In this illustration, the Facebook and Instagram apps are seen on the iPhone’s screen.
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Justin Sullivan / Getty Images
In this illustration, the Facebook and Instagram apps are seen on the iPhone’s screen.
Justin Sullivan / Getty Images
Next time someone tries to friend you on Facebook or follow you on Instagram, it could be a debt collector.
New rule Approved by the Consumer Financial Protection Bureau, effective Tuesday regulates how toll agencies can email and text people and message them on social media to seek payment of outstanding debts.
Kathleen L. Kraninger, the former CFPB director who oversaw the rule changes, said last year that they were a necessary update to the Fair Debt Collection Practices Act, which has been around for more than four decades.
“We ended up leaving 1977 behind and developing a collection system that works for consumers and industry in the modern world,” says Kraninger. said in a blog post.
But consumer advocates say borrowers risk missing out on important information about their debts or falling prey to illegal scams if they are contacted online.
“The regulations are really disappointing and worrisome in a number of ways,” said April Kuehnhoff, an attorney at the National Consumer Law Center.
New rules place limits on debt collectors
Under the new rules, debt collectors who contact you on social media must identify themselves as debt collectors but can try to join your network by sending you a friend request. Collectors must give you the option to opt-out of online contact, and any messages they send must be private – collectors cannot post on your page if your contacts or the public have can see it.
Collection agencies can also email and text the debtor, but must still provide the ability to opt-out. Industry officials hailed the move as a welcome change to outdated methods currently used by the collectors industry.
“Consumers in the collection process deserve to be on a level playing field with others in the financial services market with recognition that favors email and text messaging over outdated methods.” such as faxing as outlined in applicable law,” Mark Neeb, CEO of ACA International, a trade association for debt collectors, said in a statement.
Proponents argue that consumers will pay the price
Kuehnhoff said consumers should have been given the ability to opt-in to electronic messages rather than being forced to opt out. She suggests that consumers who don’t check social media often or miss emails may not see important information about a debt. Many also don’t have regular Internet access, she added.
Allowing debt collectors to email, text, and use social media to contact consumers also gives criminals a new avenue to try to trick people out of their money, a new tactic. segment that Kuehnhoff expects to increase in the future.
“I actually received my first spam debt collection email even before the new regulations went into effect,” she said. “So certainly we should be more anticipating bad guys trying to scam people into paying them for alleged debts.”
Kuehnhoff suggests that consumers shouldn’t click on links from people they don’t know, and said they can report any problems with debt collection messages to the CFPB.
The new rules come under the Trump administration, as the office becomes more business-friendly than it once was. Kraninger resignation in January at the request of President Biden, who nominated Rohit Chopra as the agency’s new director.
The new rules also put a limit on how often debt collectors can call you for the first time. Dealers will be limited to seven calls per week per account in the collection.
