Annoying calls or messages from debt collectors may be a drag, but they’re still better than debtors’ prison. But now the Consumer Financial Protection Bureau has made matters worse after finalizing a new rule that would allow debt collectors to contact people through text, email and social media.
According to CFPB, the change is being made to keep up with new technology. What it means for us, though, is even more harassment over unpaid bills. Thankfully, an additional rule was added that limits the number of calls a debt collector can make to a consumer to seven times per week.
Unfortunately, there’s no limit to the number of messages and emails they can send you. Here’s what you need to know about the newest amendments to the Fair Debt Collection Practices Act, and what it means for you as a consumer.
Collections and new means of communication
At a town hall meeting in Philadelphia on May 8, 2019, CFPB 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.
You may also like: These apps are grabbing tons of data about you
According to Kraninger, “The upshot is that the FDCPA was written largely to address communications between debt collectors and consumers.” She also adds that 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 given the okay to make changes.
Under the 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. At least we have some options.
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 the collection of a 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.
Ramifications for consumers
There are fears among consumer advocacy groups that these new rules may lead to more harassment and stress for Americans already struggling under COVID-19-related hardships like job loss. Being able to block debt collectors only goes so far when they have several new ways of getting in touch with you.
There are also fears that mistaken collections calls or lawsuits may lead to even more financial troubles for vulnerable people. The rule is set to take effect one year from today — so there is still some time before messages start popping up on phones and social media inboxes.
That said, if you’re contacted by a debt collector, consider taking these steps to make sure you aren’t being harassed:
Request verification of the debt. Sometimes, debt collectors will mistakenly contact you. This can happen if you have a similar name to someone who owes a debt. If you don’t recognize the debt amount or the company you owe it to, ask the collector to provide detailed information about the name of the original creditor and how the amount was calculated.
The Fair Debt Collection Practices Act of 1977 gives you this right so you can protect yourself. Once you request verification, expect to receive the information by mail in about five business days.
Don’t immediately offer to pay old debts. Debt older than seven years doesn’t show up on your credit report. At the same time, debt typically reaches a statute of limitations after four years. If you make a payment on old debt, you can accidentally revive it and be on the hook for a new amount.
Keep your information private. Scammers can also impersonate debt collectors and trick you into sharing personal information like your Social Security number and bank account. Only provide payment information to a debt collector after you’ve verified the debt and whether or not the collections agency is legitimate.
It might seem like a pain to have to worry about debt collectors on social media in addition to scammers — but there is a silver lining to all this: If you make your profile private (where only friends can contact you), you’ll be able to reduce your exposure. Maybe it won’t be so bad after all.