Federal regulators in the US are weighing new rules on how debt collectors may use social media websites like Facebook and Twitter to contact potential debtors.
In the latest twist on how social media uses have been expanding, some debt collectors in the US are turning to social media platforms as another means of door-jamming clients who fall behind on payments.
New rules would become part of an overall series of actions contemplated by U.S. regulators 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. New laws in 2010 created extensive oversight powers over debt collectors that no other federal agency ever had.
Recently, Mr. Richard Cordray, director of the Consumer Financial Protection Bureau said that he will make 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.
The new laws will also impact credit card issuers like American Express, Capital One and JP Morgan, who also face tougher regulation over how they handle debtors. In October, the CFPB agreed a $112.5 million settlement with American Express over improper debt collection practices.
Debt buyers (these are specialist firms that purchase old debts at a significant discount, perhaps as little as 10 cents for every dollar owed who them work to claim back as much of the original debt as possible) are also facing the first-ever federal oversight of their business.
As new debt oversight rules and regulations take hold across the US and the EU, on December 26th, 2012, the President of Ireland signed new laws on personal insolvency. However, those laws have yet to come into force, which is not expected to take place before April or May 2013.
In the meantime, Ireland continues to have one of the most severe and outdated personal insolvency regimes in the developed world.