For the first time in 40 years, the federal government is changing the rules for debt collectors. On Tuesday, the Trump administration proposed changes to the long-held rules. These rules haven’t left anyone particularly happy. Both the consumer groups and debt collectors are unhappy with these changes.
These changes allow debt collectors to send an unlimited amount of emails and texts to get the attention of borrowers who are past-due. At the same time, it also lowers the number of phone calls they can make each week. Now you can see why neither side is happy about these rule changes.
These new regulations update the former Fair Debt Collection Practices Act, which was signed back in 1977. It was created to help prevent citizens from being unduly harassed just because they owe on a debt. For example, one of the rules prevents debt collectors from calling during certain times of the day or continuously throughout the day.
This new law would allow debt collectors to only call a certain amount of times each week. That limits their ability to have direct contact with the debtor. But the new law also allows for an unlimited number of texts and emails. Most consumers would probably find this law a little better for them. Emails and texts are easier to ignore than phone calls.
Modernizing the Law for Debt Collectors
As digital technology grows, it’s creating a lot of legal gray area. Debt collectors actually asked the federal government to give a greater consent on what’s legal and what’s not. They may not appreciate the lower number of phone calls, but now have a better understanding of the law. Yet, this new attempt was meant to update a law from the 1970s.
Kathleen Kraninger, the director of the CFPB, said in a statement that the new rules aim to “modernize the legal regime for debt collection.”
“The Bureau 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,” Kraninger said. Debt collectors can now only call consumers no more than seven times per week. If they manage to reach the consumer during that time, they have to wait another seven days before calling again.
A New Age of Collection
As stated before, debt collectors wanted a better understanding of how they can contact consumers. These new rules will update the existing law and give consumers a bit of a break. If you have an outstanding debt, this must be a relief. It even allows consumers to ‘opt-out’ to prevent harassment.
The new rules don’t just impact calls, texts, and emails. It also took a look at social media. The new rules bar debt collectors from using any public platform to collect debts. That’s a good thing, because the last thing anyone wants are the collectors announcing your debt to the world.
“The Bureau believes that communications or attempts to communicate by social media platforms that are viewable by a person other than a person with whom a debt collector may communicate … risk exposing a consumer’s affairs to the public,” the proposal states, adding that such conduct could “have the natural consequence of harassing, oppressing, or abusing the consumer.”
Mixed Feelings
These new rules are a bit of a compromise for both sides of the conversation. The response, as stated, has been a bit mixed. They like the clarification of rules, but not necessarily the lack of available phone calls they can make. Phone calls have dominated the way debt collectors have done business for decades. Now they’re open to extend it to emails and texts.
“We’re very happy to see that email, text messages and voicemail are addressed, with clear guidance about how to use them lawfully. That’s a major step forward,” Jan Stieger of the Receivables Management Association International, a trade association which represents debt collectors, told The New York Times.
Leah Dempsey of industry lobbying group ACA International took issue, however, with the cap on the number of calls debt collectors can make per week, calling the figure “arbitrary.” “The cap would unnecessarily impede communications with consumers,” Dempsey said.
