New Debt Collection Rule Allows Contact on Social Media

Serious young woman using her mobile phone while sitting on sofa in the living room at home.

Later this year, that direct message you receive on Facebook, Twitter or Instagram could be from someone less friendly than an old acquaintance looking to catch up. Effective Nov. 30, 2021, debt collectors will be allowed to reach out to you on social media in pursuit of money you owe.

If you have debts in collections, it's important to understand your rights as outlined in the Fair Debt Collection Practices Act, the 1977 law that governs how debt collectors can seek past-due money for certain kinds of debt. These rule changes, issued late last year by the Consumer Financial Protection Bureau, modernize and clarify the law's prohibitions and requirements.

As part of the update, the bureau clarified that a debt collector can send a direct message on social media to someone who owes debt. They can also send a friend request to the person being contacted as long as they disclose their status as a debt collector. The new rules prohibit a debt collector from communicating via social media in a way that's viewable to the public or to their contact's friends.

Aside from their newfound ability to contact people through social media, debt collectors still can contact you via phone, letter, email or text message.

However, new debt collection regulations limit collectors to seven attempted calls per week for each debt owed. These calls include those made directly to the person they are attempting to collect from as well as calls made to their friends and family to ask for their contact information. The new rules also will let debt collectors leave voicemail messages for people who owe money, but not for anyone else who's contacted about your debt.

What to Do if You Have Debt in Collections

If you've got debt in collections, it's important that you don't ignore it. Ignoring the debt won't make it disappear, and could actually make matters worse. Tackling those overdue bills right away will put a halt to debt collectors bugging you and should ease damage to your credit.

Here are other steps to take when you have debt in collections.

  • Cooperate with the creditor. If your debt has gone unpaid for just a few months, it's likely that efforts are being made to collect it by the original creditor (your credit card issuer, for instance). Once a company's in-house debt collector runs into a wall, the creditor might turn over the debt to an outside debt collector. Before that happens, contact your creditor to see if you can work out a payment plan.
  • Call off the collector. In most instances, a debt collector must quit contacting you if you ask them in writing to do so. While this won't make your debt vanish, it can give you some peace as you work to repay the debt.
  • Explore debt negotiation. A debt collector may be willing to compromise in order to get at least some of its money. So it's worth inquiring about a lump-sum payment that's lower than the amount you owe or about a debt repayment plan.
  • Look into legal help. If you feel like you're in over your head with the past-due debt, you may want to consider consulting an attorney. This could be especially important if the debt collector is taking you to court.

How Does a Collection Account Affect Your Credit?

After a debt goes into collections, it'll most likely show up on your credit reports and potentially cause your credit scores to dip.

Once a creditor hands your debt off to a collector, the original account will be marked on your credit reports as transferred and closed. A debt that's gone into collections will stay on your credit reports for seven years after the initial delinquency date—even after you've paid it off.

Your credit scores may improve after you've wiped out the collection account. That's because some newer credit scoring models don't include collection accounts with no balance in score calculations. However, older scoring models, including those used in mortgage lending, still factor into collection accounts with a zero balance.

The Bottom Line

Regardless of whether a debt collector contacts you via Facebook or some other means, it's wise not to try to wish away the debt. Debt that's in collections can stick with you for many years. To avoid further trouble, face up to the debt right away so that you can eventually put it behind you.