An attorney at the Federal Trade Commission posted a blog on the agency’s website yesterday, entitled “Debt collectors: You may “like” social media and texts, but are you complying with the law?”
What follows is the attorney saying that the Fair Debt Collection Practices Act does not forbid using text messages or social media —
The short answer is that the Fair Debt Collection Practices Act doesn’t prohibit collectors from using texts or social media.
but then lists all the ways that the law makes it nearly impossible to use those methods of communication to contact debtors. The agency does note that those agencies that try to use social media or text messaging to contact debtors face “particular compliance challenges.”
The post makes it clear that the only form of communication that is prohibited outright is postcards, because those reveal the existence of a debt to anyone who sees them.
The first point that the article makes is that if a collection agency is using social media or text messaging – or any form of communication for that matter – that deception or false pretense can not be used to try and make contact. Are there any legitimate collection agencies that use deception or false pretense to contact borrowers? If they do, they likely won’t for very long before the lawsuits start coming and the regulators start pounding on their door.
FTC cases have challenged deceptive “door openers” – texts that used false pretenses to get consumers to call the collector back. For example, defendants in the Messaging for Money law enforcement sweep sent texts like this:
YOUR PAYMENT DECLINED WITH CARD ****-****-****-5463
. . . CALL 866.256.2117 IMMEDIATELY.
To reasonable consumers, that could look like a fraud alert from their credit card company. In fact, it was a sneaky – and illegal – way for collectors to get a response from the person they claimed owed money. Similarly, a friend request that doesn’t disclose that the “friend” reaching out to the consumer is really a debt collector would run afoul of the law. Debt collectors also shouldn’t use social media to deceive third parties. A collector can’t obtain location information about a consumer by using false pretenses to approach a friend or coworker – e.g., by using a fake Facebook account to send a friend request to a purported debtor’s social connections in the hope of uncovering address or asset information.
Collectors must also provide “appropriate disclosures,” according to the FTC. That means debt collectors must identify themselves as a debt collector and the communication is an attempt to collect a debt. How does one do that in a text message or Facebook friend request? Even an FTC settlement with a collection agency has noted that there is no “that’s tough to do in a text” defense.
When trying to contact a debtor, collectors can not reveal the existence of a debt to a third party, under the FDPCA. How do you avoid that when you are sending a text message? Or if you post on someone’s Facebook wall?
An FTC staff letter closing an investigation of a debt collection attorney illustrates that point. According to the letter, “[D]ebt collectors may violate the FDCPA and/or the FTC Act by . . . requesting to join debtors’ social media networks (for example, by sending a ‘friend request’ on Facebook).” Because it appeared to be an isolated incident for the purpose of collecting a commercial debt – activity that falls outside the FDCPA – that matter was closed. But prudent members of the industry take it as a lesson learned.
The post even goes as far as to question the legality of whether collectors should include helpful information and resources on their websites and in their social media activities.
One final note about your own online or social media presence. Some industry members use their websites and social media pages to offer helpful information for consumers – for example, a breakdown of costs or an easier way to dispute a debt. So while we’re on the subject of new forms of communication, consider whether lawfully using these platforms to offer general information can benefit both your company and consumers.
Does any legitimate collector walk away from this post with any new information, or any insights into how they can try and collect using communication methods that have been around for a decade or more? Or, does this post stand as further evidence of how the FDCPA restricts the use of modern day technology and refuses to allow the collections industry out of the stone ages?