Modernizing Debt Collection During the Digital Age

Debt collection has been around for centuries, with many changes constantly taking place. However, from a digital perspective, the debt collection industry has been slow to evolve.

During the COVID-19 pandemic, rules and regulations around debt collection came under the microscope, which led to an update allowing a more modern way of communicating within the industry. The basic rules of debt collection still stand:

Hours of contact are between 8 a.m. and 9 p.m., local time
If consumers ask them not to do so, debtors cannot be contacted at work
Debt collectors are not allowed to threaten or harass
Debt collectors cannot tell any third parties about someone’s debt
If collectors are told in writing to stop, they cannot contact the consumer

These rules are set in stone and are not changing. What has changed is the way debt collectors can communicate while following all these rules.

E-Communication

Traditionally, debt collectors followed a basic system of making phone calls and sending letters. As communications have modernized over the years, new avenues have opened up to make contact with consumers. While phone calls are still a top choice, debt collection emails and text messages are now an option as well. Debt collectors are also now allowed to contact debtors via social media messaging platforms.

It turns out that many consumers prefer to manage their accounts online through emails, text messages, and social media. Until recently, debt collectors did not use these platforms. Because their use was unclear, many consumers complained about harassment through these communication channels. Without having any set rules in place, it can be difficult to tell who was in the right or the wrong. A recent update to the Fair Debt Collection Practices Act has cleared up some confusion with a few simple changes.

Phone Calls

The new rules allow for one phone call a day every seven days. Once debt collectors speak to a person, they cannot call again for another seven days. Additionally, consumers can ask debt collectors to stop calling, and they must comply. The calling cap applies to each debt, so those with more debts can expect more phone calls.

Voice Messages

Debt collectors are now allowed to leave limited content messages if the phone is not answered. Before third-party disclosure laws, voicemails were a minefield. But with the limited content message guidelines, voice messages are now allowed as long as the following rules are observed:

The consumer’s name is not mentioned
A business name is given that does not say the caller is a debt collector
A request to return the call
Contact names of who to speak to
A phone number to return the call

Emails and Text Messages

Emails and text messages are allowed, but must only be sent between 8 a.m. and 9 p.m. as per the rules of the Act. Emails sent to a work address are generally not allowed.

Consumers must have the option to verify their continued consent for this form of communication. All electronic communications must include clear instructions to opt-out should the consumer wish to do so. If the consumer chooses to opt-out of a particular channel of communication, they must honor this.

Social Media

Private messages on social media are now allowed as part of the modernizing of debt collection during the digital age. Posting messages to social media pages, or anything that their followers, friends, or the public can see, is not allowed.

Consumer Rights

As a consumer, it’s important to know that all messages from debt collectors will contain opt-out instructions. While these must be acted on immediately by the collectors, opting out of all communication with a debt collector could cause you to run into other kinds of snags.

If you opt-out of messages, you risk not being kept up to date if your debt status changes. (For example, if a company chooses to sue you for unpaid debt). Be mindful of opting out too often, or you may end up missing important information.

If you feel that you are being harassed by a business or third-party debt collector, you can report to the Consumer Financial Protection Bureau (CFPB), and they will address any issues of wrongdoing on the part of the collectors.