Consumer rights advocates have worked hard in recent years to protect debtors from unfair and unnecessary debt collection practices. With the federal Fair Debt Collection Practices Act (FDCPA) and state regulations monitoring collection practices, one might assume that these companies would avoid engaging in abusive tactics. Sadly, as many Texas residents know, they still do.
The law sets limits on what debt collection agencies can say when they contact a debtor about payment. It also limits when they can call, how they often they can call, and who they can contact about the situation. While some of the requirements are straightforward, sometime these companies push the limits or pretend that the law does not apply to what they are doing.
The Law in the Online Age
Part of the problem is that the FDCPA was first passed by Congress in the late 1970s. The world has changed a bit since then, resulting in some confusion about how the rules apply to concepts and tools not in existence at that time. For example, what about Facebook and Twitter?
As a new Business Week story discusses, some debt collection agencies are using the social media site to get to consumers. In many cases the companies are using the websites to send messages to individuals who they are already in contact with by phone and mail. In other words, the Facebook messages and Twitter comments are being made as just another nudge to seemingly frustrate residents into meeting their demands. The conduct is drawing in federal regulators who are looking at the actions of these companies to determine what should be done, if anything.
New U.S. Consumer Finance Protection Bureau Rules
In 2010 the U.S. Consumer Finance Protection Bureau (CFPB) was given new oversight powers by Congress to monitor the practices of debt collection agencies. This year the agency is poised to use that power to enact new rules, some of which may impact how these companies can use social media sites like Facebook, Twitter, LinkedIn, Google Plus, and others.
In discussing the agency’s focus on the industry in general, the CFPB director recently explained, “We will be using both our supervision authority and our enforcement authority to oversee the market and go after bad actors who flout the law.”
The largest debt collection companies, like Encore Group and Asta Funding, have already indicated that they expect changes to be made as a result of amped up consumer protection efforts. When it comes to use of social media sites for collection purposes the debt collection trade association ACA International has even urged members not to use the sites, because they acknowledge that doing so may violate current law.
It will be important for those working on debt collection issues to follow the development of these new rules closely. Consumers who have faced aggressive collection practices should be sure to contact a debt collection lawyer for advice on whether a company may have violated the law and what can be done to hold them accountable for their conduct.