In 1977, bell-bottoms were popular, Jimmy Carter was president and Elvis died. That also was the year the Fair Debt Collections Practices Act passed — and it didn’t say if debt collectors could contact debtors via email, text or social media, all forms of communication the law couldn’t foresee.
But now, a 633-page rule published by the Consumer Finance Protection Bureau has bestowed some clarity on the four-decade-old law’s ramifications for the nation’s more than 8,000 modern collection companies: They can, in fact, use electronic communications as a means to contact debtors.
The rule says debt collectors can use text messages, emails and even private messaging on social media services to try and extract money from people. Collectors do, however, have to provide a simple way for consumers to opt out of the messages.
The law still prohibits “harassing and abusive and unfair debt collection practices,” but collectors can now contact debtors electronically up to seven times within seven consecutive days.
Consumer advocates are unhappy that the rule doesn’t require collectors to confirm the identity of the debtor — or the amount owed — before they try to collect it.
American Banker magazine reports the CFPB will publish another rule next month addressing so-called “zombie debt,” barring “collectors from suing or threatening to sue on debts they know or should know have exceeded the statute of limitations.”