The Federal Trade Commission (FTC) recently published a reminder to debt collectors of the Fair Debt Collection Practices Act (FDCPA) compliance risks that are created by the use of social media or text messages in connection with debt collection efforts.
The FTC highlights the following FDCPA prohibitions and requirements and provides examples of how the use of social media or text messages can violate such prohibitions or requirement:
Collectors cannot collect charges unless the charge is expressly authorized by the agreement creating the debt or permitted by law. The FTC notes that debt collectors cannot use social media or text messages to collect illegal charges.
The FTC also observes that some industry members use their websites and social media pages ''to offer helpful information for consumers'' and calls on the industry to ''consider whether lawfully using these platforms to offer general information can benefit both your company and consumers.''
In December 2013, the Federal Financial Institutions Examination Council, whose members include the Consumer Financial Protection Bureau (CFPB), issued final supervisory guidance ''Social Media: Consumer Compliance Risk Management Guidance.'' The Guidance was intended to help financial institutions manage the risks of interacting with consumers through social media. Among the topics discussed in the Guidance was how the use of social media can run afoul of the FDCPA. In November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking (ANPR) on debt collection. In response to the ANPR, industry commenters have asked the CFPB to provide exceptions and/or guidance as to how to give FDCPA disclosures with text messages.
While not mentioned in the FTC's blog, the use of text messages by debt collectors also raises Telephone Consumer Protection Act (TCPA) compliance issues. In particular, the TCPA requires ''prior express consent'' for prerecorded or autodialed collection calls, which include text messages, to a debtor's cell phone.