UK debt collectors banned from using social media for collection purposes

Regulators in the United Kingdom are cracking down on certain debt collection methods. The Office of Fair Trading reported last week it is prohibiting the use of social networking sites such as Facebook and Twitter in collecting debts. The OFT updated its Debt Collection Guidance to prevent people suffering the "stress and embarrassment" of having their money concerns made public. "It's unfair and improper and it makes that private correspondence public," said a spokesman for the OFT, according to the UK Press Association. "It causes stress and embarrassment to the debtor. It is not good business practice to do that." However, the group acknowledged, such incidents have been rare, adding that they "are future-proofing the guidance." Banks, law firms, tracing agents and traditional debt collectors are all expected to adhere to the rule. In the U.S., regulators and judicial officials have also been cracking down on debt collection practices. Since the recession began, activity in the sector has spiked, drawing the ire of many consumer advocates and legislative figures as well.