New Debt-Collection Rules: What They Mean for Consumers

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For one thing, they allow loan borrowers to contact you on social media. But they have to tell you who they are.

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“Consumers need to be educated about what to expect and how to protect themselves,” says Leslie Tyne, a New York-based debt-relief attorney.

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Here are answers to frequently asked questions about how the new rules affect debt collection.

How can borrowers contact me?

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Debt collectors can now contact you through email, text message and social media, as well as through traditional forms of communication such as telephone calls or postal mail.

Is there a limit to how borrowers can contact me online or via text or email?

Yes. Borrowers should identify themselves as such. Plus, any messages they send must be private—so they can’t broadcast your loan to your Facebook wall or Twitter feed, for example. However, they may try to unfriend you on social media, provided they tell you they’re about to take a loan. They must also give you the option to opt out of these communications. Debt collectors who violate acceptable practices are subject to enforcement by the Federal Trade Commission and may also be held accountable for state-law violations. Consumers may be able to sue the debt collector in state or federal court, although there are time limits.

How many times can a debt collector call me?

Under the new rules, borrowers cannot attempt to make more than seven calls regarding a particular loan within a period of seven days. If you do not answer them, that restriction applies; According to the CFPB, if you do, they cannot call you within seven days after having a phone conversation about a particular loan. Keep in mind that these restrictions do not apply to text messages, emails, and other types of media.

Are there potential downsides for consumers with the new debt-collector rules?

Anything can happen, says Ms. Tayne. For example, you go through the trouble of opting out of these communications, and people who don’t regularly check social media or miss an email may fail to see important information about a loan. Huh. Ms Tayne says with the new ability to reach people online, via email and text, there may be worse actors who are trying to trick people into paying them money on alleged loans.

How can I verify that the debt collector is legitimate?

Ms. Tayne says to start by asking for the name, phone number and physical address of the debt-collection agency for which the collector is working. Technically you don’t need to ask because according to the CFPB, you are required to provide certain information when they first communicate with you or shortly thereafter, usually within five days. This includes the name and postal information of the debt collector, the name of the creditor and the loan amount. You shouldn’t give any personal information to borrowers until the loan has been sufficiently confirmed and the agency is legitimate, says Ms. Tayne.

How else can I avoid debt collection scams?

In addition to the debt-collection agency’s verification and proof of loan, it is also advisable to contact the original lender to discuss the details of whether your account should be in collections, which is hired to contact you. and your debt status, says Ms. Tayne.

What if I do not recognize the loan?

If you do not recognize the loan, you are entitled to request more information, says Ms. Tayne. It’s a good idea to submit a written request for this additional information for your records, she adds.

Can borrowers threaten me?

No way. It is illegal for debt collectors to threaten or harass you, use obscene language, make false or deceptive representations, or use inappropriate behavior. So, for example, they can’t claim that you’ll be arrested, threaten to suspend your driver’s license, or say that if you don’t pay promptly, they can call your employer. Will call, according to the FTC. These are automatic red flags and should be reported to the FTC immediately. The borrowers are also not allowed to contact you during the time specified by you as inconvenient. It’s possible that legitimate debt collectors could sue you, but they still have to play by the rules. So, for example, they cannot claim that they will take legal action if it is not true. If you are sued, be sure to respond in person or through an attorney by the date specified in the court papers; Don’t ignore it, says the FTC.

What if the debt collector acts improperly or I suspect a scam?

You should report to the Federal Trade Commission any problems you have with a debt collector: Report Fraud.ftc.gov as well as on the Consumer Financial Protection Bureau consumerfinance.gov/complaint and your state attorney general, a list of which can be found here consumerresources.org/file-a-complaint,

Just remember that unfair or illegal behavior on the part of the debt collector doesn’t necessarily mean the debt will be erased, says Ms. Tayne.

Ms. Vinokur Munk is a writer in West Orange, NJ, she can be contacted at [email protected]

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