PHILADELPHIA — While industry representatives expressed their gratitude and willingness to work with the Consumer Financial Protection Bureau on its proposed debt collection rule, consumer advocates were overwhelmingly pessimistic about the proposed rule’s likely impact on consumers, should it be finalized in its current form.
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Both sides were center stage yesterday at Houston Hall at the University of Pennsylvania in Philadelphia, sitting on opposite sides of four representatives from the CFPB, including Director Kathy Kraninger.
During her opening remarks at yesterday’s Debt Collection Town Hall, Kraninger took an opportunity to address what she called “mis-reporting” in the mainstream media with respect to the proposed rule and its inclusion of allowing debt collectors to communicate with individuals via text messaging and email. Main media outlets have reported that collectors will be able to send “unlimited” texts and emails to consumers, but Kraninger pointed out that the Fair Debt Collection Practices Act prohibits collectors from harassing individuals and that “standard will continue to apply.”
Advocates were concerned that the seven call limit per debt per individual was too high and could subject individuals to dozens of calls per week if they have multiple debts in collection.
“I would argue that seven calls crosses the line between communication and outright harassment,” said Michael Froehlich, a managing attorney with Community Legal Services of Philadelphia.
The advocates did not address that individuals do not have to be subjected to more calls than they want to receive if they answered collectors’ calls and engaged in a conversation about unpaid debts.
“The proposed rule will do little to stop what most consumers complain about,” said April Kuehnhoff, a staff attorney with the National Consumer Law Center. “This rule will shape collections for decades. It is crucial that the CFPB gets it right.”
Later, Kuehnhoff suggested that a three-call cap would be more appropriate for consumers.
During the comment period from those in the audience, one consumer attorney suggested that all time-barred debt be expunged and collectors be barred from attempting to collect on debts where the statute of limitations has expired.
Advocates also expressed concerns about how consumers can revoke consent to be contacted, a new limited content message, and changes made by the CFPB between when it issued an outline of proposals in 2016 and the proposed rule this week.
Reading the proposed limited content message, Froehlich said it is “so clear it’s coming from a debt collector. It strikes against consumer’s privacy.”
