Federal financial regulators are considering ways to limit how debt collectors and banks can use social networking in searching for delinquent borrowers or attracting consumers.
Social networking slips between regulatory cracks
There have been a ton of rules safeguarding consumers from abusive collectors, but they were established over 30 years back. This was long before social media and the internet when the Fair Debt Collections Methods Act was put together.
Mark Schiffman of the Association of Credit and Collection Professionals, an international trade association of debt collection firms, said "the rules on it are not clear," while recommending its member businesses keep away from using social networking for collection purposes.
Abuse with social networking
Not every collector listens to the advice.
Lawyer 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.'"
Many believe that this is way too close to harassment and may even be considered stalking.
Federal level considered
This issue has been noted by the Federal Trade Commission and CFPB. The agencies will choose if collectors can use LinkedIn, Facebook and other social websites to contact customers.
The federal agencies have already laid down rules for debt collection businesses, regulating aggressive rhetoric, making sure consumers are kept updated on any legal actions, and also making it easier for consumers to register complaints.
Looking at financial institutions more closely
The Federal Banking institutions Examination Council wants to put more limits on how banking institutions can use social media, and it wants public opinion on the issue. You can learn more by going to:
The Regulations Government Website
The CFPB claims 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.
Do not be afraid to speak up
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.
Social networking slips between regulatory cracks
There have been a ton of rules safeguarding consumers from abusive collectors, but they were established over 30 years back. This was long before social media and the internet when the Fair Debt Collections Methods Act was put together.
Mark Schiffman of the Association of Credit and Collection Professionals, an international trade association of debt collection firms, said "the rules on it are not clear," while recommending its member businesses keep away from using social networking for collection purposes.
Abuse with social networking
Not every collector listens to the advice.
Lawyer 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.'"
Many believe that this is way too close to harassment and may even be considered stalking.
Federal level considered
This issue has been noted by the Federal Trade Commission and CFPB. The agencies will choose if collectors can use LinkedIn, Facebook and other social websites to contact customers.
The federal agencies have already laid down rules for debt collection businesses, regulating aggressive rhetoric, making sure consumers are kept updated on any legal actions, and also making it easier for consumers to register complaints.
Looking at financial institutions more closely
The Federal Banking institutions Examination Council wants to put more limits on how banking institutions can use social media, and it wants public opinion on the issue. You can learn more by going to:
The Regulations Government Website
The CFPB claims 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.
Do not be afraid to speak up
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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