Back in the day, if someone owed money to a creditor, they may have received seemingly relentless telephone calls from collection agencies. Now, many people don’t have landlines and may not even answer cellphone calls. Younger people, especially, are more likely to communicate via text.
Now the Consumer Financial Protection Bureau (CFPB) is proposing new rules for debt collectors that would allow them to text and email people who owe money. Those methods aren’t typically in current use because, as one industry official notes, “It’s not illegal but it’s fraught with a lot of potential pitfalls. The rules aren’t clear because there just aren’t any.”
The 1977 Fair Debt Collection Practices Act (FDCPA) that governs the nearly $11 billion debt collection industry is long overdue for some updates, according to the CFPB. Its director notes that in 1977, “[p]hone booths were on almost every corner and cell phones were not even imaginable.” The CFPB, which became the first federal agency to be able to issue substantive rules using that law, wasn’t created by Congress until 2010.
The industry official says that these new methods of contacting borrowers, if approved, wouldn’t be used to “deluge consumers with communications” but to “nudge” them. He notes that millennials will more likely respond to a text than a phone call.
However, some consumer advocates are concerned that debt collectors will do more than nudge — that they’ll flood people with texts and emails, in addition to phone calls. An attorney with Americans for Financial Reform says, “I’m really terrified the rule will say, ‘Now you can contact them 10 times a day.’”
If you’re being inundated by collection agencies because you’re unable to keep up with your debts, it may be time to consider whether bankruptcy may be the best option for you. An experienced bankruptcy attorney can review your options and help you find the best one for your situation.