. This is the coined term for when a business inundates a consumer with messages across digital communication channels. Since digital communications don’t always fall under Regulation F’s 7 in 7 rule (depending on the state), this legislation could set a new standard for the acceptable frequency of digital communications.

AI Governance and Transparency Becoming Standard

AI has reached widespread adoption in the debt collection and finance industries, with many businesses using it to optimize their recovery strategies. However, a new focus from regulators is on businesses being able to show how AI arrived at a decision. This makes “explainability logs” more critical than ever for AI tools. 

AI tools used in the debt collection industry are also facing increased requirements to run algorithm impact assessments (AIAs). An AIA is a way to prove that AI technology is ethically and fairly making decisions about consumers. This type of AI governance and transparency is becoming the standard for many state level regulations.

The Colorado AI Act & Digital Debt Collection

The Colorado Artificial Intelligence Act (CAIA), is set to take effect on June 30th, 2026. This legislation regulates “high-risk” AI systems that are a substantial factor in consequential decisions, such as those impacting financial or lending services, requiring robust “explainability” and bias testing. Even if you don’t do business in Colorado, this one is worth watching as it may provide a blueprint that other states follow. Here’s a list of the some major compliance requirements that will go into effect with this law in Colorado:

• Companies have to create an AI risk management program to help prevent discrimination. 

• Annual AI impact assessment will be required which needs to include risks of bias. 

• A business has to notify the Colorado Attorney General if an AI action causes discrimination within 90 days. 

• You have to disclose to consumers that they’re interacting with an AI system. 

To help prepare for these new compliance rules, businesses should be testing their AI for potential discriminatory outcomes. Another best practice is to create a list of all the AI and/or automated tools used by a business to streamline internal training and reviews.

Stay Ahead of Digital Collections Compliance with Retain

Retain white-label debt collection software is built with advanced compliance controls. Plus, it gets support from an expert legal team to help your business stay ahead of compliance and regulatory updates. If you want to recover more while spending less, find the right SaaS solution with the Retain team today. 

Plenty of businesses use Email Service Providers (ESPs) to send marketing messages, but email for debt collection needs a more hands-on approach. Let’s take a closer look at the key differences between ESPs and a digital partner.

ESPs Are Tools, Not A Complete Email Strategy

Many people have smartphones, but only a few use them to their full potential. With the right expertise, they can be used to run businesses, create works of art, and more. The same principle is true with ESPs, and there are plenty of business types where hitting send and monitoring more basic metrics can be enough. At their core, ESPs are just a tool, it takes expertise and knowledge to fully utilize their full potential, and even that may not be sufficient for debt collection purposes.

Every email is an opportunity for a repayment, and a business needs a reputable domain and reliable deliverability to make the most of those chances. There’s no shortage of issues that make it so emails aren’t delivered or seen. And, there’s no tool that has the answers to:

• Uncover how to get your collection emails to start inboxing again. 

• Diagnose why emails are being flagged and sent to spam folders by ESPs. 

• Analyze keywords and content likely to hurt your domain reputation. 

• Guide you through the best way to deal with complaints. 

• Provide tools to identify and mitigate data quality issues that hinder deliverability. 

This is where a digital partner can offer the most value. While the tool itself is a crucial starting point, an email expert takes collections strategies to the next level.

A Digital Partner Makes Email for Debt Collection More Effective

When you’re sending debt collection emails, there are a few common issues that arise. For starters, consumers are more likely to flag these messages as spam, which can hurt your domain reputation over time. Think of domain reputation as a technical “trust score” for your server, much like a “credit score”, it determines your access and reliability in the eyes of the ISPs. The more marks against you, the harder it will be to get your messages delivered to inboxes. For internet service providers (ISPs) spam clicks and complaints have a big impact on deliverability, and as a result, recovery outcomes. 

The right digital partner will have relationships with ISPs and ESPs to help your business get more detailed email performance insights. This partner could also provide technical advocacy and deliverability troubleshooting with ESPs and ISPs to ensure your legitimate collection communications reach the inbox.

Email for Debt Collection & List Hygiene

It’s common for debt portfolios (especially those bought by third parties) to have stale or inaccurate data. If you send emails to an inactive address or one that hasn’t been used in years, there’s a high chance of a “hard bounce” happening. Every bounced email hurts your domain reputation, and when enough happen, you could be penalized by ESPs. Email platforms let you monitor bounces, but it’s up to the user to maintain list hygiene. 

