Debt collectors can now send you emails, text messages, and private messages. Thank Trump

If you’ve spent more money on holiday treats this year, you’re not alone.

More than half of Americans planned to increase their holiday spending as part of an effort to shake off pandemic gloom, according to the study. recent poll. Some said they would spend $1,000 more than they did a year ago.

But about a third of respondents acknowledged fears that they would go even deeper into debt, and these fears are justified.

family debt exceeded $15 trillion. according to the New York Federal Reserve, the first time in the third quarter, driven in part by rising inflation.

Total credit card balances jumped $17 billion to about $800 billion, reversing more financially prudent behavior with many consumers making upfront payments due to COVID-19.

But that’s not all. You should also be aware that the rules for collectors have changed, and not necessarily for the better for consumers.

Call it a belated Christmas present from Donald Trump.

While Trump was president, his business-friendly Consumer Financial Protection Bureau passed new rules to allow debt collectors to send emails and text messages to people, as well as follow and send messages via social media.

These new rules finally went into effect this month.

Kathleen Kraninger, who headed Trump’s consumer protection agency, despite zero previous experience Consumer Affairs, says Blog Post last year that new rules are needed for “a debt collection system that works for consumers and industry in today’s world.”

“Debt collectors and consumers are trapped in a time warp,” she said. “They were required to communicate with each other in accordance with the standards adopted by Congress in 1977.”

While this is true, consumer advocates warn that the use of debt collectors in the digital realm can only make things harder for people with financial obligations.

Linda Sherry, a spokesperson for the advocacy group Consumer Action, said the prospect of electronic debt collection could make it harder for people to “determine if it’s a real debt collector or a scammer.”

“It can work both ways,” she told me. “They might have ignored the real debt collector or responded to the scammer believing it was a real collection.”

Sherry said the expected spike in cyber notifications from collectors “will be very confusing” for many people, “and consumers will have to pay very close attention to properly respond and enforce their rights.”

I asked the new CFPB leadership if there were any discussions within the agency about revising or repealing Trump-era rules. Nobody came back to me.

But Sherry makes a good point: At a time when most people are bombarded with emails, text messages, and social media posts from scammers on a daily basis, adding debt collectors to them probably won’t do consumers any good.

Legal messages can be ignored. Fake messages can lead people to send money to scammers. Consumers will need a whole new level of vigilance.

In announcing the new rules last month, the CFPB acknowledged that it’s getting harder now for consumers.

“If a collector contacts you about your debts, you may have concerns about whether the collector is legitimate, whether the debt is yours, or whether the amount the collector is trying to collect is accurate,” the agency said.

He reminded consumers that they have rights under federal law. Fair Debt Collection Practices Actwhich, among other things, prohibits a debt collector from threatening or harassing people.

Under the new rules, an electronically contacting collector must clearly identify himself and his target, and must indicate how the collector can be contacted for any questions or disputes.

If a collector contacts you via Facebook or another social network, their communications must be kept confidential and not accessible to other users.

The faucet must state their intentions in advance before asking to be added as a friend or contact for direct communication. It should also provide an easy opt-out option if you don’t want to receive further online communications.

If you have a problem with a collector that is not following the rules, you can file a complaint with the CFPB. through your website.

ACA International, a debt-collection trade group, has been pushing hard for the new rules under the Trump administration.

The group called the ability to send emails, text messages and messages to borrowers “the biggest achievement in the receivables management industry” in more than four decades.

But, as Spider-Man would say, with great power comes great responsibility.

It remains to be seen if debt collectors will use their new cyber-freedom responsibly, or if some, especially the most unscrupulous ones, will use online messaging as a cool new way to get people to cough up some money.

Remember, Not all debt is recoverable. In California, the statute of limitations for consumer debt is four years. This means that the creditor cannot win in court after four years.

But if you buy even a small amount of any bond older than four years, it will reset the debt clock, allowing the collector to sue again.

If you have questions about any report that you owe cash, you have the right by law to request collateral details and ask if the debt is subject to the statute of limitations.

Collectors have just received powerful new tools. But you are not defenseless. Know your rights. Use them.