August 14, 2022

Image credit: BBC

Creditors in the United States can now DM debtors on social media

According to new guidelines approved by a US body this week, debt collectors can now contact Americans via social media and text messages.

The Consumer Financial Protection Bureau’s rule allows creditors to slip into the accounts of millions of Americans who owe money. Critics fear that the messages will be lost online, resulting in intrusions into privacy and the spread of new schemes.

Advocates argue that the change is merely a modernization of rules established in the 1970s.

The amendment, adopted by the Consumer Financial Protection Bureau last year during the Trump administration, requires creditors to contact defaulters secretly, which means they can send direct messages but not post on your public-facing page.

Consumers have the option of opting out of these mailings, but creditors are not required to obtain permission to contact them. There are no limits to the number of messages one can send.

Lenders argued that the change was necessary since the Fair Debt Collection Practices Act, which governs the sector, was passed in 1977, long before social media and text messages were invented.

The rule also establishes a new phone call restriction. Each debt can receive up to seven calls per week, but those with numerous debts may receive up to a dozen calls per week. Debt collectors are also prohibited from calling any customer within one week of speaking with them about debt.

“This is a modest step forward in modernising contacts with consumers,” says Mark Neeb, CEO of debt collection trade organisation ACA International.

Critics argue that the choice opens up additional avenues for miscommunication, particularly because some people do not have continual access to the internet. Messages about past-due invoices, even if they are private, may be sent to the wrong person. According to CBS News, almost one-third of Americans with credit reports have a debt that has been sent to a collection agency, meaning the rule may affect tens of millions of people.