NEW RULES FOR DEBT COLLECTORS
As of Nov. 30, there are new rules for debt collectors as established by the Consumer Financial Protection Bureau (CFPB). It’s important that you understand the new regulations if you are contacted by a debt collector, so you know your rights.
The new rules clarify how debt collectors can communicate with you, what information they are required to provide, your rights in collection, and how you can execute those rights.
Under the new rules, debt collectors can now contact you by email, text messages and social media, in addition to the previous methods of phone calls and postal mail. Debt collectors must identify themselves. Any messages they send must be private.
In other words, they cannot report your debt on Facebook or Twitter. They can, however, attempt to “friend” you on social media as long as they identify themselves as debt collectors. They must also let you know that you have the option to indicate that you don’t want to communicate in this way.
When debt collectors don’t follow applicable regulations, they are subject to enforcement by the Federal Trade Commission, and they also may be subject to state law violations. You may be able to sue debt collectors if they violate regulations as long as you initiate action within specified time limits.
Under the new regulations, debt collectors cannot attempt to contact you more than seven times within a sevenday period regarding a specific debt. That applies if you don’t respond to their inquiry. After you do respond, they are not allowed to call you again for seven days. Unfortunately, these restrictions don’t apply to text messages, email and other media.
If you are contacted, you should request the name, phone number and physical address of the agency they are working for. You should not provide any personal information until after you verify that the agency is legitimate and that the debt information is accurate.
If the debt is recent, don’t hesitate to call the original lender to verify that the account should be in collection. If you don’t recognize the debt, you should request additional information in writing to verify its accuracy.
Once you determine that the debt is accurate, you have options to negotiate. If the debt has been sent to a collection agency, it is very likely that the debt has been sold at a significant discount.
So, if you are in a position to repay the debt, don’t hesitate to negotiate for a significant discount. If you are in a position to pay off the debt in a short time frame, such as 30 or 60 days, you should be able to make arrangements for a significant discount.
You should only make a payment after you receive a written agreement from the debt collector indicating the terms of your agreement.
For about 20 years, I was a certified mediator in Florida, and I have participated in hundreds of negotiations with debt collection cases in small claims court. Don’t hesitate to ask for a significant discount, such as 50%, if you are in a position to repay the debt in a short time frame. Even if you agree to pay off the debt in monthly payments over a short period, such as within 12 months, you should be able to negotiate a discount. Most debt collectors will be anxious to settle if you indicate you are in a position to settle the debt quickly.
If you want to review the new regulations, go to: www.consumerfinance.gov/ consumer-tools/debt-collection/.