Tue, 30 May 2023

WASHINGTON D.C.: Following a ruling by the U.S. Consumer Financial Protection Bureau (CFPB), U.S. debt collectors can now contact millions of indebted Americans on social media and by text messaging.

While critics said the messages could be lost online or sent to the wrong recipients, as well as cause invasions of privacy and the rise of new hoaxes, advocates claim the change is a simple update to rules created in the 1970s.

The rule change, which was approved by the CFPB last year during the Trump administration, requires creditors to contact defaulters privately, meaning they can send direct messages but not post on public profiles.

Consumers can opt out of these messages, but creditors do not require permission to contact people. There are no rules regarding how many messages are allowed to be sent.

Lenders argued that this rule change was needed, since the Fair Debt Collection Practices Act, which regulates the industry, became law in 1977 and is outdated.

The new rule limits calls to seven per week for any particular debt, but people with multiple debts may still be called dozen of times. Debt collectors are also limited from contacting any consumer by phone within one week of speaking to them about a specific debt.

In a statement, Mark Neeb, CEO of the debt collector trade group ACA International, said the rule change is "a small step forward in modernizing communications with consumers," as reported by the BBC.

According to CBS News, the rule change could affect tens of millions of people in the United States.

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