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Consumers in control of debt collection process

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New debt collection rules now allow debt collectors to use email, text and social media messaging to track down consumers in seeking repayment of debts. While the new rules change how Minnesotans can be contacted by debt collectors, consumers are still in control to specify which communication method a collector can use.

The Minnesota Department of Commerce, which licenses individual debt collectors and collection agencies that conduct business in Minnesota, is alerting consumers to be aware of recent rule changes that may impact a consumer’s experience with the debt collection agency.

“If you’re contacted by a debt collector, you can specify which way you want to be contacted,” Minnesota Department of Commerce Commissioner Grace Arnold said. “You can tell the debt collector to stop contacting you by text, email or social media, and instead say how you would prefer to be contacted. As a consumer, you are still protected under the new rules.”

The new debt collection rules are significant as many rules and regulations in the debt collection industry have not changed since the 1970s. The new rules were issued by the Consumer Financial Protection Bureau and took effect November 30, 2021.

The new rules place more restrictions on how often collection agencies can contact consumers. A collection agency cannot attempt to call a consumer more than seven times within seven days for each account in collections. If the consumer speaks to the collection agency, that collection agency cannot call that consumer again to collect on the account for seven more days unless requested by the consumer.

Minnesotans who feel they are being treated unfairly or engaging in ways with a debt collection agency that they don’t want or don’t think is legal should contact Commerce’s Consumer Services Center at consumer.protection@ state.mn.us or 651-539-1600 or 800-657-3602.

You can also file a complaint online: mn.gov/commerce/consumers/filea complaint/complaints – select Debt Collection as industry when filing the complaint.

The rules change the nature and content of the validation notice debt collectors must provide consumers, which now requires providing details about the debt to include:

• The debt collector communication disclosure.

• The debt collector’s name and mailing address and the consumer’s name
and mailing address.
• The account number, the name of
the original creditor and the current
creditor.
• The itemization date and an itemization of the current amount of the debt
reflecting interest, fees, payments and
credits since the itemization date and
the current amount of the debt.
• Information about consumer protections and consumer-response information including prompts for disputing
the debt.
• The rules do now allow validation
to be given to the consumer orally or
electronically, instead of by mail.

Additionally, the rules affect when a collection agency can report the debt to the credit reporting agencies. In the past, some collection agencies would park or place the debt on the consumer’s credit report and wait for the consumer to contact them. The new rules restrict this practice. Now, in most cases, the debt collection agency must speak to the consumer or send a letter or electronic message about an alleged debt before reporting the debt to the credit reporting agencies.

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