• 03
  • August
    2011

Traditionally, the law has been slow to catch up to changes in technology, and the rapid spread of social media websites like Facebook has raised serious questions about the laws governing commercial debt collections.

Commercial collection efforts are an important aspect of business in the 21st century, and social media websites have become an important way for people to interact with each other. However, the way debt collectors can interact with debtors on social media sites has been a source of great debate. Creditors can face legal liability if they violate state and federal laws, but many feel that collections laws are very unclear when applied to social media sites.

In fact, the Federal Trade Commission (FTC) organized a panel to study this issue this spring. However, the Commission is still wading through the public comments it received from businesses and consumers on how social media can be used for collections purposes.

Presently, the Fair Debt Collection Practices Act (FDCPA) governs the way collectors can communicate with debtors. However, the FDCPA was written in the 1970s when Facebook was not visible on the horizon.

The FDCPA has provisions regarding the use of mail and postcards, but it has nothing to say about posting on a debtor's Facebook wall. Many consumer groups and some industry groups would like the FTC to set up new and clear rules about how debt collectors can use social media sites.

Some collections industry representatives would prefer to analyze social media contacts through the lens of the FDCPA instead of establishing new rules. For example, the FDCPA prohibits sending collections postcards because a postcard is a public communication. Some believe that this rule could be applied to posting a collections message on a public Facebook wall.

Presently, there is not a broad consensus on how debt collections laws apply on social media websites, and many collectors have questions about how these laws apply in their situations. If you have questions about commercial collections law, an experienced collections attorney can help.

Source: CreditCards.com, "Collectors' use of social media raises concerns," Tamara E. Holmes, 2 Aug 2011