Some banking institutions and debt collection agencies are taking to the social media to track down those who owe or to lure brand new customers. Regulators in Washington are putting a microscope on the methods.
Ways to keep away from rules
The Fair Debt Collections Practices Act, established more than 30 years ago, protects consumers from many abusive collection practices. However, those laws were established long before there was such a thing as the Internet or social networking. Therefore, the laws have been spongy on the matter.
The Association of Credit and Collection Professionals is an international trade association that Mark Schiffman is part of. He explained that member businesses should not use social media as the rules are not clear.
Not everyone states no to social media
Not every collector listens to the advice.
Lawyer Billy Howard spoke with author Carl Dougherty about the methods of some debt collectors for a piece in Bloomberg.
“You get a friend request from some chick in a bikini,” Howard said. “You say yes, and then somebody says ‘by the way, I’m a debt collector.'”
Some say the practice at times borders on stalking or harassment.
Problem on a federal standard
This issue has been noted by the Federal Trade Commission and Consumer Financial Protection Bureau. The agencies will decide if collectors can use LinkedIn, Facebook and other social online websites to contact consumers.
The federal organizations have already laid down rules for debt collection businesses, regulating aggressive rhetoric, making sure consumers are kept updated on any legal actions, and also making it easier for consumers to register complaints.
Financial institutions also in trouble
Meanwhile, The U.S. Federal Banking institutions Examination Council is urging the public to weigh in on its proposed guidance, seeking to lay down limitations for how banking institutions can use social networking in attracting business. To view that guidance, go to:
Their website
The Consumer Financial Protection Bureau points out that 30 million Americans are being pursued by collectors, and about $12 billion in revenue is made in the Accounts Receivable Management industry annually. That a ton of cash and a ton of abuse.
Do not be afraid to speak up
Get a hold of the Consumer Financial Protection Bureau for FTC if you feel you have been harassed by debt collectors.
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