The new rules clarify how debt collectors can use email, text messages, social media, and other contemporary methods to communicate with consumers. It also enables borrowers to limit the ability of debt collectors to contact them through such communication methods.
While debt collectors are able to contact borrowers via an array of communication methods, the 1977 Fair Debt Collection Practices Act prohibits harassing, abusive, and unfair debt collection practices as well as false and misleading representations by debt collectors.
Under the new rules, debt collectors who contact borrowers on social media have to identify themselves as such and give consumers the option to opt of out being contacted online.
That option needs to be “a reasonable and simple method to opt-out of such communications at a specific email address or telephone number.”
Any messages they send must be done so privately, meaning they cannot post on the borrower’s public page, however, debt collectors are able to send a friend request or follow the consumer, as long as they provide identifying information.
A debt collector is presumed to violate federal law if they “place telephone calls to a particular person in connection with the collection of a particular debt more than seven times within seven consecutive days or within seven consecutive days of having had a telephone conversation about the debt,” as per the new rules.
Debt collectors are also prohibited from using or threatening to sue consumers on time-barred debt and are required to take “specific steps” to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.
Specifically, debt collectors must speak with the consumer in person or wait at least 14 days after sending a letter or virtual communication before reporting them to a credit rating agency.
If a consumer believes that the collector is breaking the rules, they can file a complaint with the Consumer Financial Protection Bureau.
However, the CFPB rules do not explicitly state how often a debt collector can contact a consumer via text, email, or private messages.
“The rule is the result of a deliberative, thoughtful process spanning more than seven years and reflects engagement with consumer advocates, debt collectors, and other stakeholders,” the Consumer Financial Protection Bureau said.
The CFPB has proposed extending the planned start date of the new rules to Jan. 29, 2022, but later determined that the extension was “unnecessary” and set the planned start date of Nov. 30, 2021.
CFPB praised the move as a welcome change to the outdated methods currently used by debt collectors to reach out to consumers.
“With the vast changes in communications since the FDCPA was passed more than four decades ago, it is important to provide clear rules of the road,” said CFPB Director Kathleen Kraninger. “Our debt collection rulemaking provides limits on debt collectors and provides clear rights for consumers. With this modernized debt collection rule, consumers will have greater control when communicating with debt collectors.”
However, some critics have expressed concerns that the new rules will negatively impact consumers who don’t have access to regular internet or don’t check social media regularly, resulting in them missing any communications from debt collectors.
April Kraninger, a staff attorney at the National Consumer Law Center, told NPR, that the new rules “are really disappointing and concerning in a number of ways.”
Kraninger said that the new rules may also give rise to more criminals taking advantage of the newer methods of communication and attempting to unlawfully contact consumers by posing as legitimate debt collectors.
“I have actually already gotten my first spam debt collection email even before the new rules took effect,” she said. “So certainly we should anticipate more bad actors who are trying to scam people into paying them money on alleged debts.”