Perhaps lost in the shuffle of news detailing the COVID-19 pandemic and the presidential election was the release of a rule by the Consumer Financial Protection Bureau that aimed to modernize how debt collection is conducted across the United States. The release of the rule is the first time that the debt collection process has been overhauled since the primary law governing debt collection — the Fair Debt Collection Practices Act — went into effect more than four decades ago.
The FDCPA as it is known is so out-dated, it references collect calls and telegrams, and when was the last time you used either of those, or even thought about them? The release of the new rule from the CFPB allows for collectors and consumers to communicate using email and text messages — communication channels that people prefer more than letters and phone calls. Text messaging and email allow consumers to engage with a debt collector when they want to — on their timeline and when it is convenient for them. It puts more control in the hands of consumers and establishes firm guidelines for how and when collectors can contact consumers while also providing consumers with the opportunity to opt out of receiving such messages at any point in time.
You may have noticed articles claiming that debt collectors would now be able to contact consumers using social media and that consumers would see friend requests and posts on their walls and timelines from collectors, but that simply is not true. Collectors will be able to send private messages to consumers using social media channels, just like sending an email, but are prohibited from disclosing the existence of a debt to any third party.
You may also notice collectors leaving more voicemail messages than before, too. The CFPB is allowing voicemails, but only if they contain specific information delivered in a specific manner.
One other important change you may notice is a new type of collection letter that will be sent. The collection letter will include important information about your debt and instructions if you think there is a problem with the debt or if you wish to dispute it.
The rule put forth by the CFPB is not due to go into effect until this coming November, but you may start noticing changes before that as collection agencies adjust their operations to comply with the rule. All of these changes should help consumers and collectors communicate more effectively, which can only help improve the collection process.