A digital partner with proven experience can help you address these issues before any email is sent. For example, a partner could run a real-time SMTP verification. This process scrubs the emails to help catch inactive email addresses to safeguard your domain reputation. The right partner could also build custom email reporting tools to help monitor the unique challenges faced by your digital debt collection strategy.

Debt Collection Email Strategies Need Constant Guidance

As a channel, sending emails for debt collection can’t thrive with a “set it and forget” approach. With deliverability, bounces, open rates, content, ISPs, ESPs, and many other variables impacting its performance, email is a living channel that requires constant guidance. It’s a full-time job that many businesses don’t have the time or specialized email expertise for. 

Emails are an extension of your brand, and a key tactic to hitting recovery goals in digital debt collection strategies. The Email Operations and Deliverability Team at Retain puts this into practice for all its clients. With years of expertise, Retain’s team monitors and works on your email strategy to keep up with this constantly changing channel. 

Optimize Your Debt Collection Emails with Retain

If you’re looking to get more out of your debt collection emails, make Retain your digital partner. With industry leading email engagement, our team manages ESP relationships and stays on top of best practices to give your strategy optimal performance. See how your debt collection email strategy could be improved by reaching out to Retain today.

A recent court decision in Robertson vs. TrueAccord Corp established key precedents for the debt collection industry. In this post, we’re going to break down this key court ruling, the power that text messages offer debt collection strategies, and an example of recovery results this channel offers.

Clarity on Text Messages in Debt Collection & the Mailbox Rule

In Robertson vs TrueAccord Corp, the court ruled that text messages are not as intrusive as a phone call. One main reason behind this decision was that the court stated text messages can be more easily ignored, and consumers have control to stop them via opt-out actions. TrueAccord spearheading this new case law brings some much needed clarity to this highly preferred digital channel. When sending text messages in compliance with frequency limits and honoring opt-outs, text messages do not inherently constitute harassment under the FDCPA. 

Another facet of this case was the court confirming once again that the mailbox rule applies to email. It was recognized in the Robertson court decision that a debt collector can prove they sent an email (with no bounce backs), a legal presumption of receipt is created. 

Additionally, the court’s opinion helped clarify what is and what is not an automatic telephone dialing system (ATDS) under the TCPA, which prohibits the use of an ATDS to call or text cellular phones without prior express consent.The ruling found that since the text messages TrueAccord sent contained personal information like specific debt amounts, it was implausible that they were sent using an ATDS. In other words, the message’s personalization was evidence of the system’s lack of capacity to generate numbers using a random or sequential number generator. It signifies how important personalization is for debt collection, and the value data-driven outreach offers businesses.

Now’s the Time to Use Text Messages in Your Recovery Strategy

Did you know that text messaging (referred to as SMS) is becoming the favorite channel for consumers to receive communications from businesses? In fact, roughly 90% of consumers prefer a text message over a phone call. SMS gives debt collection strategies the opportunity to honor consumer preferences while being direct. 

A core benefit of using SMS for debt collection is that the channel tends to have a higher engagement rate. On average, SMS has a 98% read rate with most messages being read by consumers within three minutes of delivery. SMS also gives consumers a more streamlined experience, with a direct line from receiving a message to making a payment. It’s a nonconfrontational channel that empowers consumers to engage on their own terms. McKinsey research shows that digital-first outreach to consumers can lead to a 12% increase in payments. 

Text messages are a “soft” touchpoint that also carries the benefit of helping to preserve brand relationships. It’s also important to note that digital debt collection software like Retain are designed to keep SMS compliance top of mind. The Robertson case provides significant legal clarity and a clear framework for mitigating risks associated with SMS outreach.

How Adding SMS Led to Higher Repayment Rates

A leading neobank came to Retain looking to add SMS to their debt collection strategy. Their customers expected a seamless digital experience across all aspects of their business. Even though much of their collections outreach had switched to email, there were still customers who weren’t responding. The neobank and Retain wanted to introduce SMS since it was highly likely that customers preferred this channel. The results were more than the neobank was expecting. 

