New debt collection rule substitutes email, text and social media messages for paper notices
by Jim Haigh – December 8th, 2020
The Consumer Financial Protection Bureau (CFPB) gave an early Christmas present to debt collectors, at the expense of the very consumers they are mandated to protect. Ignoring a mountain of public comments from citizens, cyber security experts and consumer advocacy groups including Keep Me Posted (KMP) detailing the multitude of harms and risks unleashed by its proposed rules, the Bureau plowed ahead and finalized a sweeping deregulation that will subject society to an unwelcome digital deluge of menace and fraud.
Under the guise of so-called modernization, the CFPB will give the green light to 3rd-party debt collectors to exploit Facebook, Instagram, LinkedIn and Twitter messaging — as well as emails and text messaging — in their bounty hunting efforts. The new rules would further allow for an unlimited quantity of such unsolicited digital contacting — while simultaneously expanding the frequency of phone calls to 7 times per week per alleged debt. Meanwhile, the safe, secure and discreet practice of mailing paper letters will remain an option for professional firms seeking reliable communications options.
To be clear, America’s consumers did not ask for this. And they will not even be given the option to opt-in to any such digital communications they might prefer. Instead, there will be future guidance on procedures they would need to take to opt out of the sudden barrage of messaging across their digital channels and devices. As for the once unthinkable practice of turning social media accounts into vehicles for debt collection, it appears that even the leading platforms were caught by surprise and are now pressed to evaluate how they might adapt in response. Many do not currently require a formal connection between sender and recipient for direct messaging to occur, however the CFPB’s new rule appears to even allow debt collectors to “friend” consumers and join their social networks as well.
KMP is concerned that the federal agency tasked with protecting consumers also ignored dire warnings that extend far beyond the harsh nuisance of digital harassment. Concerns raised in our public comments, and echoed by consumer advocates, detail the fundamental loss of rights that could now occur — as well as a Pandora’s box opened to a multitude of cyber harms not just for those in debt collection, but society as a whole.
Because the new rules would allow initial debt validation notice to be sent via any of these digital streams, and without even requiring that debt collectors verify the alleged debt is actually owed by a consumer prior to contacting, consumers will now be subjected to difficult choices and compounded risks. Do you ignore the unsolicited email, text or direct social message from a stranger as the Federal Trade Commission would advise as safe digital hygiene? You might miss notice and lose rights to dispute a debt. Or do you open the digital alert on your phone, home or office computer — only to find it was fraudulent and devices are now infected with who knows what?
As finalized, the new CFPB rule dilutes the practical purpose of notice and elevates cybersecurity risks by orders of magnitude. Ignoring the variety of reasons consumers had not previously chosen themselves to voluntarily opt-in to electronic notifications, the Bureau will now treat all consumers as having given “implied consent” to communication preferences forced upon them. In its own analysis, the consumer protection agency even acknowledges that with unsolicited and nonconsensual texts and emails and social messages suddenly unleashed upon consumers, important notice from legitimate parties will be ignored as spam. Worse, however, is the preventable fact that no protections are in place to guard against cyber criminals who will use this new rule and category of consumer notification as a new pretext in phishing, ransom and malware, and countless other digital exploits where the burden and harms fall on the consumer.
With the current pandemic and its negative economic impact, more and more consumers will join the ranks of the 1 in 4 adult Americans who already have a bill in collection. This will only exacerbate the collection of compounding harms, risks and threats posed by the CFPB’s new digital debt collection rules. The only bright spot heading into the New Year is that they are not scheduled to implemented for several months — and between now and then we will have a new Administration and a new Congress. So there is at least time, and hope, for citizens and consumer advocates to get the CFPB to reverse course and put consumers first.