Debt collectors receive extra tools from government

Debt collectors receive extra tools from government

by admin

The new regulations introduced by the Consumer Financial Protection Bureau came into force earlier this week. The change could impact tens of millions of Americans, as some estimates suggest that a third of adults with a credit report have a debt in collection.

The CFPB insists it is illegal for debt collectors to harass or threaten citizens when trying to collect on a debt. It has outlined some strict rules for the collection agencies to follow.

They must keep the messages private and not viewable by the general public or friends and followers. They must identify themselves as debt collectors, and not pretend to be a long-lost friend when attempting to send a private message or requesting to add as a friend or contact. They must also provide a way for the debtor to opt out of their communications.

The authority says the measures aim to modernize the outdated debt collector practice regulations that were introduced in 1977, long before the Internet and social media era.

According to the credit rating agency Experian, average US consumer debt has reached a new record in 2020, growing to nearly $14.9 trillion. This as the US economy plunged into a recession caused by the Covid-19 pandemic, which caused unemployment to soar and contributed to overall economic anxiety.

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