Like many other industries, debt collectors are using the tools at their disposal to locate debtors and collect outstanding debt; social media and even texting have come into play. It leaves some wondering if it is legal and/or ethical.
According to the FTC, the Fair Debt Collection Practices Act doesn’t prohibit this, as long as debt collectors are staying in compliance. This can be a bit more tricky with social media compared to other methods for contacting debtors.
Along with the more standard compliance issues, including being upfront as to the reason for the contact, not using deception to get debtors to contact the collection agency, and providing full disclosures, there is one area that can get fuzzy when it comes to social media.
It’s standard law that debt collection agencies cannot discuss or disclose information to third parties. In a traditional sense, if a collection agency calls a home to speak with someone, they can discuss specifics with the spouse, for example. When it comes to social media, it means a bit more than this.
First, it prohibits debt collectors to post information on a person’s social media site in a pubic facing venue. This means that they can send a tweet directed at the user, post on someone’s Facebook wall for the world to see, or reach out publicly through a message board or forum. This, for example, is wildly problematic:
Second, it takes it a step further and makes the waters more muddy. In many social media venues, one would have to join the user’s social network (become “friends” on Facebook, or mutually follow each other on Twitter) to communicate through private messaging or Direct Message, which would fulfill the third party disclosure compliance. However, in a recent FTC investigation, it was determined that “[D]ebt collectors may violate the FDCPA and/or the FTC Act by . . . requesting to join debtors’ social media networks (for example, by sending a ‘friend request’ on Facebook).” So that’s not an option either.
What’s left for debt collection agencies as far as using social media to identify and communicate with debtors? Since direct communication can be risky, they can use social media monitoring to
- Learn more about the debtor’s current address or other identifying information, such as a cell phone number, if the person has their profiles set to public vs private
- Identify connections through social networks that may help them locate the debtor to make contact
- Learn more detailed information about the debtor, including if they are currently employed, which would indicate that they have an income with which to repay the debt
While social media and mobile devices have potentially made life a bit easier for debt collectors, the laws are still as stringent as they are for traditional means of contact. Of the two, text communication appears to be the safer for direct communication. However, social media background checks and social media research can be incredibly helpful for this industry if used correctly.