WASHINGTON – New rules will now change the way debt collectors can contact consumers.
The rules, which were approved last year by the Consumer Financial Protection Bureau and came into effect on Tuesday, address the use of new communications technologies in debt collection and establish record retention requirements.
This means that collection agencies can now use email, text, and social media methods to seek repayment of unpaid debts.
According to Kathleen L. Kraninger, the former director of CFPB who oversaw the rule changes, the debt collection system was archaic and had to be developed into a method that works “for consumers and industry in the modern world. “.
“Technological advances, in particular, have transformed the way we communicate, with cell phones that allow us to take a call or receive a text 24 hours a day in our neighborhood or across the globe. But debt collectors and consumers have been trapped in a time warp. They were required to communicate with each other under standards adopted by Congress in 1977. So far, ”Kraninger written in a blog post.
The first rule, published in October 2020, focuses on debt collection communications and clarifies the FDCPA’s prohibitions on harassment and abuse, false or misleading statements, and unfair debt collection practices when collecting consumer debts.
“Abuse or harassment by debt collectors is against the law and CFPB will closely monitor market compliance. Consumers can file a debt collection complaint with the CFPB online or by calling 855-411-CFPB (2372), ”the CFPB spokesperson wrote in a statement to FOX TV stations.
Meanwhile, the second rule, published in December 2020, clarifies the information that debt collectors must provide to consumers at the start of collection communications. The second rule also prohibits debt collectors from suing or threatening to sue consumers for prescribed debts. Additionally, the second rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers before disclosing debt information to a consumer reporting agency.
“The CFPB is committed to informing consumers about their rights and protections under the rules and to assisting debt collectors in their implementation”, the agency wrote in a press release in July.