Debt collection agencies will soon have more access to consumers, thanks to a new rule passed by the Consumer Financial Protection Bureau (CFPB).
Coming at a time of historic unemployment and millions of Americans facing financial difficulty, the rule could have a drastic impact on consumers. Although this rule does not take effect until October of 2021, you may want to be familiar with the practice and understand how to protect yourself. Here are some key take-aways regarding the rule:
- Use of electronic communication – As of now, collection agencies may call you on the phone or send you a letter in the mail. In the future, they may use email, text messaging and social media platforms.
- More frequent contact – The new rule also allows collection agencies to contact you more frequently. They will be allowed to call up to seven times per week or more. The text, email and social media posts are unlimited.
- Opting out of electronic contact – The CFPB claims that the rules will allow consumers to opt out of electronic communication but has not stated how they can do that.
- No check on claim accuracy – The rule does not require the collection agency to confirm that the debt still exists or was even legally valid before contacting consumers, continuing a long-standing problem with collections.
What can you do if a collection agency contacts you?
There are certain things you should remember if a debt collector reaches out to you, including:
- Never give out personal information unless you already know that the agency or creditor is legitimate and you are setting up a payment plan. Plenty of scammers masquerade as debt collectors.
- Request a copy of your credit report from your bank or another trusted source so you are familiar with your debts. You can also review the document to make sure that no one has stolen your identity.
- Don’t pay off old debt right away. The statute of limitations for debt collection in Tennessee is six years. A creditor cannot sue for anything older than that, as long as you haven’t made a payment in that time.
- Verify the debt they claim you owe. Make sure the collection agency actually has the right to request the debt before you take any action, especially if you don’t recognize the debt. You can ask for a detailed statement.
These tips apply if a debt collector contacts you before or after the new rule goes into effect. If you know you have outstanding debt and you are one of the many Americans struggling to pay your debt, consider talking to a debt counselor with a reputable non-profit agency. You may also benefit from filing for bankruptcy, which immediately bars creditors from harassing you.