By leveraging SMS across a portfolio of Demand Deposit Accounts (DDA) and short-term loan products, the neobank saw payment rates increase by 9% after just four months of adding SMS to their collections communications strategy. The neobank then increased the number of text messages sent and collected nearly $2.6 million in four months. This equated to a 83:1 ROI due to SMS outreach being automated, which lowered operational costs and increased repayment rates.

Retain Makes Using Text Messages for Debt Collection Easy

There’s never been a better time to leverage SMS in your debt collection strategy. Retain helps your business achieve personalization at scale and unlock the benefits of SMS to increase recovery rates. Retain’s white-label debt collection software automates digital communications including SMS so you can recover more while spending less. Sign up for your demo today to learn more.

Machine learning built for debt collection can help your business recover more by spending less for better results. One example of this is Retain debt collection software, which specializes in sending digital communications and using machine learning to give businesses the ability to use personalization at scale. Let’s dive into how your business could use Retain’s machine learning to boost debt collection.

What is Machine Learning for Debt Collection?

Machine learning is a subset of AI that learns and improves its core function over time. The technology does this by analyzing large amounts of data (in Retain’s case, engagement data from digital debt collection communications). These algorithms learn from the insights it gathers to make better decisions. The more data is observed, the more machine learning algorithms will improve. 

Retain uses a patented machine learning algorithm called “Heartbeat” to automate digital communications for debt collection. Heartbeat’s intelligence dynamically selects the time, message and channel that are most likely to be engaged with by each individual consumer. Plus, it becomes more effective as it gets to know the unique preferences of the customers you’re serving.

Machine Learning Makes Personalization at Scale Possible

More than ever before, consumers expect businesses to adhere to their preferences. Retain’s machine learning makes debt collection personalization at scale possible through: 

• Content Selection: Based on the content templates your business has built, the machine learning feedback loop figures out what content will resonate based on data points related to that customer. 

• Expert Timing: Machine learning helps your business reach customers at the right time while staying compliant within client-defined parameters, applicable law and legal guardrails. 

• Channel Selection: The machine learning algorithm also decides which digital channel to use, email, text or voicemail drop, for each communication based on predictive models and dynamic engagement feedback.

• Resource Optimization: Through data, Retain’s machine learning dials in the amount of effort to put towards each account. It builds an outreach strategy that’s focused on optimizing operational efficiency and recovery outcomes. 

Machine learning technology leans into personalizing the process, which leads to a better experience for consumers. When businesses scale their collections through technology, it helps them attain better margins while putting consumers first. It goes beyond simply having a generative AI tool create a message or content template. Machine learning is making informed decisions based on the nuances of your business and behavior of consumers.

Debt Collection Strategies Benefit from Testing

At its core, debt collection is about engagement, and one of the best ways to maximize that in digital communications is through testing. Let’s start with content. Retain’s machine learning helps to optimize your debt collection strategy by analyzing which of a business’s approved message will resonate best with consumers. It facilitates data-driven A/B testing which offers insight into the most effective tone and call-to-action for better personalization at every step of the experience. 

For example, let’s say a customer hasn’t been responding to a strictly informative email outlining their debt. Machine learning could try a more upbeat message (chosen from your approved content library) to get attention. This variable (i.e., message tone) could make the difference between getting a repayment and being left unread. Retain actively tests not just content, but also times, communication channels, call to actions (CTAs), subject lines and many more variables all happening concurrently. Machine learning acts faster than any human being and can incorporate several changes in one iteration. 

Machine Learning Supports a Consumer-Centric Experience

In the debt collection industry, empathy is essential. Customers want to feel understood by businesses and that starts by honoring their preferences. Retain’s machine learning does the work to better understand each individual customer to help get their attention for a path forward. 

Retain’s approach to using machine learning for debt collection focuses on enhancing the experience customers have with your business. When customers feel their preferences are respected, they’re more likely to engage with your message and make a repayment.

See Retain in Action – Schedule Your Demo Today!

If you’re ready to collect more by spending less using machine learning, Retain is here to help. Schedule a demo with our team today and get a hands-on look at how Retain can improve your recovery rates.

While digital debt collection outreach offers plenty of benefits, a business only unlocks them when an email actually reaches the intended recipients. Let’s go over what your business needs to know about email deliverability.

