Guess it's still better than debtors' prison. A federal agency is proposing a new rule that would allow debt collectors to contact people through text, email and social media. The Consumer Financial Protection Bureau says the change is being made to keep up with new technology.
Another proposed rule change would limit the number of calls a debt collector can make to a consumer.
Debt collectors would only be allowed to call seven times per week.
The new regulations would be amendments to the Fair Debt Collection Practices Act (FDCPA) passed in 1977 to stop debt collectors from harassing consumers.
Collections and new means of communication
At a town hall meeting in Philadelphia on May 8, the bureau's director, Kathleen Kraninger, talked about the proposed changes and why they are needed.
"The FDCPA explicitly addressed the use of postcards, collect calls and telegrams. I don’t know about you, but I’ve literally never received a telegram and wouldn’t even know how to send one," she said. "The upshot is that the FDCPA was written largely to address communications between debt collectors and consumers but it hasn’t always been easy to discern how it might apply to technologies today."
The FDCPA rules were not updated over the years because Congress had given no agency the authority to make revisions. It wasn't until the 2010 Dodd-Frank Act that the bureau was authorized to make changes.
Under the proposed new rules, debt collectors would be able to communicate with debtors through phone, email and text. However, any emails or texts sent to consumers would be required to have an opt-out option. A debt collector that does not adhere to that policy will be considered to be in violation of the Fair Debt collection act.
Consumers may also dictate to collectors which emails and phone numbers must be used to contact them. Debt collectors will be considered as "harassing and oppressing" a consumer if they do not abide by those choices.
Questions about social media
The bureau has just started a 90-day public response period before the new rules are enacted. Leaders at the bureau concede there is one particular issue they would like to get the public's take on -- social media.
In its 538-page proposal, the bureau is requesting "comment on whether to clarify the meaning of the term email ... such as by specifying that it includes direct messaging technology in mobile applications or on social media platforms."
The bureau does take a stance against debt collectors who contact debtors through social media public postings.
"[A] debt collector may have no legitimate purpose in contacting a consumer by publicly viewable social media. As a result, such conduct may serve only to harass, oppress, or abuse."
New rules for debt collectors
Along with not being allowed to call a consumer more than seven times a week, debt collectors must communicate their intentions clearly. If they are a third-party that has taken over collection of the debt, that information must be conveyed to the consumer.
Debt collectors also would be required to relay messages in plain language, avoiding legalese, and refrain from shouting, harassing and threatening lawsuits.
If collectors reach the limit of communications with a consumer, they are not allowed further contact until the following week.
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