Federal financial experts are considering ways to limit how collectors and financial institutions can use social networking in searching for delinquent debtors or attracting customers.
Social networking slips between regulatory cracks
The Fair Debt Collections Methods Act, established more than 30 years ago, protects customers from many abusive collection practices. However, those regulations were established long before there was such a thing as the Internet or social media. Therefore, the laws 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 networking for collection, according to Mark Schiffman of the trade association.
Social networking used by some
Not every collector listens to the advice.
The methods were discussed by lawyer Billy Howard 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
The Consumer Financial Protection Bureau and the Federal Trade Commission are looking into regulating how, or even if, debt collectors should be legally allowed to pursue debtors on Facebook, Twitter, Google Plus and LinkedIn.
The federal agencies have already laid down rules for debt collection companies, regulating aggressive rhetoric, making sure customers are kept updated on any legal actions, and also making it easier for customers to register complaints.
Looking at banks more closely
The Federal Banking institutions Examination Council wants to put more limits on how banking institutions can use social networking, and it wants public opinion on the issue. You can get more information by going to:
Their website
The CFPB says 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.
State what you think
Get a hold of the CFPB for FTC if you feel you have been harassed by debt collectors.
Social networking slips between regulatory cracks
The Fair Debt Collections Methods Act, established more than 30 years ago, protects customers from many abusive collection practices. However, those regulations were established long before there was such a thing as the Internet or social media. Therefore, the laws 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 networking for collection, according to Mark Schiffman of the trade association.
Social networking used by some
Not every collector listens to the advice.
The methods were discussed by lawyer Billy Howard 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
The Consumer Financial Protection Bureau and the Federal Trade Commission are looking into regulating how, or even if, debt collectors should be legally allowed to pursue debtors on Facebook, Twitter, Google Plus and LinkedIn.
The federal agencies have already laid down rules for debt collection companies, regulating aggressive rhetoric, making sure customers are kept updated on any legal actions, and also making it easier for customers to register complaints.
Looking at banks more closely
The Federal Banking institutions Examination Council wants to put more limits on how banking institutions can use social networking, and it wants public opinion on the issue. You can get more information by going to:
Their website
The CFPB says 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.
State what you think
Get a hold of the CFPB for FTC if you feel you have been harassed by debt collectors.
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