Debt Collectors use of Social Media Sites Draws US Regulation

There are some debt collectors that have started using social media sites, such as Facebook, to contact debtors about their debts even when they have other means of contacting the debtor. In addition, some debt collectors are not only using the private messaging function on some social media websites but also posting where the debtors friends can see. 

These types of practices have led to an attempt by federal regulators in the Consumer Financial Protection Bureau (“CFPB”) and the Federal Trade Commission (“FTC”) to restrict how debt collectors can use social media websites to contact potential debtors. U.S. regulators are contemplating a series of actions in 2013 to impose a comprehensive federal oversight on the debt collection industry.

These regulations would also affect groups of debt collectors who have not faced this type of supervision before. The companies that engage in debt collection will need to be prepared for the significant oversight that the CFPB will bring. Issuers of creditor cards such as Capital One Financial Corp. and JP Morgan Chase and Co. would face supervision on how they handle debtors. Additionally, debt buyers such as Portfolio Recovery Associates Inc., Encore Capital Group Inc., and Astra Funding Inc. will also face federal oversight for the first time. 

Complaints about the debt collection industry will begin to be taken by the CFPB in the second quarter of this year. This system will link federal regulators and companies in an attempt to find solutions for consumers. Through the collection of complaints the CFPB will be able to amass data on the industry in anticipation of issuing proposals for new regulations.

The CFPB can also take enforcement action against debt collectors. The FTC also takes enforcement action on a regular basis. Civil investigative demands for documents have already been issued in an effort to have enforcement penalties. In one case, Amex agreed to pay $112.5 million to settle claims made by regulators. These claims included violation of consumer safeguards. CFPB aimed their claims at the company’s practice of attempting to collect debts by falsely implying that a report that the debt had been paid would improve the debtors credit score.

The CFPB and the FTC have created a joint group to examine how the government should regulate the debt collection industry. The Fair Debt Collection Practices Act (“FDCPA”) was created in a time when the debt buying industry did not exist in any significant way. It has been suggested that either the FDCPA needs to be modernized or the CFPB needs to interpret the statute in a way that applies to today’s debt collection practices. 

For example, the CFPB needs to find a way to limit the use of electronic tools by debt collectors since some of these tools are not completely private and the FDCPA prohibits debt collectors from disclosing information about debts to third parties. Such electronic tools could include Facebook, other social media, and a person’s work e-mail address.

We understand that the laws here can be rather complex and difficult to understand. So if you or a loved one may have been the victim of aggressive actions by a debt collector, please contact us immediately. In addition, review the FDCPA Rules You Must Be Aware Of to help protect yourself from further actions and to share with family and friends.

We have been successfully representing those abused and taken advantage of by debt collectors for years, and have a long list of successful stories to share with you. We offer a FREE CASE REVIEW for you to assess whether we can assist you with your matter. Please do not hesitate to contact us toll free at 1-800-875-3666 if you prefer to talk to a trained professional over the phone instead, or of course, visit our website athttp://www.krohnandmoss.com/.