Debt collectors can now contact you through text, email and even social media

Here's how to avoid collections scams and become debt-free

Credit card companies, medical providers and more can hire debt collectors to recover virtually any kind of debt. Now, these professionals can also collect debt payments by reaching out to you online. (iStock)

Debt collectors can now contact borrowers online via text, email and social media, according to a new rule issued under the Fair Debt Collection Practices Act (FDCPA) that took effect on Nov. 30, 2021. 

The FDCPA was originally created in 1977 to "eliminate abusive, deceptive, and unfair debt collection practices" and protect "reputable debt collectors from unfair competition." But the legislation hadn't been updated in four decades despite the rapid technological developments that occurred during that time.

Regulation F introduced new protocols for how debt collectors can behave online — it requires them to provide clear identification, keep online conversations private and give debtors the choice to opt out of online communications. 

The Consumer Financial Protection Bureau (CFPB), which approved Regulation F, said the new rules will "lead to stronger consumer rights." Former CFPB director Kathleen L. Kraninger wrote in a blog post that "We are finally leaving 1977 behind and developing a debt collection system that works for consumers and industry in the modern world."

However, not all advocates are in agreement that the new rule will benefit consumers. The National Consumer Law Center (NCLC) said that "Regulation F provides new consumer rights but also is likely to lead to new consumer abuses."

Keep reading to learn more about your rights under the FDCPA, as well as your options for how to get out of debt. You can visit Credible to compare offers on debt consolidation loans for free without impacting your credit score.


New debt collection rule may lead to rise in scams, advocates warn

While Regulation F sets protocols for legitimate debt collectors when communicating with debtors online, advocacy groups warn that it will make things easier for "phantom debt collectors" — criminals who scam unwitting consumers out of money they don't owe, according to the Federal Trade Commission (FTC).

The AARP said in a blog post that the new federal rule opens "new routes for fake-debt scammers to reach their targets." Because real debt collectors are now permitted to conduct their business online, phantom debt collectors may appear more legitimate when reaching out to consumers via text, email and social media.

Now more than ever, it's important for consumers to approach debt collectors strategically. Here are a few tips on avoiding debt collection scams from AARP:

  • Ask for the debt collector's name and company, as well as their professional license number. The FDCPA requires that debt collectors provide clear identification.
  • Request a written validation notice outlining the amount you owe and the original creditor's name — debt collectors are required to provide this by federal law.
  • Don't give out any personal information, discuss the debt you owe or make any payments to a debt collector without verifying their identity.
  • Check your credit history regularly. You can request a free copy of your credit report from all three credit bureaus (Equifax, Experian and TransUnion) to look for suspicious activity.

If you're struggling to repay your creditors, consider consolidating your debt into a lump-sum personal loan. This allows you to repay all your debts in a single monthly payment over a fixed period of time. You can see your estimated debt consolidation loan terms on Credible to decide if this option is right for you.


How to get out of debt faster

Debt collectors are permitted to contact you via phone call, email, text or even social media message about a debt you owe. If you're tired of being hounded by debt collections agencies, consider one of these debt repayment methods:

  • Nonprofit credit counseling. A credit counselor can help you with financial planning and set you up on a debt management plan (DMP) with a minimum monthly payment. They may also be able to help you negotiate with your creditors to lower the amount you owe with debt settlement.
  • Debt avalanche or debt snowball. The debt avalanche method is when you pay off your debt with the highest interest rate first to save the most money possible. The debt snowball method is when you pay off the smallest debt first to gain momentum.
  • Balance-transfer credit card. It may be possible to combine your credit card payments by moving the balance of one or more credit cards onto a balance-transfer card at a lower interest rate. You'll need good credit to qualify for a balance-transfer offer. Plus, you may have to pay a balance-transfer fee of 3-5% of the total amount. You can compare balance-transfer credit cards on Credible for free.
  • Debt consolidation loan. This type of personal loan allows you to pay off virtually any kind of debt, from unpaid medical bills to credit card balances, at a fixed interest rate. You repay the debt on a predictable repayment schedule in monthly payments over a set period of time.

If you decide to borrow a debt consolidation loan, it's important to compare offers across multiple lenders to ensure you're getting the lowest interest rate possible for your financial situation. You can compare offers risk-free and learn more about personal loans for debt relief on Credible.


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