Debt collectors now lurk as Facebook friends
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Kathryn Haralson had already fielded calls from debt collectors at her home and work. They even phoned her daughter at college.
So when Haralson, 47, logged into her Facebook account one day, she was surprised by an unwelcome inbox message: a request to call "Mr Rice" about her debt.
"It's not like they needed to go on Facebook to find me," Haralson said. "I was in contact with them all the time. That crossed the line."
Federal regulators could wind up agreeing with Haralson as the US Consumer Financial Protection Bureau and Federal Trade Commission examine how debt collectors use social media websites like those run by Facebook and Twitter to contact potential debtors.
US regulators are mulling a series of actions in 2013 as they impose comprehensive federal oversight for the first time over the debt collection industry, which generated 180,000 consumer complaints to the FTC in 2011. In the 2010 Dodd-Frank Act, the CFPB gained new powers over debt collectors that no other federal agency ever had.
Richard Cordray, the CFPB director, has made debt collection a priority for the agency because about 30 million consumers — "nearly one out of every 10 Americans" — have accounts in collection totalling $1,500 on average, he said in an October 24 speech. "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," Cordray said.
Regulations would affect credit-card issuers like Capital One Financial and JPMorgan, who also face supervision over how they handle debtors. The CFPB sent a signal of its intent in October when it announced a $112.5 million settlement with American Express partly over claims of improper debt collection practices.