Email Deliverability is the Current Backbone of Digital Debt Collection

In simple terms, email deliverability is the number of emails that make it into inboxes divided by the number of emails being sent. Email deliverability is influenced by a host of different factors such as Internet Service Providers (ISPs), email list hygiene, subject line content, maintaining a consistent send schedule and more. All of these factors need to be monitored since they’re key drivers of consumer engagement and impact your bottom line. 

There’s no shortage of products and services that can send emails for a business, but not all of them work the same way on this critical element. A debt collection email that doesn’t make it into an inbox isn’t just a missed opportunity for repayment, it could also be a potential compliance issue. If a business is sending legally required information by email, Regulation F requires that the methods used be “reasonably expected to provide actual notice” to the consumer. 

Proactively monitoring and managing deliverability metrics is the industry-leading way to demonstrate compliance with this standard and ensure your digital strategy meets CFPB expectations.

How Domain Reputation Impacts Email Deliverability

A domain is the part of an email address that appears after the “@” symbol, and it’s commonly set up as the business name. Domain reputation is the overall health and credibility that mailbox providers assign to branded domains. Think of it like a credit score, the better it is, the more likely your emails are to make it into inboxes. Here are the key best practices for maintaining a good domain reputation: 

• Work to maintain good email list hygiene. 
• Make it easy for people to unsubscribe from emails. 
• Actively authenticate the email addresses being sent to. 
• Track email deliverability, including delivery rates. 
• Avoid using “spammy” subject lines and email content. 
• Address spam complaints quickly and efficiently. 

When a domain reputation isn’t up to par, it often has detrimental effects on digital debt collection strategies due to delivery issues. If a message never reaches a consumer, there’s no chance of a repayment. 

Email Deliverability Challenges Debt Collectors Need to Know

Digital debt collection strategies often have to walk a delicate line when sending emails. These messages need to be transparent and consumer-first to get past spam filters. Some of the phrases that are used in traditional collections like “pay now” or “immediate action required” are likely to get flagged by email providers as spam. The subject lines for debt collection emails should avoid threats and/or giving a false sense of urgency, and instead focus on providing clarity and value for the consumer. 

Email subject lines should be transparent and non-deceptive. Additionally, if a debt collector is sending a disclosure required by Regulation F, the debt collector must do so in a way that is “reasonably expected to provide actual notice” to the consumer. The things a debt collector can do to show it sent an email in way that it is “reasonably expected to provide actual notice” is to include in the subject line the name of the creditor to whom the debt is currently owed, and one additional piece of information (e.g., a truncated account number, the name of the original creditor, the name of any store brand associated with the debt, etc.)

Another common email deliverability challenge is list hygiene. In many areas of debt collection, especially with older or dormant accounts, businesses have a higher chance of running into out-of-date data. If a business continually sends emails to addresses that are no longer active, their email deliverability and domain reputation will take a hit. It’s important to regularly scrub email lists to catch inactive addresses. Email verification processes can also help you weed out “bad” email addresses, which could help lower soft and hard bounce rates. 

Even when an email makes it into an inbox, there’s still a chance it could be ignored. Modern email providers track how often recipients are interacting with messages from branded domains. If the majority of emails being sent go unopened, archived or ignored, there’s a risk that email providers will flag future messages from your domain as spam. That’s why it’s important to personalize the message and send time to increase the engagement rate. A strategy that can be made more cost effective and efficient when intelligent digital debt collection software is used.

Email Deliverability is a Priority with the Right Partner

There are plenty of software platforms and services that can help businesses send emails, but how many also work on email deliverability and domain management? Retain has a dedicated Email Operations and Deliverability team that monitors email debt collection programs to proactively keep them in line with best practices, combined with a patented optimization engine that uses AI and millions of consumer data points to make updates to email strategies in real time.

Want to Know How to Improve Collection Rates? Get Retain

Retain can help your debt collection emails get seen and engaged with by more customers. Talk with our team to learn more about how focusing on email deliverability could improve your collection rates and email performance.

Collection law firms that want to improve recovery rates and expand their business need to think about taking a digital-first approach. That’s where debt collection software for law firms can help. In this post, we’re going to cover why more firms should go digital-first, the importance of leveraging the right email strategy, the power AI can offer and more! 

