The Consumer Financial Protection Bureau is proposing changes to the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as “Dodd-Frank”). State attorneys general from 28 states have banded together to comment on the changes, which may impact an estimated 49 million American consumers who are contacted each year by debt collectors.
The proposed rule changes would allow debt collectors to use social media as a form of debt collection communication. The rule would still ban the use of public-facing social media to contact consumers but opens the door for collectors to send private messages to consumers. The attorneys general are concerned that social media profiles are prone to misidentification and that using them in an attempt to contact debtors may raise privacy issues for individuals.
According to the letter, many social media services do not require users to use their real names, which could lead to misidentification. There is also concern that social media providers will mine the data exchanged through private messages. The collection of this data may allow advertisers to inundate consumers with unwanted ads or news related to debt collection. The letter asks the CFPB not to let debt collectors use any form of social media for debt collection communications, whether public or private facing.
It should be noted the proposed changes still allow states to create their own laws that would supersede federal regulations. This would allow states to develop proposals to prohibit the use of social media as a form of debt collection practices should the CFPB amend the social media rule as currently proposed.
Troutman Sanders’ Consumer Financial Services litigation practice, the Law360 Consumer Protection Practice Group of the Year for 2018, will continue to monitor and report on the proposed rule changes.