Buzz
The Consumer Financial Protection Bureau is working on bringing debt collector regulations into the digital era with its proposal for new rules. While this clarification on what’s allowed and what’s not is a positive step, some of the changes might not be to your liking.
Positive Changes
Restrictions on phone calls
A debt collector is allowed to call you up to seven times per week for each unpaid debt. However, if you answer and speak with them, they can’t call again for another week. Currently, they can call you daily if they choose to. Yes, every single day!
Clearer Documentation
The new rule would require debt collectors to provide a detailed bill along with a simple, understandable guide explaining your rights and how to dispute the charges.
Additional Legal Safeguards—Sort Of
The proposed rule would prevent debt collectors from reporting your debt to credit agencies until they have notified you of the outstanding balance and your overdue status.
The CFPB also intends to stop debt collectors from suing you over time-barred debt, which refers to an unpaid bill that has surpassed the statute of limitations for collection (typically between three and ten years). Even though the right to sue will be removed, collectors can still pursue these “zombie” debts.
Here’s where it gets pretty unpleasant
The new regulation would explicitly state that debt collectors are allowed to reach out to you via email and text message.
The original Fair Debt Collection Practices Act, established in 1977, predates the widespread use of email, texting, mobile phones, and the internet. As a result, it doesn’t restrict collectors from using these methods to contact you about overdue payments, simply because they weren’t even considered at the time.
“The FDCPA specifically addressed the use of postcards, collect calls, and telegrams,” said bureau head Kathleen Kraninger at a town hall event discussing the updates. Kraninger emphasized that allowing text and email communication, rather than relying solely on phone calls, is more convenient for individuals.
Ultimately, it will be your responsibility to opt out of communication methods you don’t want to receive. The proposed rule aims to impose limits to curb harassment and simplify setting your preferences. However, don’t expect to receive a form in the mail to choose how you’d like to be contacted by debt collectors. They’ll likely begin texting and emailing you, waiting for you to opt out using the “unsubscribe” link that Kraninger confirms will be included in all emails and text messages.
“Real change would require consumers to opt in, not out,” said Melissa Stegman, senior policy counsel at the Center for Responsible Lending, in a press release. The National Consumer Law Center has also voiced concerns. “The proposed rule allows essential notices to be sent via email to consumers who may not have consistent internet access,” said Margot Saunders, an attorney at the organization, in a statement. “Many low-income consumers rely on cell phones that don’t offer easy access to email or sufficient data, unlike wealthier individuals.”
The CFPB has been on a troubling path of failing to adequately support consumers since President Trump took charge of the agency. The CFPB scrapped the fiduciary rule, rolled back the ability to repay requirement for lending, and didn’t ensure that there would be enough donuts for the entire class.
At this point, I’m not even upset anymore; I’m just let down.
How to challenge the proposal
The debt collection proposal is open for public comment, and once it’s finalized, there will be a year-long waiting period before the new rules come into effect.
But can we take a moment to discuss how submitting a comment works? Because honestly, the process is a bit questionable.
The CFPB has issued this notice along with a list of issues that are open for public comment.
When you select your issue of interest, there’s no clear guide on how to submit your comment. The only option available is a single open opportunity that leads to an external formal comment form. If you feel strongly about something and want to share with the CFPB, you’re on your own. (I’ve opted for the endless abyss of the internet.)
In the meantime, cling to the current regulations
At the moment, the current rules for debt collectors are still in place:
They cannot call before 8 a.m. or after 9 p.m.
They cannot contact you at work if you ask them not to.
They cannot intimidate, threaten, or share your debt with others.
They must cease contact if you request in writing for them to stop.
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