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Consumer Bureau proposes new rules limiting debt collector calls, but allowing emails, texts

Posted at 10:36 AM, May 08, 2019
and last updated 2019-05-08 10:36:18-04

The Consumer Financial Protection Bureau introduced a new set of rules this week that would restrict the number of calls a debt collector can make and allow them to reach consumers via email and text messages.

The 538-page proposal from the federal financial watchdog would limit debt collectors from placing more than seven calls per week to try and reach a consumer. Once they reach the consumer, collectors would be required to wait at least a week before calling again.

Under the new regulations, introduced Tuesday, debt collectors would be able to use emails and text messages to reach consumers, who would have the option to unsubscribe from receiving the messages.

The proposed rules, however, do not include a cap on the number of emails and texts collectors can send until a debtor opts out.

Debt collectors would not be allowed to contact consumers through work email addresses or social media.

Collectors would also be prohibited from suing or threatening to sue a consumer to collect a debt if the statute of limitations has expired.

“The Bureau is taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations,” CFPB Director Kathleen L. Kraninger said in a statement.

Consumers Union, the organization best known for its Consumer Reports, criticized the CFPB for not going far enough in its plan.

“The CFPB’s proposal does nothing to ensure debt collectors document that they are attempting to collect from the right person, for the right amount, and on a debt that they can lawfully recover,” Suzanne Martindale, senior policy counsel for Consumer Reports, said in a press release. “By ignoring this central problem with our broken debt collection system, the CFPB is failing to fulfill its statutory mission to protect consumers.”

The public will have 90 days to submit written comments on the CFPB’s proposal once it’s published in the Federal Register.

“As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in hearing all views so that we can develop a final rule that takes into account the feedback received,” Kraninger said.

The agency was inundated last year with about 81,500 complaints regarding first-party and third-party debt collection, according to its annual report from March. Common complaints from consumers were about attempts to collect a debt not owed and “communication tactics,” with the majority of people complaining about frequent calls.