New rule lets debt collectors text, email or social media you – NBC10 Philadelphia
Debt collectors now have more ways to contact borrowers about unpaid debts.
The Consumer Financial Protection Bureau’s new debt collection rule allows third-party debt collectors to send messages to people on social media platforms such as Facebook, Twitter and Instagram in an attempt to collect a debt.
The update also clarifies the rules for other electronic communications, including emails and text messages. With fewer Americans having landlines, texting and emailing have become more common means of communication with friends and family. The debt collection industry has long used email and texting to reach borrowers, but the industry says it was operating in a legal gray area. It’s not illegal for a debt collector to text or email you right now, it just wasn’t as clearly defined as the rules for phone calls or letters.
Kathleen L. Kraninger, the former CFPB director who oversaw the rule changes, said in a blog post last year that updates were needed to modernize the Fair Debt Collection Practices Act, which is older. of four decades.
âWe are finally leaving 1977 behind and developing a debt collection system that works for consumers and industry in the modern world,â she said.
Under the new rules, which took effect Tuesday, third-party debt collectors could only call a delinquent borrower seven times in a seven-day period – previously they could call as often as they wanted. And once they contact a borrower by phone, they’ll need to leave them alone for at least a week.
The CFPB has not limited the number of text messages or emails a collector can send, but their messages must include information on a way to opt out of receiving further communications.
The rules for how a debt collector can contact a borrower on social media have strict guidelines:
- Their message should be private and not visible to the general public or to your friends, contacts or followers.
- If a debt collector tries to send you a private message asking you to add yourself as a friend or contact, they should identify themselves as a debt collector.
- They should also provide you, in each post, with an easy way to opt out of receiving further communications from them on this social media platform.
If you’ve found yourself sent to a collection agency, there are ways to reduce your overdue debts or wipe out your credit report altogether. Here’s what you need to know about trading with collections.
The rule also specifies that before a collector can report an overdue debt to a credit rating agency, they must either speak to the borrower in person, over the phone, or wait at least 14 days after the submission has been sent. ” a letter or electronic communication – including a social media post – before reporting.
Yet consumer groups argue that the guidelines may not be enough to protect vulnerable families from harassing debt collection practices.
On the one hand, the call limits are âper account,â meaning collectors can call someone with eight overdue accounts up to 56 times per week. Debt collectors also don’t need consumer permission to communicate through social media, and the rule doesn’t limit the number of messages they can send unless they opt out.
“The CFPB has indicated that it can always review the rules in the future, and we urge them to do so,” said April Kuehnhoff, a lawyer at the National Consumer Law Center. âIn the meantime, we call on states to adopt additional protections to prevent vulnerable families who are still recovering from the pandemic from harassment and abusive debt collection practices. ”
The CFPB received more than 80,000 complaints about debt collectors last year, according to the Associated Press, and the industry generally ranks first in complaints to other federal and state agencies like the Federal Trade Commission. . The rules proposed by the CFPB only impact the so-called third-party debt collection industry – those who typically buy old debts at pennies on the dollar or are contracted by another. lender like a bank to collect old debt.
About 25 million Americans are in debt collection, according to the Federal Reserve. However, the Urban Institute estimates that the debt collection rule will affect at least 68 million people.