New Rules Proposed for Debt Collectors: What You Need to Know
More than 71 million US adults have debt in collections, almost 30% of the adult population. Complaints about collection tactics have increased and the government is ready to help people in debt. The Fair Debt Collection Practices Act, originally approved over 40 years ago, is a federal law that limits the behavior and action of third-party debt collections.
In May 2019, for the first time in a decade, federal regulators proposed new restrictions on abusive debt-collection practices like barraging customers with phone calls and texting to collect on expired debts.
Proposed rules released by the Consumer Financial Protection Bureau (CFPB) include:
- Limits on the number of times a creditor can call a consumer. Under the new rules, a debt collector cannot call more than seven times per week about a specific debt. Once a phone conversation takes place between the debt collector and the consumer, the collector must wait at least a week before calling again.
- Clarification on how debt collectors can communicate with consumers. Under the new rules, consumers who do not wish to be communicated with via newer technologies, such as voicemail, emails, or texts, can opt-out, or unsubscribe to future communications through these methods. Additionally, if consumers want to limit ways debt collectors contact them, for example, at a specific telephone number, while they are at work, or during certain hours, the rule clarifies how consumers may easily do so.
- Prohibition on suits and threats of suit on time-barred debts. Under the new rules, a debt collector is prohibited from suing or threatening to sue a consumer to collect a debt if the debt collector knows or should know that the statute of limitations has expired. The rule also prohibits a debt collector from furnishing information about a debt to a consumer reporting agency unless the debt collector has communicated about the debt to the consumer, such as by sending the consumer a letter.
Though these changes are not yet finalized, the CFPB is expected to so sometime later this year, or early in 2020.