Thanks to new financial regulations passed November 30th, debt collectors can now slide into your DMs, shoot you a text message, or email you to collect an unpaid bill. Creditors can report you if you fail to pay up after receiving a notice on social media, even if you think it’s spam.
We first heard about this rule change in November of 2020, when creditors argued that it would “level the playing field” in a world where people mainly communicate through text messages and the internet. It’s arguably the biggest update to the Fair Debt Collection Practices Act since it was signed in 1977, and it will sharpen debt collectors’ ability to affect credit scores and take consumers to court.
Why Do Debt Collectors Want to DM You?
Debt collectors reach out to consumers for two key reasons. The first is to collect their debt, and the second is to prove that they’ve spoken to you. Under past and current law, debt collectors cannot report you to credit reporting agencies without proof of communication. Additionally, creditors need to prove that they really tried to contact you if they want to win a court case.
But phone calls and snail mail are outdated. They’re useless if you’ve changed your number or address, and of course, it’s easy for people to “miss” these notices. Texts, emails, and direct messages over social media are faster and more reliable. Not to mention, read receipts and email tracking techniques could prove that a consumer opened a message and chose to ignore it.
What Are Your Protections?
There are some protections for these new rules, thankfully. But some consumers may feel that they’re lacking—we’ll get to that part in a second.
According to the CFPB, creditors cannot share your debts publicly, and they must share that they’re a debt collector when sending you a message or friend request. If your account is set to private and they need to be your friend to DM you, for example, then their profile should indicate that they’re a debt collector.
Additionally, debt collectors must provide a simple opt-out system for their communications. This rule may exist to prevent harassment, as the CFPB doesn’t restrict the number of social media messages that creditors can send you each day. (The new law limits debt collectors to seven phone calls a week, though.)
But What If You Think It’s Spam?
We’ve all received spam messages asking to collect an unpaid bill. It’s a common scam, and at this point, we tend to ignore any unpaid bill that doesn’t come through snail mail or a genuine banking app. Not to mention, most people have no idea that the Fair Debt Collection Practices Act now allows debt collectors to send DMs and texts to debtors.
Some people who receive these debt collection notices already know that they have unpaid bills. These people will hopefully understand that they’re in contact with a genuine debt collector, even if they haven’t heard of these new debt collection rules.
But not everyone knows that they’re in debt, and in some cases, people owe money to several creditors and aren’t entirely sure who they need to pay. Unless these people have heard of the new debt collection rules, they may believe that they’re receiving spam. And that’s a big problem, because reading or responding to such messages could “verify” that you’ve communicated with a creditor, leading to a drop in your credit score or a court summons.
There are a ton of issues with these new rules that we won’t understand for a long time. For example—what happens if a debt collector tries to reach me and sends a message to the wrong Andrew Heinzman? Will that stand as a violation of the law (creditors can’t share your debts publicly), or will it count as a genuine attempt to collect an unpaid bill?
We hope that the CFPB will take the time to clarify these new rules, and that large media outlets will (at the very least) tell people that their next “spam” message might be a real loan shark.