Consumer debt in the U.S. totaled $14.3 trillion in March 2020. With thousands of businesses shut down due to the coronavirus pandemic and a great deal of them permanently closing, many households are struggling to make ends meet.
Millions of Americans have had to skip payments on everything from their mortgages and utilities to auto loans and credit cards. While the government and lenders have been lenient, all of those bills will eventually come due and the debt collection calls will begin.
And a year from now, those collectors will have even more ways to contact people whose bills are past due. A new rule finalized by the Consumer Financial Protection Bureau (CFPB) will permit them to call debtors up to seven times per week (or more, in certain circumstances) and send unlimited text messages, emails and private social media posts. The rule goes into effect in October 2021.
The new rule clarifies how debt collectors can use modern technology in attempts to collect debts owed. It provides guidelines regarding how email, text messages and social media can be used to contact consumers — as well as ways for consumers to limit these communications. For instance, consumers will have the ability to unsubscribe from emails and stop text messages.
The CFPB has included provisions on other topics, such as disputes and record retention, and intends to issue a second rule focused on consumer disclosures in December 2020.
There are limits on the number of calls a debt collector can place within a week because of the 1977 Fair Debt Collection Practices Act, which was created to prohibit harassing, abusive and unfair debt collection practices. Consumers can report debt collectors that use abusive, unfair or deceptive practices when collecting debts to the Federal Trade Commission.
Consumer Reports offers several tips for anyone being contacted by debt collectors, including:
- Requesting verification of the debt
- Obtaining a copy of your credit report
- Negotiating a lower repayment
- Not providing your personal information