Debt collectors would be able to text and email about missed payments under proposal

Under a proposed rule, debt collectors would be able to call you up to seven times a week, text, email and private message you about your outstanding debt.

The Consumer Financial Protection Bureau announced Tuesday that it's looking to update the Fair Debt Collection Practices Act and its proposal "would provide consumers with clear protections against harassment by debt collectors and straightforward options to address or dispute debts."

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Bureau director Kathleen Kraninger called it a move "to modernize the legal regime for debt collection," saying in a statement that they're "taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations."

The proposal limits the number of calls debt collectors may place to reach consumers in a week to seven and clarifies how collectors "may communicate lawfully using newer technologies, such as voicemails, emails and text messages" that have developed since the act passed in 1977.

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The frequency limits for phone calls would not apply to emails or text messages. However, since all consumers don't have unlimited messaging this could cause some to incur fees.

"For these consumers, receiving a text message from a debt collector may be similar to accepting a collect call from a debt collector," the 538-page draft rule notes. "It may be unfair or unconscionable for a debt collector to send a consumer a written electronic communication, such as an email or text message, without providing an unsubscribe option."

Under the proposal, there would be a way to opt-out of the email and texts and specify times of day that work best for phone calls.

The proposed rules

Consumer Financial Protection Bureau is proposing changes to the Fair Debt Collection Practices Act. The full proposal is 538 pages, but here are four proposed changes:

• Establish a clear rule limiting call attempts and telephone conversations: The proposed rule generally would limit debt collectors to no more than seven attempts by telephone per week to reach a consumer about a specific debt. Once a telephone conversation between the debt collector and consumer takes place, the debt collector must wait at least a week before calling the consumer again. 
• Clarify consumer protection requirements for certain consumer-facing debt collection disclosures: The proposed rule would require debt collectors to send consumers a disclosure with certain information about the debt and related consumer protections. This information would include, for example, an itemization of the debt and plain-language information about how a consumer may respond to a collection attempt, including by disputing the debt.
• Clarify how debt collectors can communicate with consumers: The proposed rule would clarify how debt collectors may lawfully use newer communication technologies, such as voicemails, emails and text messages, to communicate with consumers and would protect consumers who do not wish to receive such communications by, among other things, allowing them to unsubscribe to future communications through these methods.
• Prohibit suits and threats of suit on time-barred debts and require communication before credit reporting: The proposed rule would prohibit a debt collector from suing or threatening to sue a consumer to collect a debt if the debt collector knows or should know that the statute of limitations has expired. The proposed rule also would prohibit a debt collector from furnishing information about a debt to a consumer reporting agency unless the debt collector has communicated about the debt to the consumer, such as by sending the consumer a letter. 

Source: Consumer Financial Protection Bureau

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