Some financial institutions and debt collection agencies are taking to the social networking to locate those who owe or to lure brand new consumers. Regulators in Washington are putting a microscope on the methods.
Regulations lost
The Fair Debt Collections Methods Act, established more than 30 years ago, protects customers from many abusive collection methods. However, those laws were established long before there was such a thing as the Internet or social media. Therefore, the rules have been spongy on the matter.
The rules are fuzzy, but it is recommended that companies that are part of the Association of Credit and Collection Professionals do not use social media for collection, according to Mark Schiffman of the trade association.
Some debt collectors use social media
The advice is certainly not required, so many do not listen.
Lawyer Billy Howard spoke with author Carl Dougherty about the practices 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.
Looking at the issue
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 sites to contact consumers.
Customers will be able to easily complain about any issues with rules on debt collection companies already, but evidently that will have to be expanded.
Looking at financial institutions more closely
In the meantime, 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 CFPB claims there are about 30 million American consumers being pursued by collection companies today. The Accounts Receivable Management industry earns about $12 billion in revenue each year.
Say what you believe
Customers who feel they are being harassed by debt collectors should report the activity on line or by telephone to the CFPB or the Federal Trade Commission.
Regulations lost
The Fair Debt Collections Methods Act, established more than 30 years ago, protects customers from many abusive collection methods. However, those laws were established long before there was such a thing as the Internet or social media. Therefore, the rules have been spongy on the matter.
The rules are fuzzy, but it is recommended that companies that are part of the Association of Credit and Collection Professionals do not use social media for collection, according to Mark Schiffman of the trade association.
Some debt collectors use social media
The advice is certainly not required, so many do not listen.
Lawyer Billy Howard spoke with author Carl Dougherty about the practices 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.
Looking at the issue
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 sites to contact consumers.
Customers will be able to easily complain about any issues with rules on debt collection companies already, but evidently that will have to be expanded.
Looking at financial institutions more closely
In the meantime, 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 CFPB claims there are about 30 million American consumers being pursued by collection companies today. The Accounts Receivable Management industry earns about $12 billion in revenue each year.
Say what you believe
Customers who feel they are being harassed by debt collectors should report the activity on line or by telephone to the CFPB or the Federal Trade Commission.
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