New changes proposed to debt collection efforts

Debt collectors may soon add a new weapon to their arsenal for collecting money from consumer debtors. The Consumer Financial Protection Bureau (CFPB), the agency tasked with protecting consumers that was founded in the wake of the country’s most recent financial crisis, has proposed some new industry rules.

One proposed change is to allow debt collectors to send debtors emails and texts regarding their overdue accounts.

The debt collection industry is a major business force in the United States, raking in nearly 11 billion and employing nearly 120,000 people to nudge debtors into making their overdue payments. Critics of the CFPB claim it has undergone a sea change and morphed from a consumer protection agency under the current presidential administration into an entity that welcomes fewer regulations for collecting money from consumers.

The CFPB counters that the Fair Debt Collection Practices Act (FDCPA) badly needs to be updated to reflect current technological advances, which include texts and emails, the agency director urged in a recent speech. Since the FDCPA became law in 1977, there have been no tweaks to bring it more in line with today’s common modes of communication.

The director argued that the law came into effect “the same year that Steve Jobs introduced the world to the idea of a personal computer with the design of the Apple II. Phone booths were on almost every corner and cellphones were not even imaginable.”

But what restrictions would be put on the proposed changes are unclear. How many emails and texts would be allowed per day for each delinquent account? Would people soon find their inboxes stuffed with collection emails? What about the elderly and those with government-subsidized phone accounts with limited texting? Could their communication efforts be stymied by an abusive number of texts?

How this will ultimately play out remains uncertain, but those who are contacted may want to look into any potential abuses that may run afoul of the laws governing collection practices.