Some financial institutions and debt collection organizations are taking to the social media to locate those who owe or to lure brand new customers. Experts in Washington are putting a microscope on the methods.
Ways to stay away from rules
The Fair Debt Collections Methods Act does not check out the internet or social media when looking at how collectors can contact consumers. The act was there to set up rules to guard customers from abusive collectors, but the Internet was never addressed.
The Association of Credit and Collection Professionals is an international trade association that Mark Schiffman is part of. He explained that member companies should not use social networking as the rules are not clear.
Not everyone states no to social networking
The advice is certainly not required, so many do not listen.
Attorney Billy Howard spoke with writer 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.
Federal regulators looking at the issue
This problem has been noted by the Federal Trade Commission and Consumer Financial Protection Bureau. The organizations will choose if collectors can use LinkedIn, Facebook and other social sites to contact customers.
The federal agencies have already laid down rules for debt collection businesses, regulating aggressive rhetoric, making sure customers are kept updated on any legal actions, and also making it easier for consumers to register complaints.
More issues with financial institutions
In the meantime, The United States Federal Banking institutions Examination Council is urging the public to weigh in on its proposed guidance, seeking to lay down limitations for how financial institutions can use social media in attracting business. To view that guidance, go to:
Their website
The CFPB states there are about 30 million American consumers being pursued by collection firms today. The Accounts Receivable Management industry earns about $12 billion in revenue each year.
Views from all
Customers who feel they are being harassed by debt collectors should report the activity on line or by telephone to the Consumer Financial Protection Bureau or the Federal Trade Commission.
Ways to stay away from rules
The Fair Debt Collections Methods Act does not check out the internet or social media when looking at how collectors can contact consumers. The act was there to set up rules to guard customers from abusive collectors, but the Internet was never addressed.
The Association of Credit and Collection Professionals is an international trade association that Mark Schiffman is part of. He explained that member companies should not use social networking as the rules are not clear.
Not everyone states no to social networking
The advice is certainly not required, so many do not listen.
Attorney Billy Howard spoke with writer 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.
Federal regulators looking at the issue
This problem has been noted by the Federal Trade Commission and Consumer Financial Protection Bureau. The organizations will choose if collectors can use LinkedIn, Facebook and other social sites to contact customers.
The federal agencies have already laid down rules for debt collection businesses, regulating aggressive rhetoric, making sure customers are kept updated on any legal actions, and also making it easier for consumers to register complaints.
More issues with financial institutions
In the meantime, The United States Federal Banking institutions Examination Council is urging the public to weigh in on its proposed guidance, seeking to lay down limitations for how financial institutions can use social media in attracting business. To view that guidance, go to:
Their website
The CFPB states there are about 30 million American consumers being pursued by collection firms today. The Accounts Receivable Management industry earns about $12 billion in revenue each year.
Views from all
Customers who feel they are being harassed by debt collectors should report the activity on line or by telephone to the Consumer Financial Protection Bureau or the Federal Trade Commission.
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