Why Collection Law Firms Should Consider Going Digital-First

There are a variety of benefits for collection law firms that make the move to go digital-first:

• Operational Efficiency: Manual collections require law firms to hire more staff to effectively scale and/or dive deeper into existing portfolios. A debt collection software that specializes in automating digital communication channels takes the cost out of that process. A firm’s existing staff can manage a higher volume of accounts and connect with account holders through channels they prefer. *(Retain is software designed to augment attorney workflow. All final communication templates and delivery schedules remain under the ultimate “meaningful involvement” and control of a firm’s licensed attorneys.) 

• Opportunity for Higher Cure Rates: The majority of consumers prefer to be contacted through digital channels like email and text by businesses. When a collection law firm leverages digital channels, their collection messages are more likely to be engaged with. Plus, some debt collection software uses AI to continually look for the best time, message and channel for each individual account holder. 

• Digital Channel Preferences: A McKinsey survey found that roughly 59% of consumers prefer email as a first point of contact. And 65% of consumers want their payment reminders to be sent through text. According to TrueML’s research, contacting a consumer through their preferred channel can lead to a 10% increase in payments. 

Email Goes Beyond Hitting Send – Email Deliverability Matters

Email is often the first step that many collection law firms take when implementing a digital-first strategy. While there are plenty of platforms out there that can send emails for law firms, only a select few have proven email deliverability expertise to help get messages seen.

When your business sends an email to an account holder, their email service provider could reject it, or assign it a tag like spam to the message. To make this decision, email providers look at subscriber interaction, the types of emails being sent, a recent history of the sender’s reputation and more. Email deliverability can be a challenge for collection law firms since they’re more likely to do bulk sends that could trigger spam filters and diminish their domain reputation. 

All this means just because a recipient’s email provider accepts a message, it still might not make it into their inbox. However, there is debt collection software like Retain that has a dedicated team of email deliverability experts that help law firms with best practices like maintaining list hygiene and reputation management with ISPs so that more collection emails make it to account holders’ inboxes. 

The Power of AI-Driven Engagement in Digital Debt Collection 

Traditional collection law firms might segment portfolios in a semi-manual process using standard variables like the balance owed. Strategies like this can achieve some success, but firms are likely leaving money on table by not honoring consumer preferences. A digital-first approach using debt collection software that’s AI-powered can go beyond segmentation and tailor outreach based on consumer behavior and preferences. 

AI can effectively analyze portfolios using past consumer interactions to help find the right message, time and channel for each account. The AI can update its process in real-time for each account based on what is driving payment and what isn’t. 

Going Digital-First for Collections Often Isn’t Difficult

The thought of using debt collection software to adopt a digital-first approach might seem daunting for some firms. Tech overhauls can often be costly in both money and time. However, this isn’t the case with every option out there. Debt collection software like Retain can plug into existing systems (like CRMs) so firms don’t have to rebuild their entire tech stack to get the benefits of digital-first communications. AI-powered debt collection software is often designed to be easy for law staff to use and manage. 

Spend Less to Recover More with Retain Debt Collection Software

Retain is white-label debt collection software that lets your law firm scale collections communications without ballooning operating costs and find more first-time payments in portfolios by sending digital communications at scale. 

Retain allows for jurisdictional-based logic, ensuring that a firm can automatically include specific state-mandated disclosures in emails based on the consumer’s residence. If you’re ready to jump-start your digital-first collections strategy, our team is here to help. Talk to Retain today! 

Many traditional collection strategies like phone calls and physical mail can undermine the hard-earned member trust that credit unions value. However, there are ways for credit unions to make their debt collection strategies more effective. Join us in exploring three tips that emphasize honoring relationships while improving collection performance. 

1. Move to a Digital-First Debt Collection Strategy 

More consumers (especially younger generations like Gen Z and Millenials) find phone calls and physical mail to be intrusive. It’s part of the reason why spam filters and call screening software have risen in popularity. Plus, these forms of manual outreach are expensive, often leading to credit union staff members being unable to process it all on their own. 

The answer to this problem is taking a digital-first approach to credit union debt collection. Here are the key pillars of what this looks like: 

• Omnichannel Presence: A core principle of digital debt collection is meeting members where they are. This means using digital communication channels like email, text messages and voicemails drops that align with different member preferences. 

