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To Tweet, or Not to Tweet? Risks Associated With Using Social Media to Collect Debts

Friday, April 8, 2016   (0 Comments)
Posted by: Anthony DiResta and Brian Goodrich
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Communicating with consumers through social media or text messages is allowed under the Fair Debt Collection Practices Act (FDCPA); but, according to a recent blog post from the Federal Trade Commission (FTC), debt collectors should take extra precautions to maintain compliance with the law if those methods are used.  On March 28, 2016, FTC Attorney Colin Hector issued a blog post aimed at debt collectors that use social media and text messages during collection.  In the blog, Mr. Hector indicated that may of the long-standing protections afforded to consumers through the FDCPA remain applicable to the collection of debts through the use of social media, such as Facebook and Twitter, as well as text messages.  

While the FDCPA specifically addresses written and telephone communications, it has not been amended to keep up with developments in technology.  Use of new technology thus presents new compliance risks; posts on social media platforms, such as Facebook and Twitter, for example, are public and may reveal the existence of a borrower's debt to one, or millions, of third parties with the click of a button.  Debt collectors currently using social media should heed the guidance provided by the FTC:

 

  • A debt collector may not disclose the existence of a debt to a third party.   Collectors should refrain from posting on public, online platforms.  Collectors should also refrain from contacting a borrower's "friends" or "connections" on social media during skip-tracing efforts in order to get information about a borrower.  The FTC blog post cited a 2011 FTC staff letter that explained that sending a third party a "friend request" on Facebook, in the FTC's opinion, may violate the FDCPA if the contact reveals the existence of a debt.
  • A debt collector may not make false statements or use false pretenses on social media.  The FTC warned collectors not to use text messages designed to look like fraud alerts to get consumers to contact collectors.  The FTC also admonished that collectors should not create false profiles on social media platforms in an attempt to get information about borrowers.
  • A debt collector must disclose they are a debt collector trying to collect on a debt. Whether it is a text, or a private message on a social media platform, collectors must still disclose that they are a collector, and that any information provided will be obtained for that purpose.
  • Don't use social media to impose fees that are not authorized by the FDCPA.

 

Engaging in the acts listed above may not only run afoul of the FTC's guidance and the FDCPA; it may also invite the attention of the Consumer Financial Protection Bureau (CFPB).  According to a recent CFPB press release, consumer complaints about debt collection have narrowly edged out those related to mortgages for the top spot on the CFPB's consumer complaint database.  Collectors can expect the CFPB to continue its scrutiny of the industry.

 





 


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