CONSUMERS ARE VULNERABLE TO SCAMS UNDER NEW DEBT COLLECTION RULES

It may be true when they say “no good deed goes unpunished” as newly adopted regulations meant to protect consumers may have the opposite result if you aren’t cautious! Recent Consumer Financial Protection Bureau rules on debt collection practices could make consumers more vulnerable to online scams. What’s new and how can you protect yourself? Here is what you need to know.

In general, the new rules clarify how debt collectors can communicate with you, including what information they must provide you at the outset of collection about your debt, your rights in debt collection, and how you can exercise those rights. If that sounds a bit confusing, you may be right. During this transition period to the new rules, fraudsters are looking for victims who don’t know any better.

These are the two things that have changed the way a debt collector can communicate with you:

1. Unsolicited emails, texts, and social media messages can now be sent by debt collectors. You can opt-out of any or all of these communications channels.
2. Debt collectors can now add you on social media. However, they must identify themselves as a debt collector and disclose their intent if the purpose of friending you is to use the platform and direct connection to send you direct messages in pursuit of debt.

Previously, debt collectors were not prohibited from contacting consumers via text message or social media, but the revised rules are intended to provide “clear rules of the road” now and in the future, the CFPB said.

The estimated 70 million Americans who have debts in collections may find it difficult to deal with debt collectors. Those staggering numbers translate to nearly one third of adults with a credit report being pursued during the pandemic, according to the Urban Institute.

Even those with no credit concerns need to be cautious. Fraudsters are already using unsolicited e-mails to commit fraud under the guise of debt collection. The ability for debt collectors to use email, text, and social media to contact consumers gives criminals a new way to scam people into paying money for alleged debts.

Here’s what you can do to protect yourself.

First, know your rights. The Fair Debt Collection Practices Act is very specific about what debt collectors can and cannot do.

Find out who you’re dealing with. Request the collector’s name, the company’s name, address, and phone number. Legitimate collectors will give you this information.

Become extra vigilant about who you let access your social networks.

Do not to click on any hyperlinks or download any attachments from DMs, texts or emails claiming to come from debt collectors on social media. When it comes to avoiding scams and identity theft, all of those rules still apply, even if it’s a debt collector. You should first determine if the company that sent you the notice is a legitimate debt collector by researching its name.

If you are getting scam emails about a debt you don’t owe, report it. The CFPB and your state attorney general can be contacted about illegal debt collection practices. Contacting state authorities can be a good idea since many states have their own debt collection laws. Be sure to document any violations of the law by the debt collector. Even though it won’t erase legitimate debts, it can help prevent further misconduct and even give you grounds for suing the collector.

Additionally, you may want to contact a major credit reporting agency. Let them know you’ve been contacted by fake debt collectors. Request a fraud alert to be placed on your credit report. Alternatively, you can use a third-party identity theft and credit monitoring service to monitor your credit 24/7. It is much less costly, both in terms of time and money, than falling victim to a scammer.

Is your personal information on the dark web? Make sure your identity isn’t at risk!