With the end or exhaustion of pandemic relief, the total debt is increasing for Americans.
Credit card balances jumped $ 17 billion to $ 800 billion in the third quarter of this year, according to a report from the Center for Microeconomic Data at the Federal Reserve Bank of New York. Rising credit card debt is reversing the pandemic trend that has seen consumers spend less and pay off their balances.
Financial anxiety is especially pronounced for Gen Z, ages 13 to 24. A new survey found that 37% of those young adults said their own finances or those of their families were a major source of stress, according to a recent Associated Press poll. NORC Center for Research in Public Affairs.
Next year could see more people in debt and sued by debt collection companies who now have new ways of finding debtors. Here’s what you need to know about your rights.
Is it true that a debt collector can contact me through my social media account?
Yes, that request to connect to Facebook, Twitter or Instagram could very well come from a collection company.
New rules passed by the Consumer Financial Protection Bureau, or CFPB, which came into effect on November 30, outline how and when debt collectors can contact you about a debt you may owe.
An update to the Fair Debt Collection Practices Act allows debt collectors to locate people on their social media accounts, in addition to using email and text messages.
If you are contacted on any of the social media platforms, the debt collector should send you a private message and make it clear that they are trying to collect a debt.
Messages should be sent at a “reasonable time” similar to limiting phone calls from 8 am to 9 pm, said Linda Sherry, director of national priorities for consumer action.
Can the debt collector post something about my debts online?
The rule change is supposed to protect your privacy. The Debt Collector cannot post anything that can be seen by the general public, your contacts, friends or followers. For example, the debt collector couldn’t comment on your profile page that you have debt.
What proof does a debt collector need to provide me that I owe the debt?
When a debt collector initially contacts you, or shortly thereafter, the company is usually required to provide certain information about the debt, according to the CFPB.
This “Debt Collection Validation Notice” should include enough information to help you determine if you owe the debt. The following information is included in what they should send you, according to the CFPB:
• The name of the debt collector and the postal address.
• Information on the creditor and any account number associated with the debt. You may not realize that you owe money because the notice did not come from the original creditor. You should get enough details to help you recognize or verify that the debt is correct. The notice should include a form that you can return to dispute the debt or take other action.
• A detail of the current amount of debt, including interest, charges, and payments you have made.
If I don’t want to be contacted, is there a way to stop receiving messages?
Under the new rules, the debt collector must give you a “simple way” to opt out of receiving future communications through your social media account, according to the CFPB.
You have the right to tell debt collectors not to contact you by e-mail, SMS or any other means of communication, specifies the CFPB.
It does not mean that the debt is gone. The debt collector may still be able to take legal action.
The CFPB has a model letter that you can use to request that communication be stopped. Go to consumerfinance.gov and search “What should I do when a debt collector contacts me?” “
A debt collector, with a few exceptions, cannot send an email to an email address that the company knows to be an employer-provided email address, a CFPB spokesperson said.
How can you be sure that a message is not from a scammer?
Here’s where things get tricky and how a scammer can trick you into sending them money or giving out personal information.
“Being able to reach people through social media accounts is of great concern to us,” said Sherry. “A lot of spammers and scammers use text messages, so people need to be very careful. “
Sherry recommends that you do not click any links in an email, text message, or reply to a direct message until you have independently verified that the debt collector is legitimate.
How often can the debt collector call me?
Under the debt collection rule, a debt collector who contacts you by phone cannot call more than seven times in a seven day period through debt, or within seven days after speaking to you on the phone. If you don’t ask a business to stop communicating with you, the rule doesn’t limit the number of emails, texts, or social media contacts that can be made, Sherry points out.
How quickly can a debt collector send information about a debt to the credit bureaus?
To try to end an unscrupulous and illegal practice of “parking” debts on people’s credit reports to trick them into making payments, debt collectors must disclose debt details before reporting any information. to a credit bureau, Sherry said.
The rule prohibits the practice of reporting a debt to a consumer news agency without first notifying the consumer of the existence of the debt, the CFPB said. Often, people don’t realize that a false or questionable collection action is on their credit report until they apply for a loan.
The new rule also prohibits debt collectors from suing (and threatening to sue) to collect a prescribed debt, the CFPB said.
Even though the debt is yours and the company can prove it, that doesn’t give them the right to harass you. So if you have any problem with debt collection, file a complaint online with CFPB or call 855-411-2372.