Senators say Fair Debt Collection Practices Act proposal puts industry ahead of consumers

LOS ANGELES – More than 20 U.S. senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal  that would allow debt collectors to send unlimited texts and emails to consumers, as well as call them seven times a week per debt.

Led by Sens. Bob Menendez, D-N.J., and Sherrod Brown, D-Ohio, 19 Democratic and two Independent senators have signed a letter expressing their concerns that the proposed update to the Fair Debt Collection Practices Act would allow debt collectors to contact consumers more than they already do. Signees include 2020 presidential hopefuls Sens. Kamala Harris, D-Calif.; Kristin Gillibrand, D-N.Y.; Cory Booker, D-N.J.; Elizabeth Warren, D-Mass.; and Bernie Sanders, I-Vt. Read the letter in its entirety at the bottom of this article.

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In the letter to CFPB Director Kathleen Kraninger, the senators express concerns over the cost of sending text messages to consumers who do not have unlimited texting wireless plans and have to pay per text.

“By allowing debt collectors to send consumers unlimited text messages and emails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive communications,” the senators wrote in the letter. “Furthermore, since the CFPB is not requiring collectors to use free-to-end-user text messaging, the CFPB is placing the cost burden of these text messages on the consumer.” 

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They also questioned the safety of emailing consumers and asking them to click on hyperlinks, alluding to potential scammers replicating the strategy, as well as possible barriers to getting in contact with the intended consumer. 

“Requiring consumers to receive information by clicking on hyperlinks in electronic communications from unknown parties also raises security concerns. Additionally, the assumption that electronic communications are received by a consumer as long as they are not returned 'undeliverable' ignores the reality of mail filters and other communication failures that are no fault of the consumer. The rule authorizes new forms of communication between debt collectors and consumers without extending essential consumer protections, creating a situation that is ripe for consumer harm.”

The proposed changes are a move “to modernize the legal regime for debt collection," Kraninger, saying in a statement that the CFPB is "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."

In addition to the unlimited texts and emails, and limiting collectors to seven calls a week per debt, the proposal would require debt collectors to wait a week to call a consumer once they have contacted them. The changes also allow consumers to unsubscribe from voicemails, texts and emails from debt collectors, and prohibit a collector from threatening to sue the consumer to collect a debt if the collector knows the statute of limitations has expired. The complete proposal is over 500 pages long. 

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Read the full letter below:

As it is currently written, the proposed debt collection rule will only exacerbate and increase troubling harassment tactics. By allowing debt collectors to send consumers unlimited text messages and emails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive communications. Furthermore, since the CFPB is not requiring collectors to use free-to-end-user text messaging, the CFPB is placing the cost burden of these text messages on the consumer. 

Requiring consumers to receive information by clicking on hyperlinks in electronic communications from unknown parties also raises security concerns. Additionally, the assumption that electronic communications are received by a consumer as long as they are not returned “undeliverable” ignores the reality of mail filters and other communication failures that are no fault of the consumer. The rule authorizes new forms of communication between debt collectors and consumers without extending essential consumer protections, creating a situation that is ripe for consumer harm. 

We also are concerned that the CFPB’s proposed debt collection rule effectively permits debt collectors to inundate consumers with calls. The proposed rule allows a debt collector to call a consumer seven times a week per debt. For a consumer with six medical debts, the proposed rule means that the consumer could receive up to 42 calls per week. Furthermore, creating an exemption for “limited content” messages that could be overheard on a voicemail or delivered to third parties like an employer is an invasion of basic privacy that should not be endorsed by the Bureau.

The rule also weakens protections for consumers whose debts are no longer enforceable under state or federal law. Rather than simply banning collection of time-barred debt by third party collectors, the CFPB’s rule provides collectors with a loophole to mislead borrowers into unknowingly accepting liability for those debts. Because the rule only prohibits filing or threatening a lawsuit if the collector “knows or should know” that debt is not enforceable, the Bureau’s failure to include a verification and substantiation requirement could encourage collectors to practice willful ignorance about the status of debt they collect. If a consumer is deceived into even a partial payment of an unenforceable debt, the payment can restart the clock and make the consumer liable in court for the entire amount.

Finally, recent enforcement actions by the Bureau demonstrate that attorneys who engage in debt collection must be held to a higher standard, not be granted a safe harbor to engage in abusive and deceptive practices. It is especially abhorrent that in a climate where forced arbitration regularly denies consumers their right to court proceedings that debt collectors can inappropriately threaten court actions without risk of penalty for unfair, deceptive or abusive practices.

Given the number of American families harmed by abusive debt collection practices, we request that you reconsider this rulemaking and pursue more meaningful reforms that put consumers, not the debt collection industry, first. A serious proposal from the CFPB would create fairness for the good actors in the debt collection marketplace, and ensure that hardworking families keep their paychecks rather than line the pockets of predatory collection firms.

Signed by: Bob Menendez (D-N.J.), Sherrod Brown (D-Ohio), Catherine Cortez Masto (D-Nev.), Kristin Gillibrand (D-N.Y.), Cory Booker (D-N.J.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), Angus King (I-Vt.), Tammy Duckworth (D-Ill.), Dianne Feinstein (D-Calif.), Elizabeth Warren (D-Mass.), Ben Cardin (D-Md.), Kamala Harris (D-Calif.), Tammy Baldwin (D-Wisc.), Edward Markey (D-Mass.), Doug Jones (D-Ala.), Tina Smith (D-Minn.), Jack Reed (D-R.I.), Richard Durbin (D-Ill.), Bernie Sanders (I-Vt), and Sheldon Whitehouse (D-R.I.).