Debt collectors can now use email, text, social media to seek repayment

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 took effect on Tuesday, address the use of newer communication technologies in debt collection and establish record retention requirements. 

This means collection agencies can now utilize email, text and social media methods to seek repayment of unpaid debts.

EARLIER: Debt collectors will be allowed to contact you via text, social media messaging, email by 2021

According to Kathleen L. Kraninger, the former CFPB director who oversaw the rule changes, the debt collection system was archaic and needed to be developed into a method that worked "for consumers and industry in the modern world." 

"Advances in technology, in particular, have transformed how we communicate, with cell phones enabling us to take a call or receive a text 24 hours a day in our neighborhood or on the other side of the globe. But debt collectors and consumers have been trapped in a time warp. They have been required to communicate with each other under standards Congress enacted in 1977. Until now," Kraninger wrote in a blog post.

The first rule, issued in October 2020, focuses on debt collection communications and clarifies the FDCPA’s prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. 

"Abuse or harassment by debt collectors is against the law, and the CFPB will be closely watching the marketplace for compliance. Consumers can submit a complaint about debt collection to the CFPB online or by calling 855-411-CFPB (2372)," a spokesperson with CFPB wrote in a statement to FOX Television Stations. 

Meanwhile, the second rule, issued in December 2020, clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications. The second rule also prohibits debt collectors from suing or threatening to sue consumers on time-barred debt. Additionally, the second rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.

"The CFPB is committed to informing consumers about their rights and protections under the rules and assisting debt collectors in implementing them," the agency wrote in a press release in July.