Christopher Fultz looked at his phone during a break from his paramedic job and saw some unusual text displaying his name in all caps.
Click the link, the message said, which was from a number he didn’t recognize.
Fultz, 36, initially ignored the text, but eventually followed the link to a website asking for his social security number. Fultz said he then realized that a debt collector who repeatedly called and left what Fultz considered to be threatening voicemails had found a new direction in his life.
“I was appalled. They can’t text if it’s a debt collector,” Fultz, from Ohio, said. “It was just shocking that they did that. It felt like a scam.” Fultz sued and the debt collection company paid him $3,500 as part of a settlement.
For decades debt collectors have relied on a limited set of communication tools: landlines and US mail. Now they are finding increasingly personal ways to reach the millions of Americans who regulators say have been contacted by debt collectors. Some debt collectors worry that these contacts fall into a legal gray area because the Fair Debt Collection Practices Act was written over 40 years ago and does not directly address digital communications.
The Consumer Financial Protection Bureau on Tuesday proposed rules that would give the industry the green light to send consumers unlimited amounts of texts and emails, accelerating a trend the watchdog says could be beneficial to everybody.
The proposal is a win for debt collectors such as San Francisco-based TrueAccord. Instead of making a deluge of phone calls, TrueAccord sends millions of emails and text messages each month. Next, he hopes to contact delinquent consumers through chat apps such as WhatsApp.
“When you have a good digital presence online, you don’t need to make those calls,” said Ohad Samet, the company’s co-founder and CEO. “The only question here is why not everyone has moved on to the first digital models yet.”
But this digital-first approach has alarmed consumer advocates who fear the CFPB is giving an industry known for its high-pressure tactics a new way to violate consumer privacy. While many Americans know how to handle a pesky creditor calling their landline, their texts, emails and social media are new, more personal territory.
“People are good at ignoring phone calls, and that’s what debt collectors don’t like,” said David Phillips, an Illinois attorney who has filed dozens of lawsuits against debt collectors. recovery. “It’s as if a debt collector could show up at your house and knock on the door. It’s the effect of a text message.”
In addition to addressing the use of email and text communications, the bureau also proposed limiting the number of times a debt collector can call someone to seven times per week. After reaching the consumer, the debt collector would not be allowed to call back for a week. It would also update the information companies must provide in written communications.
Consumers could always tell debt collectors to stop contacting them in any way, under the law.
The debt collection industry said it liked the CFPB’s proposal, but called the cap on the number of phone calls it can make “arbitrary”. The proposed rules would “unnecessarily impede communications with consumers,” said Leah Dempsey, senior counsel for ACA International, a major industry lobby group.
Consumer groups who had asked the CFPB to limit the industry to three calls per week were unhappy with the proposed rules.
The cap would apply to individual debts owed by the consumer, said Linda Jun, senior policy adviser at Americans for Financial Reform. Someone with more than one collection bill could quickly be inundated, Jun said. “It could add up quickly,” she said.
If debt collectors emailed or texted too often, it would be considered harassment and would be illegal, according to the CFPB. But unlike phone calls, the office does not offer a specific cap on the number of contacts.
The proposal also asks debt collectors whether they plan to use social media to contact consumers while prohibiting such contact if it can be seen by a third party. Some debt collectors have already found ways to use social media.
Brooklyn’s Diandra Rivera said she stopped posting on Facebook and closed her LinkedIn account after realizing debt collectors had started monitoring the sites. One scoured her LinkedIn page to find a former boss and even family members, whom the debt collector then contacted, she said.
Another was monitoring her Facebook page. In phone calls with the debt collection agency, the representative mentioned social outings she had posted on Facebook, Rivera said. The agent asked why she was behind on paying off her student loan if she could afford to go to Applebee’s, Rivera said.
“It was really scary,” she said.
The proposed rules are likely to create a battle between debt collectors and consumer advocates. The CFPB received about 81,500 complaints about debt collectors in 2018, according to a March report, making the industry one of the agency’s most common sources of consumer complaints.
