Proposed Debt Collection Rules Permit Debt Collectors to Send You Unlimited Texts, Emails

Inside Subprime: May 15, 2019

By Aubrey Sitler

In early May, the Consumer Financial Protection Bureau (CFPB), proposed new rules for the debt collection industry. Following an announcement earlier this year that these rules were forthcoming, many people in the industry anticipated that these rules would include regulation—or lack thereof—of consumers’ rights and protections and the tactics debt collectors use to contact consumers.

The 538-page proposed rule to update regulations governing the $11 billion debt collection industry was released on May 7, 2019, and advocates for reasonable consumer privacy rights are not happy with some of its contents.

Specifically, debt collectors would be able to call debtors up to seven times a week, though upon making contact, they would be required to wait at least a week before calling back again.

Under the proposed rule, debt collectors would also gain the right to use unlimited email and text messaging to reach consumers. The rule acknowledges that these communications could end up constituting harassment or abusive practices, but unlike communication by phone call, there is currently no proposed cap on the number that can be sent. Although texts and email messages would be required to include a process for debtors to opt out of that type of communication, this is still a major win for debt collectors.

Consumer rights advocates also point out that the rule does not go far enough to prevent other types of abuse that have historically run rampant in the industry.

According to Suzanne Martindale, a senior lawyer for Consumer Reports, “The C.F.P.B.’s proposal does nothing to ensure debt collectors document that they are attempting to collect from the right person, for the right amount… By ignoring this central problem with our broken debt collection system, the C.F.P.B. is failing to fulfill its statutory mission to protect consumers.”

Debt collectors are already using mobile technology to contact those who owe them money, despite ambiguity over whether or not they are supposed to be able to. Christopher Fultz, an Ohio paramedic, experienced just that—a text with his name in capital letters with a link to a website that asked for his social security number. Only after clicking it did he realize it was from a debt collector who had been calling and leaving threatening voicemails. “I was appalled. They can’t send text messages if it’s a debt collector,” Fultz told the Washington Post. “It was just shocking that they would do that. It felt like a scam.” After filing a lawsuit, the debt collection company settled and paid him $3,500.

Over 70 million Americans have a debt in collections. In 2018, the CFPB reported receiving over 80,000 complaints about collection tactics.

According to Kraninger, the CFPB intends to “modernize the legal regime for debt collection” with the proposed new rules. If implemented, this update will be the first in the over-40 years since the Fair Debt Collection Practices Act was implemented—well before the advent of mobile communications, let alone the Internet, emailing, and texting.

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