• AI-Powered Message Delivery: Debt collection software like Retain using AI to determine the right channel, time and message for each member to help optimize engagement. 

• Lower OpEx: By using debt collection software that automates sending messages through digital channels, credit unions’ staff have more time to focus on helping members with the most complex cases. It also allows the business to scale up accounts being serviced without increasing headcount.

2. Offer a Self-Service Portal to Enhance the Member Experience

When someone falls behind on payments, it’s not uncommon for that person to feel ashamed or embarrassed about it. Add in the personal relationship credit unions foster with their members, and it only adds to the resistance members might have about discussing their debt with staff. Self-service portals add a judgement-free space to debt collection strategies that empowers members to manage their debt. 

According to TrueML research, roughly 59% of consumers in debt want more flexible payment options. In fact, McKinsey research found that consumers digitally self-serve their debts at higher rates, are more likely to pay in full and have higher levels of customer satisfaction. Self service gives members access to their debt 24 hours a day without the “shame factor” mentioned above. 

Every time a credit union empowers a member to “self-cure” a debt through a portal, it saves on operating costs. Self-service payment portals can also be set up to give every member the same disclosures to minimize the risk of human error with compliance. 

3. Leverage Digital Debt Collection That Leads with Empathy

Many credit unions approach debt collection strategy through the lens of “saving the member”. The ultimate goal is to find a way to get every delinquent member back into the community. One of the best debt collection strategies to do this is to lead with empathy. Being empathetic to a member’s situation leads to higher recovery rates and strong brand loyalty. 

Debt collection software like Retain acts as an extension of your team to offer empathy to members. A digital-first collection approach archives this by: 

• Honoring member communication preferences. The majority of consumers prefer being contacted by digital channels from businesses. 

• Leveraging AI to personalize outreach. It helps members feel valued by their credit union by providing a customized experience they deserve. 

• Empowering members to view and manage the details of their debt when it’s most convenient for them. This frees up staff to assist members who need the most one-on-one attention. 

Members don’t want a one-size-fits-all approach to any aspect of the credit union experience. Digital debt collection that’s powered by AI makes it possible for your business to be more flexible and empathetic. Every member is being communicated with as an individual, in a way that’s relevant to their preferences and needs. 

Get Better Recovery Results and Better Member Retention with Retain

Retain by TrueML Products is white-label debt collection software designed to help credit unions collect more while spending less. Improve the management of your early-stage delinquencies by automating digital communications. Personalize outreach based on engagement from your members and millions of consumer touchpoints. 
Ready to improve repayment performance without increasing operational costs? Get in touch with the Retain team today to learn more.

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. 

To leverage digital debt collection strategies for defaulted accounts, a core component is how to compliantly send the initial validation notices. If your business doesn’t get this process right, there’s regulatory headaches, consumer confusion and legal risks you’ll have to deal with. To tackle this important topic in digital debt collection strategy, we’re going to highlight the “NOT strategy” that goes against best practices. Let’s take a look at how NOT to send digital validation notices. 

How NOT to Tip 1: Forgetting About Opt-Outs in Collections Compliance

One of the worst ways to send a digital validation notice is to forget about opt-outs. Specifically, businesses that do not have processes in place to stop communicating with consumers who have opted-out of a particular medium  are in for some trouble. Also, businesses can’t designate exclusive revocation methods and have to honor any opt-outs reasonably conveyed. For example, if a consumer uses different wording than standard keywords such as “stop” in a text message, it still counts as an opt-out. Consumers can use a variety of common ways to opt-out such as: 

• Text Messages: Consumers can respond to a text with words like “stop”, “quit”, “unsubscribe” or “cancel” to opt-out. 

• Email: Click on the “opt-out” or “unsubscribe” button that businesses are required to include when sending digital validation notices through email. Consumers could also email a business directly with their request or verbally convey an opt-out over the phone. 

Shifting from opt-outs to consent, consent is not required to send a validation notice electronically if the validation notice is the first communication with the consumer. Regulation F makes clear that E-SIGN consent is required to send the validation notice electronically only if you’re sending the validation notice after your initial communication with a consumer. 

