Debt Collectors May Start Using Social Media

This is a guest post by Sarah Waters. You can also write a guest article about social media.

Consumers who feel like they already hear enough from debt collectors are unlikely to be thrilled about the latest advance in collection techniques. The Federal Trade Commission has been hearing a number of complaints from consumers who say that collectors have been pursuing them on social networking sites like Facebook, Twitter, or Google+. For instance, a collector may “friend” a borrower on Facebook using a fictitious profile. Once they have access to the consumer’s profile, the collector may leave messages or wall posts in an attempt to collect a debt.

Social Media is New Territory

Many collection agencies have likely been forced to resort to this tactic as consumers increasingly avoid answering their calls. Consumers who have fallen victim to these practices complain that the new method is an invasion of privacy. So far, there are no laws regulating how collection agencies use social media to pursue indebted borrowers. As long as there are no regulations, social media will likely continue to have a “wild west” situation, with collectors pursuing debtors any way they can. One way consumers can make sure to protect themselves online is to never add anyone they don’t know. 

Getting a Loan From a Bank or an Alternative

Consumers who need to get caught up on debts often find themselves taking out loans for debt management purposes -- taking on another debt to pay one you already have. Typically, they’ll visit their financial institution, like a bank or credit union, and apply for a loan. Unfortunately, this strategy doesn’t often work for people who have financial issues. Banks are generally hesitant to lend to people with poor credit histories, and they’ve become even more so in recent years due to the recession. For this reason, the past few years have seen a boom in alternative financial institutions that lend to a wide variety of individuals based on factors other than their credit scores.

What's an Alternative Loan Source?

These lenders offer a wide variety of different loans based on different criteria. Bridge loans are typically offered only to borrowers who have large amounts of money coming to them in the immediate future. Payday loans allow borrowers to take out a loan to be paid back when they get their next paycheck. This means that payday loans usually require proof of income. Finally, car title loans involve using a car title as collateral to obtain a loan based on the car’s market vehicle. Short term loans can sometimes come with slightly higher interest rates than loans offered by banks. However, as long as they’re used responsibly, short term loans can be a helpful tool for debt management.

The Liquid Philosophy on Debt

When you take a stand to save up before you buy, you won't have to worry about all this nonsense. Life should be about connecting with friends and family, not cowering under financial stress.

Would a debt collector contacting you on Facebook freak you out enough to make a change?

Sarah Waters lives in Los Angeles and blogs about financial news, consumer tips, and small business ideas. Her blog posts appear regularly on the Smart Money Blog produced by A Car Title Loan Co.

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