Beyond Friend Requests: How Social Media Is Used For Debt Collection

If you owe money and collection agencies are chasing you, be aware that there is a whole new wrinkle in the debt collection business: Social media, as in your personal Facebook and Twitter accounts.  Increasingly, collection agencies are using these goldmines of personal information to track down their debtors and find out everything they need to use in their efforts to collect on a debt.

Giving It All Away

People are increasingly aware of the privacy concerns associated with social media platforms; you are basically giving away all of your personal information, which can be collated and connected with other pieces of data to create an incredibly accurate picture of your life.

Collection agencies are first using social media to locate their debtors, which is sometimes the most difficult aspect of collecting on a debt.  They are even creating fake Facebook profiles and friending their targets in order to monitor their activities and location.  Many people are not aware of how much information they make available on social media.

One of the most common strategies for collection agencies and collection lawyers is to watch for inconsistencies when a debtor has claimed they lack the funds to pay their debt and yet posts in public about spending money on shopping, vacations, or other big-ticket purchases.  When they catch someone in this sort of lies, a lawsuit is almost certain to follow – and they already have the evidence they need.

The Rules Still Apply

However, there are limits to what collection agencies can do on social media.  For example, they are not allowed to harass debtors or publicly post their debts or demands that they pay their debts.  Most of the rules that apply to phone interaction also apply to social media, although the laws are in dire need of updating to reflect the new social media reality.

Consumers being pursued by collection agencies can help protect themselves by being very careful about the information they offer to the public on social media.

Are collection agencies allowed to use my social media accounts in their collection efforts?

Skip Tracing Made Easy Through Social Media

With personal debt increasing, there are more and more employment options for skip tracers.  Skip tracers are responsible for finding missing people.  The top reason people voluntarily go missing is because of debt.  In an effort to get away from debt, the debtor will dodge the collectors by up and leaving their debt behind.

Skip tracing used to be an impossible job.  The only way to find people used to be through word of mouth.  The skip tracer would have to go to the person’s places of employment, and even occasionally search for family members to ask if they have seen the skipper.  This is no longer the case.

Finding a debt skipper is becoming much easier with the rise of the internet and social media.  By using such websites as Facebook, Twitter, and LinkedIn, skip tracers are able to get a much better idea about the whereabouts of their prospects.  These days a skip tracer’s job can be as easy as just doing a simple Google search on the debtor.  With that being said, it’s important to note that skip tracers are NOT legally permitted to contact the debtor through social media means. 

If a debtor’s Facebook profile is found, it is typically quite simple to determine their location.  There may be clues left by looking at the status they have posted.  Even if the debtor didn’t post a status specifically pointing out their location, skip tracers can also look through recent pictures to get an idea of their location. 

Facebook has also added a feature that shows the actual city that the person was in when they posted a status.  If the debtor has this feature enabled on their Facebook, it makes the job of a skip tracer all the more easier.  Luckily we are in the technology age, and with this comes the ability to easily track down those that are indebted to us.  

The Amazing New Secret of the Debt Buying Industry

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Like all high-stakes industries, the debt buying industry is constantly evolving. Debt buying and collections agencies consistently update their strategies and tactics to further increase the chances of receiving money from debtors. For example, modern debt buyers have learned how to use social networking websites like Facebook and Twitter to remain in contact with debtors, to learn about a debtor’s lifestyle, and to develop relationships with debtors which lead to payment.

Not only are debt buyers using social media websites to perform their work better, they are also using these websites to determine whether a prospect is likely to pay off their debts in the first place.

One of the secrets to effective debt collection lies in being able to distinguish between debtors who are likely to pay off their debts, and debtors who are unlikely to honor their loan’s repayment terms and conditions. Determining whether a debtor is likely to pay back their account balance or not depends on a number of criteria every good collection agency will consider before taking on a case.

For example, an individual who has more than $75,000 in debt, an individual who is in jail, or an individual with no cash-flow and no prospect for building cash-flow is unlikely to pay back their debt, no matter what. On the other hand an individual who lives large, who clearly spends a lot of money on a daily basis, who has a relatively small level of debt, and who has plenty of personal assets and connections with other people who have personal assets, is a prime candidate for effective collections. Social networking and social media sites offer an exceptional way to evaluate these criteria.

Debt Collection and Social Media

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No one can dispute that the economy is heavily reliant on the debt collection industry. The economy won’t be in the pink if many businesses won’t hinge on the repayment of credit to pay for facilities, salaries, taxes, and other expenses. That’s why when times get harder, debt collectors become more aggressive in pursuing debtors. These days, creditors and collectors turn to the new means of reaching debtors—through Social Media. 

What really is Social Media?

As Wikipedia puts it, “Social Media refers to the use of web-based and mobile technologies to turn communication into an interactive dialogue.” Social networking sites such as Facebook, Twitter and LinkedIn commonly identify Social Media. However, other forms such as blogs, podcasts, pictures, videos, and social bookmarking also fall under the broad umbrella of Social Media.  

According to a report by Pew Internet & American Life Project, 65% of adult users are into social networking sites. Because of the high penetration rate, the drive of falling back on social media is too intense to ignore. 

But what can debt collectors really do in social media?

There are actually three reasons you may consider before taking the plunge into social media: to locate, communicate, and even accept payments from consumers.  A simple search on these platforms could yield vital information such as the current location and employment details of the debtor. The use of the “Big Three” in social media such as Facebook, Twitter and LinkedIn depends on the type of debt. Facebook appeals more to the younger segment, while LinkedIn is the working class’ hangout.

Downbeat consumers

Not everyone agrees that consumers should be reached through social media. Consumers and consumer protection groups alike are wary about the increasing number of collectors who turn to social media. 

However, nothing can really stop you from using social media in your collection efforts, not even the Fair Debt Collection Practices Act which was passed in 1978. Making false statements and harassment are forbidden though. You cannot just claim to be someone else when connecting to consumers online. Just don’t cross the line.

In line with this, the Federal Trade Commission is soon to release guidelines that will tell you about the dos and don’ts when it comes to the use of social media. On the other hand, The Association of Credit and Collection Professionals has already outlined the blueprint for Modernizing Debt Collection that proposes the removal of barriers to effective communications between consumers and debt collectors. 

More than just collections

Using more tools is essential for the debt collection industry. But more than successfully collecting what businesses rightfully own, social media use can be your own way of making PR work. Quite a few times you would find a bunch of negative tweets on Twitter. Although you don’t really need to engage consumers, responding to one or two of their questions or bad comments can really make a difference. 

Reaching consumers through social media will also make communication more effective. It will allow consumers to know the accurate details about their debts and their options directly and fast. This could even help both parties reach agreements without having to go through tedious and more costly settlements.