Giving debt collectors such leeway to expand digital communication is unwarranted, said Christine Hines, legislative director of the National Association of Consumer Advocates.
“With the extreme examples of debt collector harassment and invasion of consumer privacy we’ve seen, it’s always a bad idea to absolve debt collectors of liability or give them a sphere of safety, in all circumstances,” she said. “It feels like an invitation to encourage more abuse, not deter it.”
But some industry officials say the shift to the digital space could be transformative. Collection agents are already combing through social media to track consumers’ digital footprints and create patterns to determine whether they would be more likely to respond to male or female voices.
TrueAccord, launched in 2014, tried to put a friendly face on the debt collection industry and rarely calls consumers, said Samet, the co-founder. The company “analyzes a lot of data” to build a profile of consumers, based on the type of products they’ve purchased and their previous responses to contact attempts, he said. Ninety percent of the company’s communication with consumers does not involve human-to-human interaction, he said.
“There’s machine learning at play here,” he said.
Samet said he believes consumers appreciate TrueAccord’s approach. Text messages and emails are a “channel you interact with more frequently, but if you don’t like my email, all it takes is a swipe to send me away. You can set up filters. There are a lot of things you can do to manage your communications,” he said.
The CFPB has received more than 50 complaints about TrueAccord since 2015, according to the bureau’s database, which does not identify the complainants.
“This lady keeps emailing me. She even went so far as to tell me that she knows I open the emails. She is harassing me at this point,” according to a filed complaint. with the CFPB earlier this year. “That’s not right. Please help me.”
In 2017, a consumer told the CFPB that TrueAccord had been too aggressive. “This email was written in an attempt (to) convince me that they will both physically threaten me and attempt to ruin my reputation. They stated that they would use any means available to recover the money that they say is due,” according to the complaint.
Samet said the complaints are typical of the type received by other service companies such as Comcast and a “fraction” of what competitors receive. “We never want people to complain,” he said.
Digital communications from creditors can sometimes be helpful to consumers. Emails and text messages create a fingerprint that can be used to track down debt collectors hiding behind post office boxes and shell companies, said Ohio attorney Jonathan Hilton, who practices law enforcement. the consumption. In some cases, Hilton said it subpoenaed Google or cellphone companies to find debt collectors’ names, addresses and even bank account information. “It’s very helpful on the investigative side,” he said.
Vicki Chester, a retired practical nurse, said she was inundated with phone calls from a debt collector about an old debt of $350 for months before giving in and making two payments of $60. “The calls were unpleasant,” said Chester, a Hilton guest. “I was tossing and turning every night wondering if I’m going to be picked up.”
Finally, she asked the debt collector to send her an email with details of the debt. That’s when Chester said she realized she was being stalked for money she didn’t owe. “I realized it wasn’t my debt,” said Chester, who received a $6,000 settlement from the debt collection agency. “They got the wrong Vicki.”
The Fair Debt Collection Practices Act of 1977 was written before cell phones became the constant companion of millions of Americans. The law prohibits debt collectors from calling before 8 a.m. or after 9 p.m. and prohibits harassment. But it didn’t directly address most forms of digital communication.
The CFPB proposal would change that, which would be a relief for Elle Gusman.
Minnesota-based Direct Recovery Services experimented with text and email, said Gusman, who founded the company in 2012. The emails were initially effective, but then started being flagged as spam by Google. , especially when sent in large batches, she said. The company even created a new domain name, but words included in emails or their attachments — such as debt, password, account, online payment — would be flagged, she said.
“It won’t pass,” Gusman said.
Consumers also seemed to enjoy receiving text messages about their overdue bills, Gusman said. “Millennials just want to go online and pay” their bills, she said. “It would be crazy, within an hour of sending our messages, we were getting 20, 30 online payments.”
Sending the messages was expensive, Gusman said, and it was difficult to include all the required disclosures in a few characters.
Fultz, the Ohio paramedic, said he found the messages intrusive.
The company has ended that practice, but Gusman said she hopes the CFPB’s proposal will allow the company to try again.