How NOT to Tip 2: Ignoring Email Deliverability

A digital validation notice can’t do its job if it doesn’t make it to a consumer’s inbox. Digital debt collection strategies that follow the “NOT” approach often don’t put much emphasis on email deliverability. The worse your email deliverability is, the more likely your digital validation notices end up in email spam folders. 

Domain reputation also plays a big factor in email deliverability as well. Think of domain reputation as a running account of how trustworthy internet service providers (ISPs) and email service providers (ESPs) think a business’s emails are. The “NOT” strategy would involve using spammy subject lines, not regularly cleaning your email lists and sending bursts of messages in a short time frame. These actions will harm your domain reputation, making it more likely that digital validation notices sent through email would be flagged as spam. 

It’s also important for businesses to keep a digital paper trail of all the validation notices that are being sent to consumers. Not only does this help ensure each message was delivered, but it also assists with the audit process. 

How NOT to Tip 3: Prioritizing Call-to-Actions in Digital Validation Notice Emails

The primary purpose of sending a digital validation notice through email is to inform a consumer of their 30-day right to dispute a debt or ask for verification. Naturally, the “NOT” strategy involves using eye-catching call-to-actions to draw attention away from that important goal. To be clear, any flashy call-to-action like a giant “PAY NOW” button could be seen as overshadowing a consumer’s rights. 

Businesses that subscribe to the “NOT” digital debt collection strategies try to make prompting a payment the main focus, instead of providing important information about the debt. Digital validation notices also have to include a prompt the consumer can use to dispute the debt. Poorly designed call-to-action buttons can get in the way of that requirement. The dispute link or button should be noticeable and convenient for consumers to exercise. Fans of the “NOT” strategy shouldn’t include clear headlines, such as “How would you like to respond?” in the digital notice. 

How NOT to Tip 4: Not Following Timing Rules

The Fair Debt Collection Practices Act (FDCPA) and Regulation F lay out clear guidelines for sending validation notices digitally. Businesses need to make sure to avoid sending validation notices outside of permissible hours. The notice also has to be provided either in the initial communication, or sent to the consumer within five days of first contact.

Regulation F also requires businesses to monitor for the deliverability of validation notices. So, businesses need to check and make sure that notices don’t end up in spam folders. One of the best ways to adhere to these rules is to send your digital validation notices as the initial contact. 

How NOT to Tip 5: Making it Challenging to See the Validation Notice

For most emails sent to consumers, consumers clicking on a link or downloading a PDF would be a great outcome because it shows engagement with the email. That’s not the case when sending digital validation notices. It’s enticing for businesses to tell consumers to click a link or view an attached PDF to receive the validation notice. However, putting more barriers in front of the notice should be avoided. Remember that accessibility is key, consumers shouldn’t have to click, guess or log into a separate portal to see this important notice. Don’t follow the “NOT” strategy, and instead follow these best practices: 

• Do not hide the validation notice behind hyperlinks or passwords. If you’re sending an email, the required notice should be included in the body of the message. If you attach the validation notice, and require a password to open the PDF, that is not likely to be viewed as effectively delivering the notice.

• It’s important to have a clear subject line. Regulators and courts expect businesses to send straightforward messages that use consumer-friendly language. When emailing the validation notice, the CFPB’s official interpretation advised that the subject line include the name of the creditor to whom the debt is currently owed and one additional piece of information identifying the debt (other than the amount), such as a truncated account number.

• When sending digital validation notices through email, there shouldn’t be any extra clicks or steps to see the information. 

These days, consumers are getting more scam emails and texts than ever before. By following these best practices and sending digital validation notices the right way, you’ll help consumers get important information about their debt without seeming suspicious. 

Case Study: How NOT to Send Your Digital Validation Notice

In Lavallee v. Med-1, the issue was whether a debt collector complied with the Fair Debt Collection Practices Act (FDCPA) when it attempted to send a validation notice by email instead of postal mail. Med-1 sent a consumer two emails. The subject lines said “You have a message,” and the body of the email contained a hyperlink that, when clicked, would direct the consumer to a secure website where the actual validation notice was stored. 

The consumer never opened the links and therefore never saw the validation notice. She later argued the debt collector failed to provide the notice required by §1692g of the FDCPA (the 30-day validation notice). The Seventh Circuit agreed with the consumer: the collector did not effectively “provide” the notice. Simply sending an email with a vague subject line and a link to a separate site was not sufficient to satisfy the FDCPA.

