US creditors can now contact debtors via social media

Debt Recovery Agencies in the United States are now able to use Social Media to assist in collecting debts. They will be able to contact debtors via direct messages (DM) on social media on platforms such as Twitter and Facebook.

The rules from the Consumer Financial Protection Bureau (CFPB) – approved under the Donald Trump administration in 2020 - opens the door for creditors to use DMs to contact millions of Americans who have loans.

These rules will see US debt recovery agencies contacting debtors via social media networks. The agencies must initially inform the debtor that they are from an American debt collection agency.

Consumers can opt out of these messages, but creditors do not need permission to contact people. There are no rules for how many messages they are allowed to send.

The latest updates have been made to the Fair Debt Collection Act which is over forty years old. Lenders had long argued that these changes were needed, given that the Fair Debt Collection Practices Act, which regulates the industry, became law in 1977 - long before the advent of social media and mobile phone texts.

The rule also creates a new limit for phone calls. Seven calls can be made each week for any particular debt, but people with multiple debts may still be called multiple times each week.

Critics warn that the changes puts borrowers at risk, such as missing key information about their debts or falling victim to illegal online scams