Christopher Fultz peered at his phone during a break at his job as a paramedic and saw an unusual text displaying his name in all caps.
Click on the link, said the message, which was from a number he didn’t recognize.
Fultz, 36, initially ignored the text but eventually followed the link leading to a website asking for his Social Security number. Fultz said he then realized a debt collector who repeatedly called and left what Fultz considered threatening voicemails had found a new way into his life.
“I was appalled. They can’t send text messages if it’s a debt collector,” said Fultz, of Ohio. “It was just shocking that they would do that. It felt like a scam.” Fultz filed suit, 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 the U.S. mail. Now they are finding increasingly personal ways to reach the millions of Americans 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 more than 40 years ago and doesn’t directly address digital communications.
The Consumer Financial Protection Bureau on Tuesday proposed rules that would give the industry the go-ahead to send consumers unlimited amounts of texts and emails, accelerating a trend the watchdog bureau says could be beneficial for everyone.
The proposal is a victory for debt collectors such as San Francisco-based TrueAccord. Instead of making a barrage of phone calls, TrueAccord sends out millions of emails and texts every month. Next it hopes to contact delinquent consumers through chat applications such as WhatsApp.
“When you have a good online digital presence, you don’t need to make those calls,” said Ohad Samet, the company’s co-founder and CEO. “The only question here is why hasn’t everyone else moved to digital-first models yet.”
But this digital-first approach has alarmed consumer advocates who worry the CFPB could give an industry known for high-pressure tactics a new way to violate consumers’ privacy. While many Americans understand how to deal with a pesky creditor calling their landline, their texts, emails and social media are new, more personal territory.
“People are able to ignore phone calls, and that is the thing debt collectors don’t like,” said David Phillips, an Illinois attorney who has filed dozens of suits against debt collectors. “It’s as if a debt collector is able to show up at your house and pound on the door. That is 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 could call someone to seven times in a week. After reaching the consumer, the debt collector wouldn’t be allowed to call again for a week. It would also update the disclosures the companies must provide in written communications.
Consumers could still tell debt collectors to stop contacting them in any way, under the law.
The debt collection industry said it appreciates the CFPB proposal, but it called the cap on the number of phone calls it can make “arbitrary.” The proposed rules would “unnecessarily impede communications with consumers,” said a statement from Leah Dempsey, senior counsel for ACA International, a large industry lobbying group.