Send Digital Validation Notices the RIGHT Way with Retain

Retain automates digital debt communications and has advanced compliance controls built-in. Our software and team can work with your business to ensure that digital validation notices are sent the right way. Retain also has strict ownership and deliverability checks for safely delivering emails and text messages to your customers. Schedule a consultation today, and learn more about digital validation notice best practices.

With new debt collection state compliance regulations being enacted across the country, businesses are having a hard time keeping up without their OpEx budget ballooning. Even though debt collection strategies are going to need to adapt, there are ways to stay on top of increased state regulation authority. Let’s dive into why this change has happened, and insight into how adjusting collection strategies could help keep up. 

Why Do States Have More Regulatory Authority?

In the last year, the CFPB has taken a step back and has shifted its focus away from supervision and enforcement of the financial industry. There have also been multiple cuts of staff and budget, which has made it challenging for the agency to maintain its position as the primary authority for debt collection compliance. 

The United States in general operates under a dual system of federal and state laws and regulations for the financial industry. With the CFPB ceding control, states are stepping in to take on more responsibility for the financial well-being of consumers. One of the impacts this has on businesses is that adhering to state compliance laws and regulations is becoming more complex. 

While states do work with interagency bodies, the financial issues of consumers often vary by area, which leads to unique regulations debt collection strategies have to follow. Now that states are filling the void left by the CFPB, the compliance landscape is harder to track and predict. 

What Does This Change Mean for Debt Collection Strategies?

In the wake of increased state enforcement and regulation activity, debt collection strategies are likely going to need to change. While it’s impossible to know what developments may come next in this evolving landscape, here are some ways businesses can prepare to meet the challenges: 

• Be Ready to Adapt Quickly: State legislators and regulators are much more nimble when it comes to enacting new regulations compared to the federal government. New laws around consumer finance and debt collection are easier to pass and typically go into effect more quickly than federal laws and regulations. By keeping a finger on the pulse of state compliance trends, businesses can help mitigate the risk of being surprised by a new law or regulation that interrupts operations. 

• Think Locally and Monitor State-Level Developments: State and local regulators have a closer view of the financial issues consumers are facing. Many states have dedicated channels for consumers to submit financial related complaints. Since state governments are very invested in their economic health, they tend to react swiftly to financial issues like compliance violations. 

• Implement Tools to Address Unique Compliance Guidelines at Scale: A core challenge of businesses doing debt collection in multiple states is complying with all the different laws and regulations. Since the number of unique state compliance regulations is likely to increase, the OpEx cost of debt collection strategies could follow suit without a scalable strategy in place. 

Tips for Adjusting Your Collections Strategy

For businesses trying to adjust their collections strategy in this new regulatory environment, it’s important to understand that there’s more risk given how complex compliance has become. Another challenge is that smaller compliance departments are going to have a harder time keeping up with all the new regulations from state to state. The good news is that there are debt collection strategies that can help. Here are a few suggestions:

• Reorient Your Compliance Focus: Compliance strategies need to shift and focus on the states in which your business operates. Do regular audits and research around the compliance rules and enforcement activities of each state. By keeping an eye on interagency bodies and trends, your business will be better equipped to stay compliant without your OpEx budget ballooning. 

• Conduct State-by-State Assessments: Take a close look at your business’ debt collection services and strategies to see how they stack up against each state’s laws and regulations. You’ll want to pay extra attention to bellwether states like California or New York that often set the precedent that other states follow. 

• Invest in Debt Collection Software That Makes Compliance Easier: In the patchwork state-run compliance landscape for debt collection, a one-size-fits-all approach isn’t going to work. Debt collection software like Retain offers custom compliance with deliverability checks and guardrails for sending digital communications. 

Stay Compliant While Reducing OpEx with Retain

Retain by TrueML Products is debt collection software that makes sending digital communications easy. Our software lets you restrict your messaging by state or set the desired state disclosures to streamline your compliance efforts.

If you want to stay ahead of the state-driven compliance landscape, we’re here to help. Schedule a call with our team to learn more about Retain’s FDCPA and Reg F compliance controls.