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CFPB moves to limit debt collectors’ calls — but opens door to emails and texts

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The Consumer Financial Protection Bureau has proposed changes to how debt collectors can contact consumers. If finalized, some of the proposed changes to the 40-year-old Fair Debt Collection Practices Act would…

  • Limit the number of times a debt collector can attempt to call you to seven times per week
  • Require a debt collector to wait a week before calling again after reaching you by phone
  • Allow debt collectors to contact you by email, text and private-message on social media
  • Give consumers the ability to opt out of receiving such digital communications
  • Prohibit debt collectors from emailing people at their work email addresses (with some exceptions)

The CFPB says the proposed changes are a step forward because they clarify both the rules that debt collectors must follow and the rights that consumers have under the Fair Debt Collection Practices Act. But some consumer advocates are alarmed. While they support certain changes, they say others actually give debt collectors more legal support to carry out aggressive, potentially harmful tactics.

Want to know more?

Why is the CFPB proposing these changes now?

Millions of Americans have debts in collections, according to the CFPB. The Fair Debt Collection Practices Act outlines how debt collectors can contact people, but the law was enacted in 1977 — back in the days of landline phones and long before the arrival of email and social media.

This dated regulation has left debt collectors uncertain about how they can contact people beyond phone calls or mailed letters. In addition, other rules around communications have remained somewhat vague.

In a report to Congress about debt collection practices, the CFPB said it received more than 81,000 complaints last year about debt collection. The CFPB also says consumers file about 10,000 lawsuits against debt collectors each year alleging violations of the Fair Debt Collection Practices Act.

With the proposed changes, the CFPB said it aimed to provide clarity about how collectors can contact people using newer technologies, and how consumers can exercise their rights when it comes to debt collections.

What’s the concern?

Some consumer advocates are worried the proposed changes actually leave consumers less protected. For example, the proposed rules limit debt collectors to seven contact attempts per week by phone about a particular debt. In addition, the rules would restrict debt collectors to one phone conversation with a debtor per week about any one debt. But this means someone with multiple debts could still face dozens of calls every week.

“A student with eight loans could receive 56 calls per week,” National Consumer Law Center attorney Margot Saunders told the Wall Street Journal.

Another worry: The proposed rules don’t include limits on the amount of emails or text messages debt collectors can send — although the rules do specify that consumers can opt out of such electronic communications.

Some experts say the sum total of the proposed rule changes could be that they give debt collectors more and easier access to people with outstanding debts.

What’s next?

The CFPB’s proposed changes will be published in the Federal Register for public comment. After 90 days, the agency can finalize its changes to the debt collection rules.

In the meantime, you can learn more about your rights under the current version of the Fair Debt Collection Practices Act.