Debt Collectors Will Soon Be Able to Slide Into Your DMS — Here’s What You Need to Know
If you’ve ever looked in your “message requests” on social media — the folder that screens unknown senders — you know it can already be a pretty sketchy place. But soon, messages from debt collectors could be piling up there along with the bots advertising dubious ways to “buy” followers.
A new rule announced by the Consumer Financial Protection Bureau gives debt collectors the green light to contact you on social media platforms like Facebook, Instagram, and Twitter. The CFPB says the rule change is necessary; Kathy Kraninger, the Director of the CFPB, wrote in October 2020 that debt collectors and consumers alike have been “trapped in a time warp” that limits communication to the standards outlined more than four decades ago in the Fair Debt Collection Practices Act of 1977.
This updated law will go into effect in October 2021, and, if you have a debt in collections, you might suddenly notice an uptick in communication come fall: Consumer Reports points out that the new guidelines will allow collection agencies to send an unlimited number of texts, emails, and social media messages until your debt has been paid.
The implications could be far reaching, as about one third of Americans with credit files in 2019 had accounts in collections, according to the Urban Institute. That number goes up to 42 percent for those living in communities of color. But these stats were recorded prior to the job losses, furloughs, and other economic stressors brought on by COVID-19, which means the issue might be even more pervasive.
Some financial advocates and legislators have raised concerns about the new debt collection guidelines. United States Sen. Sherrod Brown (D-OH) said in a statement that the rule puts the burden on consumers to opt out of harassing text, email, and social media messages — and does so at a time when working families are struggling to pay for basic necessities while debt collectors are reporting record profits.
The rules could also easily lead to electronic harassment and missed communication if messages are sent to old accounts (remember MySpace?), according to a joint release from a number of consumer advocacy groups, including the National Consumer Law Center.
Here’s what experts say you should know about the updated debt collection guidelines as well as what you should do if a debt collector slides into your DMs.
Debt Collectors Can Only Send Private Messages
When the new rule goes into effect, collection agents suddenly won’t be able to publicly comment on your Facebook status or Instagram photos asking you to pay up, or tweet at you with a proposed payment arrangement.
“Even though collectors will be able to reach out to you via social media, they cannot post on your public pages or feeds,” says Todd Christensen, education manager with Money Fit, a nonprofit debt relief agency. “They must use direct messaging.”
Debt collectors also aren’t allowed to catfish you. According to the Federal Trade Commission, collectors are barred from setting up fake social media accounts in order to friend request you (or anyone in your social network in an attempt to glean personal information about you).
“The debt collectors are required by law to make it clear from the start who they are and they cannot pose as a friend to get access to you via social media,” says John Davis, a financial educator and founder of ScoreSense, a credit monitoring service.
Always Request Debt Verification
If you are contacted by a debt collector via social media, the first thing you should do is request verification of the debt.
“Consumers have a right to request a detailed accounting of how the debt amount was tallied and the name of the creditor,” says Darryl Smith, an attorney in Florida.
For the most part, you should respond to a DM in the same way you would contact by phone, Christensen says. If you are unsure of the debt, including whether it’s yours or not, ask the creditor to send you a confirmation letter via mail. In most cases, they should already have your mailing address. He advises against giving your address through a direct message unless you’ve fully confirmed the correspondence is legitimate. Don’t give away any other information — instead, ask the contact for their work phone or email and move the conversation off social media.
If you can have already determined the debt is not yours, send the collection agency a letter via mail (certified or signature-required) asking them to stop contacting you, Christensen recommends.
“Social media platforms give you the option to block specific people, which you might consider doing for harassing contacts,” Christensen says.
Beware of Scams
Also, know this: The ability to collect debts on social media could give way to even more scams than currently exist on social media as is.
“There will be just as much debt collection fraud on social media as there has been by phone, and perhaps even more because some fraudsters will figure out a way to automate their systems,” Christensen says.
Some red flags indicative of scams could include poorly written messages with misspellings and requests to settle your debt gift cards or wire transfers, he says. If an account is posing as a debt collector for a certain company, it’s worth researching that company’s actual Instagram account — some scam accounts try to mimic the handle with various letters, or will use buzzwords to try to prey on vulnerable users. The bottom line here? Assume DMs from debt collectors are scams until they prove their legitimacy.
How to Opt Out of Debt Collection DMs
“Given how there’s no limit to the number of messages debt collectors can send you via text or social media, opting out is sure to be a popular choice,” says Sean Messier, a credit industry analyst with Credit Card Insider, a credit card comparison and consumer financial site.
Of course, opting out of communications won’t make the debt disappear and, if it’s a legitimate debt that you owe, you’ll want to address it if you can, he says.
(BTW, if you’re struggling to keep up with bills during COVID-19, here are some to consider putting on hold first).
While the CFPB has indicated that an opt-out will be available for all digital forms of communication, exact details have not yet emerged on how to take this step. In the meantime, you could send the collection agency a letter via snail mail to cease contacting you, Christensen says, but this option could land you in court if you actually owe the debt and the collection agency would rather sue you than write off the account or sell it to another collection agency.
Tightening Your Privacy Settings
If you cringe at the idea of debt collectors tracking you down online, Messier suggests you consider adjusting the name you use on social media.
“Many people already choose to use only their first name, and this could make it easier to avoid constant harassment from debt collectors,” he says.