Debt Collectors Attempt To Shame Consumers Into Paying Debts By Adding Facebook to Their Arsenal of Deceptive Collection Tactics
Online scams are nothing new to internet users, but the next person you friend on Facebook may be no friend at all. It may be a debt collector using the access you grant them for a variety of undesirable or unlawful purposes such as posting defaming information on your wall to shame you into paying a debt you may or may not owe or to embarrass you in front of friends, believing that you will pay to end it.
Recently, Bloomberg reported the story of Kathryn Haralson who had been dealing with excessive calls from debt collectors at her home and work, and even went so far as to phone her daughter at college.
One day Haralson logged into her Facebook account, and was greeted by an unwelcome inbox message: a request to call “Mr. Rice” about her debt thought the debt collector was already in constant communication with her. This crossed the line.
As a result of this and thousands of similar stories getting the attention of federal regulators, the U.S. Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) are now examining how debt collectors use social media websites including those run by Facebook Inc. and Twitter Inc. to contact potential debtors.
U.S. regulators are considering a series of actions in 2013 as they impose comprehensive federal oversight for the first time over the debt collection industry, which generated more than 180,000 consumer complaints to the FTC in 2011 after the passage in 2010 of the Dodd-Frank Act, when the CFPB gained new power over debt collectors that no prior federal agency ever had.
Richard Cordray, the CFPB director, has made debt collection a priority for the agency, pledging to use supervision and enforcement authority to oversee the industry and go after the worst offending debt collectors that flagrantly defy the law.
The CFPB, shares jurisdiction over debt collection with the FTC and will begin taking complaints about the industry in the second quarter of 2013, according to sources.
When a CFPB complaint is filed, it triggers data collection which can track similar practices by companies, identifying the worst offenders and leading to potential enforcement action. Finding solutions for individual consumers is not the role of the CFPB as currently organized.
The CFPB may also take enforcement action against the debt-collection industry, something the FTC does from time to time and has already requested civil investigative materials from several companies, a step that can lead to enforcement penalties, according to two insiders.
While all this is generally positive news for consumer, until the federal government tightens regulations on debt collectors to prevent social media misuse, exploiting its power for purposes nobody intended, online devotees are well advised that sites like Facebook and Twitter could present a source of embarrassment and harassment until the CFPB takes a bigger role in protecting consumers from this type of abuse.