Thursday, February 7th, 2013 at
Bloomberg reports that the ways in which the debt collection industry uses social media may be scrutinized by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) in the coming year. With the passage of the Dodd-Frank Act in 2010, the CFPB was created. Among its designated functions is oversight of the Fair Debt Collection Practices Act (the FTC is still responsible for FDCPA enforcement actions, however).
On January 2, 2013, the CFPB began exercising its supervision authority over approximately 175 debt collection agencies, all of which have more than $10 million in annual receipts. CFPB examiners will be evaluating debt collection agencies for their practices surrounding proper disclosures to consumers, providing consumers with accurate information, and dispute resolution.
Thursday, February 23rd, 2012 at
Awhile back, U.S. News & World Report ran an interesting piece on social media and debt collection. Obviously, the 1978 Fair Debt Collection Practices Act could not have anticipated either the rise of the Internet or social media, and the FTC has held hearings in the past year regarding new technologies and debt collection. According the U.S. News article, debt collectors have been known to set up fake Facebook profiles and friend consumers who collectors believe owe a debt. Although the courts haven’t ruled specifically on social media, it may very well be decided that debt collectors can try and locate you via social media, just as they would try and locate you via other methods of skip tracing. It seems logical, however, that it would be against the spirit of the FDCPA to specifically mention your debt on Facebook or other social media outlets.
The takeaway? First, check your Facebook privacy settings. Many people’s Facebook profiles are public, meaning virtually anyone with a Facebook account can find you. Restrict the information you share to friends only. Additionally, be careful what you post on the “Info” section of your Facebook page. Listing your employer, your cell phone number, and so forth is low-hanging fruit for a debt collector. And, don’t forget what your mom taught you – don’t talk to strangers. In the same vein, don’t “friend” strangers on Facebook. The U.S. News article also says to be judicious in your use of the “Like” button on websites. The fainter your digital footprint, the more difficult it is to be found.
Thursday, June 2nd, 2011 at
Bryce Covert over at the Huffington Post published a great article that serves as a snapshot of the excesses of the debt collection industry. Saying that some debt collection agencies “act more like organized crime than private businesses,” the article outlines the soaring number of debt collection complaints filed with the Federal Trade Commission and provides a round-up of reporting by the Minneapolis Star-Tribune and the Wall Street Journal.
The article also serves as a warning for consumers who use social networks, noting that many debt collection agencies use Facebook to “friend” consumers in order to get their contact information. And, although we’ve often discussed the practices of debt buyers in this blog, the HuffPo article paints a stark picture: Portfolio Recovery Associates “pays about 2.5 cents for every dollar of bad debt it purchases, but it makes back about 7.5 cents.”
The article ends with a call for “cops on the beat to rein [debt collection agencies] in. We couldn’t agree more.
Tuesday, November 30th, 2010 at
The Fair Debt Collection Practices Act allows debt collectors to contact a consumer’s family members, friends, and acquaintances in order to locate the person who owes money, but how does Facebook play into the equation? The FDCPA was written long before social networking came on the scene, and so doesn’t directly address contacting consumers via social networks. Alexia Tsotis over at TechCrunch highlighted a case that has been filed in Florida courts, whereby a consumer was allegedly called up to 10 times per day by MarkOne Capital. A MarkOne debt collector using a fake name contacted at least one of her Facebook friends, asking the friend to have the consumer call him. The lawsuit alleges that MarkOne Financial violated the Florida Consumer Collection Practices Act. It will be interesting to see how the court rules, and even more significant when a lawsuit like this one is filed in federal court charging a violation of the FDCPA.
Sunday, July 25th, 2010 at
The Houston Chronicle reports that the debt collection industry is abuzz about using social networking sites like Facebook to gather information about consumers who owe money. The Fair Debt Collection Practices Act regulates the ways in which debt collectors can gather information about consumers, but hasn’t kept pace with technology. As consumers put an increasing amount of private information on Facebook and other social networking sites, there’s a question about whether that information is in the public domain, and can be treated like information in other publicly available databases, or whether debt collectors accessing that information would violate privacy provisions of the FDCPA.
There’s some consensus among debt collectors that gathering contact information via social networking sites is acceptable, but other information may not be. The bottom line? Pay attention to social networking sites’ privacy options, and ensure that the information you wish to remain private stays private.
Sunday, May 30th, 2010 at
Debt collectors at the Australia and New Zealand Banking Group (ANZ) are the subject of an internal investigation and may face charges under the Australian Federal Privacy Act for posting a fake Facebook profile in order to “friend” customers who owed money. The profile, listed under the name “Max Bourke,” was used to try and find bank customers who had moved without leaving a forwarding address. The profile has been taken down. The lesson: Make sure you know who your Facebook “friends” are.