How to Improve Debt Collection Rule

Consumer advocates at the National Consumer Law Center have recommendations for how the Consumer Financial Protection Bureau (CFPB) can improve a recently-released new rule on debt collection.

Among the recommended improvements are:

Collectors can harass consumers by making up to seven attempted calls per week per debt, either to the consumer or to friends and family to ask for the consumer’s contact information. A consumer with 5 medical accounts in collection could receive 35 attempted calls per week.

▪ Recommendation: Limit collectors to three attempts per week per consumer. Make the limit of one conversation per week apply per consumer rather than per debt.

Collectors can use electronic communications to contact consumers unless the consumer opts out. Requiring an opt-out rather than requiring collectors to obtain consumer consent is more likely to result in missed messages, i.e., if collectors use old contact information or communications are sent to spam. Privacy may also be violated if messages are viewed by others, including employers. Procedures to reduce third-party disclosures are optional.

▪ Recommendation: Require collectors to obtain consumer consent to use the specific type of electronic communication (e.g. text, email, direct messages).

Collectors can still pressure consumers to pay debts that are beyond the statute of limitations. They are prohibited from suing or threatening to sue on time-barred consumer debts, but they can still sue if a consumer inadvertently revives the statute of limitations through a partial payment or acknowledgment made after pressure from collectors.

▪ Recommendation: Prohibit collectors from collecting time-barred debt in and out of court because these debts are so old that they cannot be collected without mistakes or deception. At a minimum, add prohibitions on lawsuits on revived debt and sale of time-barred debts.

For more on consumer protection issues, follow Andy Spears

Writer and policy advocate living in Nashville, TN

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