Tired of harassing debt collection agencies? Your latest tactic might be to harass you through texts and emails – maybe even on Facebook.
The Consumer Financial Protection Bureau has issued a final rule to update the Fair Collection Practices Act (FDCPA). The good news: Collectors can only call you seven times a week per debt. The bad news: they can send you unlimited emails and texts, and potentially contact you on social media.
In theory, the law was updated because when it was passed in 1977 there was no technology to contact you via SMS or email.
The FTC enforces the Fair Collection Practices Act, which was originally passed to provide consumers with legal protection from abusive, unfair, or misleading collection practices.
Bruce McClary, vice president of communications for the National Foundation for Credit Counseling in Washington, D.C., said the law is out of date for both consumers and debt collection agencies.
And while the rule opens the door to additional communications from debt collection agencies, he notes that it also clarifies that consumers have the right to opt out of electronic communications. However, opening up the electronic channels could mean even more opportunities for debt collection agencies to gather information and harass you.
"The likelihood of debt collection agencies using social media messaging apps to reach consumers raises additional questions about the right to privacy," McClary wrote in an email.
Here you will find out what you need to know about the new rule and how you can protect yourself from unwanted communication.
How changes to the FDCPA could affect collections
The FDCPA change focuses on debt collection communications, updating the way collection agencies can contact you, but also clarifying how to restrict what means debt collection agencies can communicate with you. However, it is your responsibility to control contact.
Here's how the changes might affect you.
How Debt Collectors Might Use Electronic Communications
Under the new rule, collection agencies can now contact you via email and text.
There is no mention of a limit on the number of contacts when it comes to electronic communications. Unless you have an unlimited text messaging plan, an avid debt collector can send your cell phone bill over the roof pretty quickly.
Just because a collector sends a text or an email doesn't mean you won't get endless messages anymore.
The rule requires collection agencies to offer a "reasonable and simple method" to refuse future communications using these methods.
And if the collection agency contacts you via electronic communication, you can use the same communication method to make a request to stop communication. So if the debt collection agency sends you an SMS, you can write it back so that you no longer contact you by text.
A debt review letter must state how much you owe, who you owe it to, and what action you can take. It is one of the most important tools for detecting mistakes or fraud.
However, one of the safeguards within the current FDCPA is the right to request a debt validation letter, which must be sent to you by third party debtors upon request.
When collection agencies send you an email, they could potentially use it as an opportunity to start collecting payments without clearly explaining the information McClary said you should know.
"Chances are they could include docusign elements in these emails that would allow people to request validation of debts – or make arrangements to repay the debt," he said.
Social media options for debt collection
The change also left the door open to sharing on social media, which could provide new ways for debt collection agencies to reach consumers where they are.
However, current law prohibits collection agencies from disclosing information about the debt – or even the reason for contact – to anyone other than the person who owes the debt, according to McClary. This discretion is becoming increasingly difficult in the world of social media.
"There is one debt collector who even suggested that he could use social media tools like WhatsApp to connect with people," said McClary. "This is a little more alarming. There are privacy issues when you talk about social media as a communication tool for debt collection agencies."
How many calls from a debt collector are considered harassment?
Additionally, the rule states that making more than seven calls in a week regarding a specific debt is considered harassment. And once the collector has spoken to the consumer, the collection agency has to wait a week before calling the consumer again about the debt.
That may seem reasonable, but many people whose debts are past due rarely owe only one account, McClary points out.
"When you think about it, a person might not owe just one debt – they might have three debts in collections, allowing 21 contact attempts per week," he said. "It's easy to see how this can be a little more stressful than some of the current regulations."
What can you do to protect yourself?
McClary pointed out that the new rules won't go into effect for a year, so you'll have some time to prepare.
When a collection agency reaches out to you, remember that you are in control of the communications. For example, if you have a restricted text messaging plan, you can act immediately and ask him to contact you in a different way.
But even if you don't believe you owe the debt or that it is a scam, keep at least one line of communication open with the collection agency.
"Your efforts to collect the debt will continue whether you speak to them or not," McClary said. "Better to have a conversation and know what your next steps will be than to guess … and move on in the hope that they won't escalate the account or take legal action."
If phone calls or text messages make you nervous, you can request email communication options, including confirmation letters and confirmation letters. You can also request that collection agencies stop contacting you at certain times or in certain places (such as at work).
Some states offer consumer protection beyond the FDCPA. You can find out how to do this on the website of your state attorney general.
The Bureau intends to enact a second collection rule in December that will focus on consumer disclosure. So stay tuned.
Tiffany Wendeln Connors is an employee at The Penny Hoarder. Read her bio and other work here, then greet her on Twitter @TiffanyWendeln.
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