Debt collectors turn to social media to track down delinquents
If a debt collector researched Square Cafe by becoming his Facebook friend under false pretenses or by connecting with individuals on his friends list under a false pretense, the company is in violation of disclosure laws and laws prohibiting contact with third parties associated with the debtor without prior consent, said Mr. Koegel.
In November, the Consumer Financial Protection Bureau kicked off the process of clarifying debt collection rules, including proposed guidance to financial institutions warning that the debt collection act also applies to digital forms of communication.
According to Mr. Koegel, the FTC has been spreading the message to third-party collectors for at least since at least 2009.
“We have been emphasizing over the last five years that those rules apply to text messaging and social media, Mr. Koegel said. “The mode of communication doesn’t matter.”
There’s little argument the rules have been announced. Whether they’re clear enough for third-party debt collectors to understand is another matter, said Mark Schiffman, vice president of public affairs for the Minneapolis-based Association of Credit and Collection Professionals International.
Mr. Schiffman argues that laws limiting disclosure of debt obligations keeps collectors from leaving voice messages in case someone other than the debtor hears the content. And laws against “excessive” phone calls do not define how many calls can be made within a given period of time.
Mr. Schiffman said collectors use a method called “skip tracing” to build profiles on debtors using publicly available information found online, including public information displayed on social media sites. Although he said bad actors who take skip tracing too far and violate the law deserve punishment, he also said a little clarity surrounding what can and can’t be done will go a long way for collectors and consumers.
“In terms of the (Fair Debt Collections Practices Act), there’s a lot of gray area. Interpreting it is difficult and usually depends on which lawyer in which state is making the argument. It’s a large part of what ails debt collection efforts,” he said.
If a lack of clarity is a hurdle for collectors, a lack of awareness that the federal debt collection act even exists is a mountainous obstacle for consumers, said Mr. Koegel.
He encouraged consumers to check credit reports at AnnualCreditReport.com to ensure the debt being reported is the same as what’s being collected; to learn their rights; and to directly contact the Federal Trade Commission, the Consumer Financial Protection Bureau or the state Attorney General’s office to report collection agency violations as soon as they occur.
For consumers worried that filing a report will send collection agencies to their doorstep, Mr. Koegel noted all reports are confidential and investigations are conducted with solely the consumer’s rights in mind.
“Regardless of how much a debtor owes, it doesn’t mean they have to sacrifice their right to basic human dignity,” he said.
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