Can Debt Collectors contact me on social media? CFPB’s Final Rule for the Fair Debt Collection Practices Act.
Years ago, in 1997, Congress first enacted the FDCPA or Fair Debt Collection Practices Act. The goal behind the act was to prevent any abusive debt collection practices and to ensure that any “fair” debt collectors weren’t competitively disadvantaged in the market.
Decades later, on October 30, 2020, the CFPB or Consumer Financial Protection Bureau issued a “final rule” intended to help clarify and restate certain prohibitions on harassment and abuse. This final rule has cleared up some legal loopholes that have been exploited before. Let’s break down what this means for the debt collection industry going forward.
What the Final Rule Says
Broadly speaking, the final rule of the FDCPA addresses multiple concerns surrounding unfair practices and misleading representations of certain debt collection practices or communications. The big items include:
- The definition of a so-called “safe harbor” for debt collectors when leaving telephone voicemails. This allows debt collectors to leave voicemails without accidentally violating the FDCPA
- Certain exclusions for people who collect on debt purchased for themselves. This only applies if they don’t collect debt for other entities
- Implementation of new rules for contacting consumers through text messaging and email – specifically, there are limitations surrounding how email addresses may be obtained legally
- New rules that prevent debt collectors from using fake names
- New rules that address certain communication loopholes with consumers through social media channels, like Facebook messenger
- Guidelines for debt collectors if they need to handle several disputes with the same account and for sending certain disclosures electronically
- New requirements for debt collectors to retain records in compliance with the FDCPA
The Safe Harbor Provision
By far, one of the biggest developments from the FDCPA’s final rule was the above “safe harbor” provision. This was based on certain landmark legal cases, including Hosseinzadeh vs. M.R.S. Assocs., Inc. and Foti v. NCO Financial Systems, Inc.
In a nutshell, the final rule addresses and incompatibility where previously debt collectors were required to include their identity and issue a “Mini-Miranda” warning in the voicemail. By doing so, they were also forced to violate the FDCPA’s previous prohibitions concerning third-party disclosures.
This resulted in many debt collectors ceasing to leave voicemails due to the inherent risk.
The final rule’s Regulation F includes a safe harbor provision. This lays out in detail how debt collectors can leave messages to consumers without risking violating the other aspects of the FDCPA. This will allow debt collectors to communicate with consumers by phone once again, and in a fair way.
More broadly, the final rule for the FDCPA includes over 500 pages of analyses to address many aspects of the original rules and potential loopholes or exploits. Another 50 pages include “Official Interpretations” to help debt collectors navigate complex situations by describing specific examples for rule application.
The hope by the CFPB is that the final rule will help debt collectors adhere to the tenets of the FDCPA more readily while also feeling fairly treated by the legislation.
Furthermore, it serves as protection against future litigation issues. Even if courts don’t have codified rules to reference with particular cases or complex scenarios, they can now look to the CFPB’s final rule for the FDCPA and determine the intent of the rules and how they may be applied in a given case.
Regulation F Impacts
The Regulation F section of the final rule may have a wide-ranging impact throughout the debt collection industry. Many debt collection companies are now scrambling to address their different processes and adapt to the new rules to stay relevant.
The CFPB is also treating Regulation F as a significant rule in and of itself, and is gathering feedback both from debt collectors and consumers. Specifically, the CFPB is looking to gather feedback on:
- If consumers are pleased with the changes and “feel” less harassed by debt collector calls
- If debt collectors can understand communication guidelines with the FDCPA better than before
- If litigation is reduced due to the greater clarity from the FDCPA’s final rule
- If there are any unanticipated costs to either the debt collection industry or consumers
Social Media and Debt Collection
Many people use social media websites like Facebook, Twitter, and Instagram in some form and often use it as a communication tool. Rules finalized at the end of October allow debt collectors to attempt to contact debtors via social media using rules and methods similar to their requirements for phone calls.
Debt collectors can attempt to friend you, but only if identifying themselves as a debt collector first, much like the statement they are required to make over the phone. A debt collector cannot use a fake social media profile or “trick” people you know into providing information about your location or assets. They also may not make public posts implying anything about your debt.
The new rule is still in works but is unpopular with social media users and consumer protection firms. They believe that debtors should have a safe haven from debt collectors often unrelenting stream of phone calls, and that money motivated collectors will break rules that their debtors didn’t know existed. Considering that some debits have multiple debts, this means that each collector can attempt to friend or message a social media user, resulting in the same pursuit many customers dislike about repeated phone calls.
Consumer protection programs offer some advice too:
- Always assume that your debt collector is watching your social media. You could consider setting your profile to private to non-friends.
- Don’t include information about your location, employment, or financial situation in your profile.
- Keep any communications you receive from debt collectors. Simply not deleting messages from debt collectors is sufficient.
If you are contacted via social media regarding a debt, there are a few things you should and shouldn’t do.
- Request verification of the debt. This process should also take place over the phone. Request a detailed account of why you owe someone money, and who you owe the money to. You should be able to receive this information via the mail.
- Don’t immediately offer to start paying on an old debt. Creditors are motivated to make you move quickly because they only have a certain amount of time to legally pursue you to pay your debt. Check your state laws regarding how many years you have to pay a debt. If you do make a payment, you effectively recognize the debt and are then required to repay it in most states.
- Keep info private. Offering a social security number, birth date, or any payment methods is admitting to the debt, which they must prove exists.
Collection companies applaud the new law. They believe the new laws allow them to level the technology playing field for their communications that have been limited to fax, phone, and email and include platforms more readily used by their debits. The new law also requires customers to have some way to opt out from communication.
Ultimately, debt collection companies and consumers should both be on the lookout for future developments. While this “final rule” has already rolled out, the CFPB is also looking to issue another final rule in December of 2020. This will focus on providing clarity and offer different interpretations for consumer disclosure requirements, which may significantly impact the wider debt collection industry once again.