Debt collectors can now contact you via text, email and even social media
Debt collectors can now contact borrowers online via text, email and social media, according to a new rule issued under the Fair Debt Collection Practices Act (FDCPA) which came into effect on November 30, 2021.
The FDCPA was originally created in 1977 to âeliminate abusive, deceptive and unfair debt collection practicesâ and to protect âdeemed debt collectors from unfair competitionâ. But the legislation had not been updated for four decades despite the rapid technological developments that occurred during this period.
Regulation F introduced new protocols on how debt collectors can behave online – it requires them to provide clear identification, keep online conversations private, and give debtors the choice to opt out of communications. in line.
The Consumer Financial Protection Bureau (CFPB), which approved Regulation F, said the new rules “would lead to stronger consumer rights.” Former Director of CFPB, Kathleen L. Kraninger written in a blog post that “We are finally leaving 1977 behind and developing a debt collection system that works for consumers and industry in the modern world.”
However, not all advocates agree that the new rule will benefit consumers. The National Center for Consumer Law (NCLC) noted that “Regulation F offers new rights to consumers, but is also likely to lead to new abuses by consumers”.
Read on to learn more about your rights under the FDCPA, as well as your options for getting out of debt. You can visit Credible to compare free debt consolidation loan offers without affecting your credit score.
BORROWERS WHO CONSOLIDATE CREDIT CARD DEBT CAN SAVE OVER $ 2,000 ON AVERAGE, STUDY SHOWS
New debt collection rule could lead to more scams, lawyers warn
While Regulation F establishes protocols for legitimate debt collectors when communicating with debtors online, advocacy groups warn it will make it easier for “ghost debt collectors” – criminals who defraud consumers to unwittingly with money they don’t owe, according to the Federal Trade Commission (FTC).
AARP said in a blog post that the new federal rule opens “new avenues for false debt fraudsters to reach their targets.” Since real debt collectors are now allowed to conduct their business online, ghost debt collectors may appear more legitimate when contacting consumers via text, email, and social media.
Now more than ever, it is important for consumers to approach debt collectors strategically. Here are some tips for avoiding AARP debt collection scams:
- Ask for the name and company of the debt collector, as well as his professional license number. The FDCPA requires collection agents to provide clear identification.
- Ask for a written validation notice outlining the amount you owe and the name of the original creditor – debt collectors are required to provide this by federal law.
- Do not divulge any personal information, discuss the debt you owe or make payments to a collection agent without verifying their identity.
- Check your credit history regularly. You can request a free copy of your credit report from the three credit bureaus (Equifax, Experian, and TransUnion) to look for suspicious activity.
If you’re having trouble paying off your creditors, consider consolidating your debts into a lump sum personal loan. This allows you to pay off all of your debts in a single monthly payment over a specified period of time. You can review the estimated terms of your debt consolidation loan on Credible to decide if this option is right for you.
HOW TO BUILD AN EMERGENCY FUND?
How to get out of debt faster
Debt collectors are allowed to contact you by phone, email, text, or even social media message about a debt you owe. If you’re tired of being hassled by debt collection agencies, consider one of these debt repayment methods:
- Non-profit credit counseling. A credit counselor can help you with financial planning and set you up with a Debt Management Plan (DMP) with a minimum monthly payment. They can also help you negotiate with your creditors to reduce the amount you owe with the debt settlement.
- Debt avalanche or debt snowball. The Debt Avalanche method involves paying off your debt with the highest interest rate first to save as much money as possible. The debt snowball method is to pay off the smallest debt first to get bigger.
- Balance Transfer Credit Card. It may be possible to combine your credit card payments by transferring the balance of one or more credit cards to a balance transfer card at a lower interest rate. You will need good credit to qualify for a balance transfer offer. Additionally, you may need to pay a balance transfer fee of 3-5% of the total amount. You can compare credit cards with balance transfer for free on Credible.
- Debt Consolidation Loan. This type of personal loan allows you to pay off virtually any type of debt, from unpaid medical bills to credit card balances, at a fixed interest rate. You pay off debt on a predictable repayment schedule in monthly installments over a set period of time.
If you decide to borrow a debt consolidation loan, it is important to compare the offers of several lenders to ensure that you are getting the lowest possible interest rate for your financial situation. You can compare risk free offers and find out more about personal loans for debt relief on Credible.
CAN AN INCOME-BASED PAYMENT PLAN HELP GET MY STUDENT LOANS?
Have a finance-related question, but you don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.