US government clears debt collectors to go after Americans through their social media accounts

Phone calls are so 1970s says Consumer Financial Protection Bureau

Debt collectors will be allowed to chase people over their social media accounts under new rules approved by the US Consumer Financial Protection Bureau (CFPB).

That means that your new Facebook friend request could come from an agency hounding you over that unpaid medical bill, next Twitter direct message chasing car payments, next Instagram interaction more financial than social.

There is some good news however: debt collectors are not allowed to post messages that can be seen publicly, and you are allowed to tell them not to use social media to contact you and they are legally obliged to stop.

But that hasn’t stopped an outcry, with Consumer Reports creating a petition on Tuesday to “stop abusive debt collection.” It warns: “Even if you don’t owe money, they could harass you.”

The rules were released at the end of October but had gone largely unnoticed outside the industry because there was no mention of “social media” in the CFPB’s announcement and you had to dig inside its 132-page report [PDF] to discover the crucial changes.

“The Consumer Financial Protection Bureau (Bureau) today issued a final rule to restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt,” the agency reported, adding that it “clarifies how the protections of the Fair Debt Collection Practices Act (FDCPA), which was passed in 1977, apply to newer communication technologies, such as email and text messages.”

That’s right: email and text messages are now also an official part of a debt collector’s arsenal, raising both privacy and harassment concerns. The rules also state that an agency can contact consumers by phone up to seven times a week about each debt owed.

Much-needed update

The CFPB claims that the new rules were the result of “a deliberative, thoughtful process spanning more than seven years and reflects engagement with consumer advocates, debt collectors, and other stakeholders.” It updates rules written 40 years ago, long before the advent of modern technology and smart phones.

But in the lengthy report and explanation on the new rules, it rejected significant public comment that social media should be completely off bounds for debt collectors, using the phrase “the Bureau declines to prohibit private social media communications and attempts to communicate” repeatedly in response to concerns.

As mentioned, however, the agency did agree that public social media messages are banned - and in that respect the rules provide clarity where there wasn’t much before. There have been numerous horror stories of people being publicly harassed and embarrassed over debts they didn't even owe, due to bad record keeping by debt agencies.

The rules also make it clear that if a debt collector needs to make a firm connection before sending a private message - for example sending a Facebook friend request or have you follow them on Twitter, to send a direct message, They are then obliged to identify themselves as a debt collector when asking for that connection.

And, as mentioned, consumers are allowed to tell a debt collector not to contact them over social media and they are obliged to stop - although of course, they will then just email, or text, or call.

Abuse controls

The CFPB is obviously concerned that the new rules may open the floodgates to people being hassled in an area that they view as online personal space and so has strengthened and clarified what is acceptable and not acceptable.

“Consumers may set limits on debt collection communications to reflect their preferences and the limits on communicating with third parties about a consumer’s debt,” it notes. “The rule requires debt collectors who communicate electronically to offer the consumer a reasonable and simple method to opt out of such communications at a specific email address or telephone number.”

It also goes into detail on its “general prohibition on harassing, oppressive, or abusive conduct” and notes that it also applies to “telephone calls as well as other communication media, such as email and text messages.”

The agency stepped back from approving a new rule that would give debt collectors legal protection “against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission” - in other words, people being threatened with a lawsuit that doesn’t exist.

The CFPB insists that the new rules provide “limits on debt collectors and clear rights for consumers” and that consumers “will have greater control when communicating with debt collectors.” But it’s fair to say that it may not feel like that when people find themselves being hassled on their social media accounts over debt. ®

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