Online debt collection techniques

Comment by Jack Gordon on August 23, 2009 at 7:21am

I have fired collectors who contacted debtors over the social media sites. The lure is strong, especially when payments are down. We did use email, but only when the debtor requested it and put that explicitly in writing.

I would be shocked if FDCPA were to be amended in a positive way allowing freer contact through these methods. It seems much more likely they will be pulled further out of reach.

While I never used one, I love the concept of virtual collectors. The ones that can operate via web or phone and negotiate within set parameters, then accept payment on the spot.

Comment by Michelle Dunn on August 23, 2009 at 7:42am

I believe that at the round table the FTC held they did not find that there was any need to address specifically, email as a means of contact with a debtor. The FTC stated that they are not aware of any information demonstrating that 3rd parties have greater access to debt collection messages conveyed through online methods rather than traditional means and the FTC does not believe that the imposition of any special limitations on a debt collectors use of email and instant messages is justified BUT they do feel that if a third party becomes aware of a debt through any method, such as email or instant messaging, the collector is and will be held liable for violating Section 805(b) of the FDCPA.
When they say email, they do not mean email through a social media website, which in my opinion should be off limits since there is not way to verify that it is secure and confidential.

Comment by BJM on August 24, 2009 at 11:29am

Jack, I'd be pleased to discuss with your virtual collection interest to show some things we are doing today with agency partners. Our IOUSOS online bill clearinghouse platform, previewed at www.iousos.com contains the concepts you mention as effective, and we are seeing strong opportunities, particularly for low balance accounts.

Comment by Bobby Jones on August 28, 2009 at 3:27pm

We're also seeing greater acceptance for our online debt negotiation product, as well as our other electronic bill presentment and electronic payment products in general. The challenge agencies face is how to reach the debtor to drive them to the online presence in the first place. It remains to be seen how regulators will eventually rule on the legalities of text messaging and other new technologies, but I think they are moving in the direction of more regulation and consumer protection, not less. An example would be the recent move to ban all automated phone messages for telemarketers. It's only a matter of time before they will be banned for collectors as well.

Comment by Catherine Sherwood on September 16, 2009 at 6:49pm

AS someone hwo helped found and launch online debt collections technology (Online Resources' Virtual Collection Agent) I am clearly a proponent of using the internet to collect from consumers. Indeed, a survey that I had commissioned a few years ago showed a strong acceptance by debtors for settling their debt online. However, the attraction was convenience and - basically - the lack of embarrassment when a real person was left out of the loop. I am concerned that social media sites are not the place to do collections directly. It is tough to keep a real audit trial of communications and I think that place like Facebook would create policies to virutally stamp put that practice. They are very protective of the environment they have created. All that said, I think that the social media is a really good place to connect with your clients if you are an agency or debt buyer. I just recently reviewed the Web2.0 / Social Media features of American Debt Recovery's site and was very impressed. My background is in marketing and social media, so I am biased about this- but I believe that what ADR is doing creates a real competive edge. http://CatherineSherwood.com

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