New rules for debt collectors could mean increased protections for consumers, but why are consumer advocacy groups and debt collection agencies both unhappy about the new proposed regulations?

Last month the Consumer Financial Protection Bureau (CFPB), a federal agency created to help ensure that financial institutions such as banks, credit card companies, and debt collectors did not abuse or harass consumers, issued a Notice of Proposed Rule-making (NPRM) to implement the Fair Debt Collection Practices Act (FDCPA). Just to review, the FDCPA was enacted in 1977; before personal computers, cell phones, e-mail, text messaging, and social media. So while it still provides some basic protections for consumers, it fails to take into account all the new technology that debt collectors can now use to harass and annoy people into paying a bill.

Harassing Cell Phone Calls

Under the current FDCPA, a debt collector is prohibited from allowing a consumers telephone to ring continuously in order to annoy them. However, what does this actually mean? The Act provides no clear language about how many times the phone can ring or how often a debt collector can call. When the FDCPA was enacted a debt collector might have placed a phone call to a person's home telephone during business hours (when they were likely at work or busy caring for the children) and left a message on the answering machine. This might not have been considered annoying. But today, with nearly 70% of the population carrying cell phones, calls during business hours, while people are busy with work and family, can be quite annoying.

That is why the law needs to be updated. Under the current law, when a consumer files a lawsuit against a collector for allowing a telephone to ring continuously, it is up to the judge to determine what constitutes ‘continuous ringing'. The new rule would take this decision partially out of judges' hands by specifying that a debt collector may call no more than seven times in a week. If the collector speaks with the consumer during one of those calls, they would then have to wait seven days before calling again. There is still no clarification about how many times a debt collector can let a phone ring before it is considered continuous ringing with the intent to annoy, but we all know what that red button on our cell phones is for.

Using “New” Technology

Social media, e-mail, computers, and text messaging may not be new, but as far as the FDCPA is concerned, they might was well be non-existent. This means that the Act may not prevent consumer abuse and harassment by a debt collector as long as he or she uses this “new” technology. For example, the Act specifies that a collector may not call you before 8:00 a.m. or after 9:00 p.m., but can they send you a text in the middle of the night? And how many times can they e-mail you? Can they text or e-mail you?

The new law is expected to allow debt collectors to communicate with consumers via text and e-mail, which may be exciting for collection agencies, but can give consumers some pause. While many of us may prefer communications from family, friends, and companies with whom we do business come in a digital form, most of us want the bill collectors to remain in the last century where landlines and letters are the preferred method of communication.