Proposal allows unlimited collection texts, email messages – The Fayetteville Observer
Christopher Fultz peeked at his cell phone while on a hiatus from his paramedic job and saw an unusual text with his name in capital letters.
Click the link, the message said, from a number he didn’t know.
Fultz, 36, initially ignored the text but eventually followed the link that led to a website that asked for his social security number. Fultz said he then discovered that a debt collector who repeatedly called and left what Fultz viewed as threatening voicemails had found a new way into his life.
“I was horrified. You can’t text messages if it’s a debt collector,” said Fultz of Ohio. “It was just shocking that they should do that. It felt like a scam.” Fultz filed a lawsuit and the debt collection company paid him $ 3,500 as part of a settlement.
For decades, debt collection agencies have relied on a limited number of means of communication: landlines and US mail. Now they are finding increasingly personal ways to reach millions of American regulators who have allegedly been contacted by debt collection agencies. Some debt collection companies fear that these contacts fall into a legal gray area, as the Fair Inkasso Practices Act was written more than 40 years ago and does not directly address digital communication.
The Consumer Financial Protection Bureau on Tuesday proposed rules that would give the industry the green light to send consumers unlimited amounts of text and email, accelerating a trend that the Watchdog Bureau said could benefit everyone.
The proposal is a victory for debt collection companies like TrueAccord of San Francisco. Instead of making a deluge of phone calls, TrueAccord sends millions of emails and text messages every month. Next, it hopes to contact defaulting consumers through chat applications like WhatsApp.
“If you have a good online digital presence, you don’t have to make these calls,” said Ohad Samet, co-founder and CEO of the company. “The only question that arises here is why not all others have switched to digital first models yet.”
But this digital-first approach has alarmed consumer advocates who fear that the CFPB could offer an industry known for high-pressure tactics a new way to invade consumer privacy. While many Americans understand how to deal with a pesky believer who calls their landline, their texts, emails, and social media are new, more personal territory.
“People are able to ignore phone calls, and that’s what collection agencies dislike,” said David Phillips, an Illinois attorney who has filed dozens of lawsuits against debt collection agencies. “It’s like a debt collector might show up at your house and knock on your door. That’s the effect of a text message.”
In addition to using email and text messaging, the office also suggested limiting the number of calls a collection company can make a caller to seven times per week. After reaching the consumer, the debt collection agent was banned from calling for a week. It would also update the information that companies are required to provide in written communications.
Consumers could still tell collection agencies not to contact them in any way under the law.
The debt collection industry said it appreciated the CFPB’s proposal but called the limit on the number of phone calls it can make “arbitrary”. The proposed rules would “unnecessarily hinder communication with consumers,” said Leah Dempsey, senior counsel of ACA International, a major industry lobby group.
Consumer groups that asked the CFPB to limit the industry to three calls a week were unhappy with the proposed rules.
The cap would apply to individual consumer debts, said Linda Jun, senior policy counsel at Americans for Financial Reform. Someone with more than one bill in collections could get inundated quickly, Jun said. “It could add up quickly,” she said.
If the debt collectors emailed or texted too often, it would be considered a nuisance and illegal, according to the CFPB. But unlike phone calls, the office doesn’t propose a specific upper limit on the number of contacts.
The proposal also asks debt collection agencies whether they expect to use social media to contact consumers, while prohibiting such contact if it could be seen by third parties. Some debt collection agencies have already found ways to use social media.
Brooklyn-based Diandra Rivera said she stopped posting on Facebook and closed her LinkedIn account after noticing debt collectors had started monitoring the sites. One combed her LinkedIn page to find a former boss and even family members whom the debt collector then contacted, she said.
Another was monitoring her Facebook page. During phone calls with the debt collection agency, the representative mentioned social outings she posted on Facebook, Rivera said. The agent asked why she was behind on her student loan payments when she could afford to go to Applebee, Rivera said.
“It was really scary,” she said.
The proposed rules are likely to spark a battle between debt collectors and consumer advocates. According to a report released in March, the CFPB received around 81,500 complaints from debt collection agencies in 2018, making the industry one of the most common sources of consumer complaints from the agency.
Consumers also seemed happy to receive text messages about their overdue bills, Gusman said. “Millennials just want to get online and pay their bills,” she said. “It would be crazy if within an hour of sending our messages we’d be getting 20, 30 payments online.”
The messages were expensive to send, Gusman said, and it was difficult to get all of the required information in a few characters.
One of the people Direct Recovery Services texted was Fultz, the Ohio medic, who said he found the messages intrusive.
The company has stopped the practice, but Gusman said she hoped the CFPB proposal will allow the company to try again.