New debt collection rule is a mixed bag for consumer rights

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Bad news: New debt collection rule permits unlimited electronic access to consumers.

Good news: It may eliminate "debt parking" by forcing debt collectors to reach consumers before posting debts on their credit reports.

Due to the COVID crisis and a massive loss of jobs nationwide, especially among lower-income and minority populations, many people have landed in dire financial straits, with overdue rent and bills in arrears. The environment is ripe for debt collectors. At this critical point, the federal government has passed a new rule, effective at the end of 2021, that will subject those who owe money to a potential flood of texts and emails from debt collectors.

The Consumer Financial Protection Bureau’s recently released rule will allow debt collectors to email, text and even contact consumers by social media direct message (DM) beginning in November 2021. Alarmingly, the CFPB placed no cap on the number of times a collector can attempt to reach consumers using these means.

“The last thing consumers who are having trouble paying their bills need is to be besieged by debt collectors with a green light to hound them by text, email and social media,” said Consumer Action’s director of national priorities, Linda Sherry. “We hope that a reinvigorated CFPB—with consumer-focused leadership—will revisit some of the excesses extended to industry.”

Consumer Action dissects the new two-part rule in its latest issue of Consumer Action News. See “Key changes.”

Consumer Action had urged the Bureau to require collectors to get individuals’ consent before sending them texts and emails about debts they presumably owe. In a decision that places more of a burden on consumers than collectors, CFPB Director Kathy Kraninger created a rule that lets collectors send electronic messages to consumers without their permission. Instead, consumers were given the option to opt out of being contacted by text, email or social media after receiving these messages from debt collectors.

The rule limits phone calls to seven attempts, or one actual conversation, per week per debt, which could amount to a lot of calls for people in dire financial straits, who may default on many bills.

The rule also covers how consumers must be notified of assumed debts via the validation notice. The mandatory notice must clearly state how much is owed and how consumers can dispute the debts.

The ruling reiterates that collectors can’t sue (or threaten to sue) over “time-barred” debt, on which the statute of limitations has expired. It also forbids collectors from “parking” debts on consumers’ credit reports before they have contacted consumers about the debt. Collectors must not notify credit bureaus about a debt in collections for at least 14 days after sending notification to the consumer, to see if the mandatory notice was undeliverable.

These rules update implementation of the Fair Debt Collection Practices Act (FDCPA). In this issue of its newsletter, Consumer Action provides information about how to demand information about a debt in collections, how to stop a debt collector from contacting you, and how to avoid reviving “zombie” debts. See "Tips and tools."



Consumer Action has been a champion of underrepresented consumers nationwide since 1971. A nonprofit 501(c)(3) organization, Consumer Action focuses on consumer education that empowers low- and moderate-income and limited-English-speaking consumers to financially prosper. It also advocates for consumers in the media and before lawmakers and regulators to advance consumer rights and promote industry-wide change. By providing consumer education materials in multiple languages, a free national hotline, a comprehensive website ( and annual surveys of financial and consumer services, Consumer Action helps consumers assert their rights in the marketplace and make financially savvy choices. More than 6,000 community and grassroots organizations benefit annually from its extensive outreach programs, training materials and support.




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