New rule gives debt collectors unlimited electronic access

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There is good news and bad news about debt collection. The bad news: A new debt collection rule allows unlimited electronic access to contact consumers.

But the good news: The rule can eliminate “debt parking” by requiring debt collectors to contact consumers before posting debts on their credit reports.

Consumer action notes that due to the significant loss of jobs, particularly in low-income and minority populations, many people have found themselves in dire financial straits and face unpaid rent and overdue bills. These factors create a conducive environment for debt collectors. The federal government has passed a new rule that Consumer Action says will subject those who owe money to a potential flood of texts and emails from debt collectors. The rule will come into effect at the end of 2021.

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The Consumer Financial Protection Bureau to reign will allow debt collectors to text, email and even contact people through their social media accounts via direct message from November 2021. The CFPB has not imposed any limit on the number of times that a debt collector may attempt to contact consumers using these means.

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“The last thing consumers who are struggling to pay their bills need is to be besieged by debt collectors with the green light to harass them via text, email and social media,” said Consumer Action’s Director of National Priorities, Linda Sherry. “We hope that a reinvigorated CFPB – with consumer-focused leadership – will reverse some of the excesses extended to the industry.”

Consumer Action had urged the Bureau to require collectors to obtain consent from individuals before texting and emailing them about debts they likely owe. Instead, consumers have the option to opt out of being contacted via text, email, or social media after receiving these messages from debt collectors.

The new rule limits phone calls to seven attempts, or one actual conversation, per week per debt. The rule also covers how consumers should be notified of supported debts through the validation notice. The mandatory notice must clearly state the amount owed and how consumers can dispute the debts.

The decision recalls that collectors cannot sue, or even threaten to sue, a “prescribed” debt, for which the statute of limitations has already expired. The rule also prohibits collectors from “parking” debts on consumers’ credit reports before contacting people about the debt. Collectors should not notify the credit bureaus of a collection claim for at least 14 days after the notice is sent to the consumer, to see if the required notice has not been delivered. It is important for consumers to try to avoid having any negative items reported to a credit reporting agency.

If you want to know more, Consumer Action dissects the new rule into two parts in a recent issue of Consumer Action News: see Key changes. These rules update the implementation of the Fair Debt Collection Practices Act . Consumer Action also provides information on how to demand information about a debt in collections, how to prevent a debt collector from contacting you, and how to avoid reviving “zombie” debts. (To see Tips and Tools.)

Jeanette Pavini is an Emmy Award-winning journalist specializing in consumer information and protection. She is the author of “The Joy of $aving: Money Lessons I Learned From My Italian-American Father & 20 Years as a Consumer Reporter”. Jeanette is a regular contributor to TheStreet. His work includes reporting for CBS, MarketWatch, WSJ Sunday and USA Today. Jeanette has contributed to “The Today Show” and a variety of other media. You can follow her tips for saving on Facebook: Jeanette Pavini: The Joy of $aving community. Find links to his social media and his book on, Jeanette Pavini.com.

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