Federal financial regulators are looking into ways to limit how collectors and financial institutions can use social networking in tracking down delinquent debtors or attracting consumers.
Rules mean nothing with social media
The Fair Debt Collections Practices Act, established more than 30 years back, protects customers from many abusive collection practices. 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.
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 avoid using social media for collection purposes.
Not everybody states no to social media
However, not every Accounts Receivable Management company has listened to 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.
Federal regulators looking at the issue
It may not be permitted for collectors to use Facebook, Twitter, Google Plus and LinkedIn to contact customers soon as the Federal Trade Commission and Consumer Financial Protection Bureau are looking into stopping abusive practices.
The federal agencies have already laid down rules for debt collection companies, 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
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 financial institutions can use social media in attracting business. To view that guidance, go to:
Their website
The CFPB claims there are about 30 million American customers being pursued by collection companies today. The Accounts Receivable Management industry earns about $12 billion in revenue each year.
Views from all
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.
Rules mean nothing with social media
The Fair Debt Collections Practices Act, established more than 30 years back, protects customers from many abusive collection practices. 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.
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 avoid using social media for collection purposes.
Not everybody states no to social media
However, not every Accounts Receivable Management company has listened to 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.
Federal regulators looking at the issue
It may not be permitted for collectors to use Facebook, Twitter, Google Plus and LinkedIn to contact customers soon as the Federal Trade Commission and Consumer Financial Protection Bureau are looking into stopping abusive practices.
The federal agencies have already laid down rules for debt collection companies, 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
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 financial institutions can use social media in attracting business. To view that guidance, go to:
Their website
The CFPB claims there are about 30 million American customers being pursued by collection companies today. The Accounts Receivable Management industry earns about $12 billion in revenue each year.
Views from all
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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