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Federal Trade Commission going after social media use in debt collection

Mar 15, 2011 Kyle Duncan

Debt collectors have used social media sites as a key instrument in their practices, but the Federal Trade Commission wants to see that practice limited in the name of privacy, PC World magazine reports. According to the magazine, the FTC is increasingly concerned that debt collection through social media sites could lead to abuse of consumers. On April 28, the agency will host a seminar in Washington, D.C., to highlight the need to curb debt collectors' use of sites like Facebook and Twitter.
 "The workshop will provide an opportunity for government regulators, industry members, technologists, consumer advocates and researchers to discuss the costs and benefits of these technologies for debt collectors and consumers," the agency said in a statement. The FTC will also discuss how the use of social media in debt collection needs to follow current laws, including the Fair Debt Collection Practices Act and Section 5 of the FTC Act. Additionally, the FTC will detail concerns often expressed by consumers who were tracked by debt collectors through social media platforms. "Communication technologies, in particular, have spurred profound changes in this industry. Debt collectors no longer must use individually-typed letters and manually dialed telephone calls to contact consumers. Collectors now are able to easily and relatively inexpensively mass-produce and send letters to debtors," the agency stated. Complaints stemming from debt collecting represented a significant portion of the consumer complaints received by the FTC in 2009. According to an agency report, the FTC received approximately 119,000 complaints regarding third-party debt collectors, representing 22.8 percent of the total complaints filed. The FTC is not condoning the complete ban of social media use by debt collectors. According to PC World, the FTC has regarded the use of emerging technologies as fair game for the industry. However, the agency wants to ensure that the central guidelines of the Fair Debt Collection Practices Act are being upheld and that any abuse is nullified. PC World's report comes amidst news that Facebook is taking new steps to improve its privacy policy language, according to the Austin American-Statesman. The paper details a new plan from the social media giant that hopes to put its privacy policy in "plain-spoken English." The FTC is also monitoring Facebook's privacy overhaul, so consumers are more aware of their options.