Debt collection regulators looking at social media practices

In the wake of stiffer laws, some debt collectors and banks have turned to the social networking as a way to track down debtors and to drum up new business. However, federal experts are looking into limiting the practice.

Rules mean nothing with social networking

There have been a lot of rules guarding customers from abusive collectors, but they were established over 30 years ago. This was long before social media and the internet when the Fair Debt Collections Methods Act was put together.

Mark Schiffman of the Association of Credit and Collection Professionals, an international trade association of debt collection companies, said “the rules on it are not clear,” while recommending its member companies stay away from using social media for collection purposes.

Social networking used by some

However, not every Accounts Receivable Management business has heeded those words.

Lawyer Billy Howard spoke with writer Carl Dougherty about the practices of some 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.'”

It is close to stalking or harassment, some believe.

Looking at the issue

It may not be allowed for collectors to use Facebook, Twitter, Google Plus and LinkedIn to contact consumers soon as the Federal Trade Commission and CFPB are looking into stopping abusive practices.

These organizations have already spent a lot of time producing rules to shield customers from aggressive legal methods, so it is not easier for customers to register complaints. New changes have to be made evidently.

Looking at banks more closely

The Federal Financial institutions Examination Council wants to put more limits on how financial institutions can use social networking, and it wants public opinion on the issue. You can learn more by going to:

The Regulations Government 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 lot of cash and a lot of abuse.

Give you opinion

Consumers 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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