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Federal fair debt collection rules, part 2: new technology

In the first part of this post, we explained how a relatively new federal agency has been tasked with the responsibility for identifying and implementing changes to a well-established debt-collection law.

The new agency is the Consumer Finance Protection Bureau (CFPB). And the well-established law is of course the Fair Debt Collection Practices Act (FDCPA).

In this part of the post, we will discuss some of the main areas of the FDCPA that are ripe for rule revision.

Many of these areas of likely change concern technology. The FDCPA dates from a time – the Carter administration – before the digital revolution reshaped the way millions of Americans communicate.

When the FDCPA was passed, e-mail was a selective vehicle for certain scientists. Now, by contrast, it has become a standard way of exchanging messages for many of us.

Text messages, too, were hardly on the horizon in 1977. Today, however, they have become an increasingly vital way of communicating not only for teenagers, but for many adults as well.

The same is true of online social media sites such as Facebook. They were unknown when the FDCPA first appeared. But now their use is widespread across large swaths of the American public.

One of the key questions facing the CFPB, then, will be what types of specific debt-collection rules should apply for these new media? To be sure, the basic protections of the FDCPA against unreasonable or abusive collection tactics do continue to apply in the digital age. It remains to seen, however, what particular rules to enforce those basic protections the new agency will propose.

Regardless of how these rules may change, bankruptcy remains a viable option for many people in need of debt relief. The automatic stay, in particular, is a powerful tool to stop creditors from further collection efforts until the bankruptcy petition is resolved.

Source: insideARM, "Anticipating a New Regulatory Regime For Debt Collection," P-R Stark, Feb. 24, 2014

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