The Consumer Financial Protection Bureau (CFPB) recently proposed new rules that govern how third-party debt collectors can contact borrowers. Although 660 News reports that the rules are still in a 90-day comment period and will likely be finalized later this year or early next year, they would allow an unlimited amount of text messages and emails to be sent to borrowers.
As of now, debt collectors can text and email, but the practice resides in a legal gray area. The Fair Debt Collection Practices Act was established in 1977 but hasn’t been updated since, which means it lacks rules addressing digital correspondence.
“Using email or text messages was ‘use at your own risk,'” said Mark Neeb, chief executive of ACA International, the lobby group for the debt collection industry.
Debt collectors are, however, legally allowed to make phone calls as often as they want. But under the new rules, collectors are only allowed to call a delinquent borrower seven times a week. In addition, they must leave them alone for at least one week following successful contact.
Joanna Darcus, a debt attorney at the National Consumer Law Center in Boston, says that the new rules leave borrowers open to an invasion of privacy.
“This rule opens the door to increased contact by debt collectors to new channels or existing channels that they haven’t utilized to date like emails and text messages. That’s very dangerous to consumers.”
She added that many borrowers won’t understand their rights when it comes to dealing with debt collectors.
“Consumers should know that they have the right to tell debt collectors when and how to contact them and they still have the right to revoke consent from folks who try to contact them.”
The next text message you receive may not be a funny picture from your mom, or an update on how late your friend will be to brunch.
It could be a debt collector.https://t.co/z6zffMz5rB
— KSL (@KSLcom) May 22, 2019
But CFPB claims that borrowers can opt-out of digital contact. They also say that debt collectors won’t be able to contact borrowers via social media platforms such as Facebook and Twitter.
Although the newly proposed debt collection rules will force some collectors to change their business model, some people within the industry believe that this is a good push, and even support caps on phone calls.
“This will cause the companies who rely too heavily on calls to change their business model. It’s nothing less than an earthquake in the industry.”
MarketWatch reports that consumers can dispute the proposed rules so long as the 90-day comment period is running. If the rules are approved, they will go into effect one year following the publishing of the final rule.