These are challenging times, and you might find yourself unable to pay your bills. Missing payments or paying late ruins your credit. The stress of falling behind on payments and tanking your credit score can deprive you of sleep and even make you sick. The situation gets worse if your creditors have turned your account over to collections. At the end of October, the Consumer Financial Protection Bureau (CFPB) issued new rules for debt collectors. Here’s what you need to know.
Partly Good News
- You cannot be contacted more than seven times per week per account.
- If you have more than one account and they’ve all been sent to collections, the frequency limitation will not help you.
- The collector must give you seven days after your conversation before taking further action.
- You have the right to restrict the platform debt collectors use to contact you.
However, restrictions only apply to third-party debt collectors. Agents who work directly for the creditor are excluded from the new rules.
The New Rules for Debt Collectors Are Not Helpful
Consumer advocacy groups were quick to criticize the government’s action, noting their timing when everyone is hurting from the economic fallout created by the coronavirus pandemic. Rather than being helpful, the CFPB provided collectors with an expanded menu of portals through which to reach you.
Be Careful What You Post on Social Media
Debt collectors can reach you on your social media channels. In January 2021, your Twitter, Facebook, Instagram, and Snapchat channels can be used by collection agencies to send you messages about outstanding debt. There is no limit on the number of notices that can be sent via social media. Still, collectors are required to provide an opt-out mechanism.
It’s always a good idea to be careful about what you post on social media. But you don’t want to post photos or videos about your recent five-star vacation if you’re not paying your bills. It will be tough to prove your financial hardship claim when your creditors come to court armed with your social media posts.
What You Need to Do
- Confirm the Identity of the Sender
- Protect Your Identity
- Verify the Information
- Don’t be Threatened
- Set Boundaries
Permitting debt collectors to send texts and emails opens the door to more fraudsters. Verify who is calling. Ask for the collector’s licensing information and then check to be sure it is legitimate. If you are a victim of fraud, contact the FTC right away.
Never give out your social security number or birthdate. Don’t open attachments or click on links.
Ask your creditor to put the outstanding debt in writing. Request a copy of the loan document and other proof of the amount owed.
The new rules for debt collectors don’t permit threats of lawsuits. Only the creditor can go to court, and it’s illegal for the collector to threaten you with such action.
Collectors don’t have the right to contact you at work. If you receive a call, politely inform them that this is your work number and ask that they not call again. You can set the hours of your availability. For instance, ask that they not call you before 9 in the morning or after 9 in the evening.
If you find that you can’t keep up with your payments, the best thing to do is contact your creditor right away. Try to work something out. Ask to delay payments for a month or two. Negotiate a lower monthly payment until things improve. Contacting the creditor helps to protect your credit score. Lenders would prefer to work something out than go through the expense of collections. The new rules for debt collectors are not consumer-friendly, but remember, you still have rights.