Social Media: Friend or Foe?

Facebook recently reported having 800 Million active users.¹

MySpace, although reportedly losing 10 million users between January and February 2011, still boasts 63 million registered users.²

LinkedIn reported crossing the 100 million registered users in March 2011.³

In the last two years, social networking websites have changed the way people interact on a day-to-day basis, both personally and professionally. However, as the popularity of this medium continues its tremendous growth, issues and pitfalls continue to grow as well. One such issue germane to the commercial/credit industry is the use of social media as a resource for locating debtors and gathering information and the potential of invading someone’s privacy or engaging in outright harassment.

Traditionally, credit grantors have used applications and credit bureau reports as the main source of information when an account goes into default. However, in the current economy, it is not uncommon to find out that the address provided on the application is no longer valid and the debtor no longer has a land line telephone. In addition, whereas online searchable databases often provide more updated information, there is still a certain amount of lag time on the information provided. On the other hand, Facebook, MySpace and LinkedIn can provide virtually up-to-the-minute information.

Mark Schiffman, a spokesperson for debt collectors’ trade association ACA International, says, “It’s just like debt collectors using the Yellow Pages. It’s another resource.”⁴ Not only can debt collectors find out if somebody is currently working, for example, but they can also gauge whether the person may have enough money to make repayments. If a debtor is bragging online about their latest sunshine holiday or fancy car, they may be giving the game away.

Process servers have used Facebook as well. “A couple weeks ago, I located a small-claims defendant based entirely on the information she’d provided on her Facebook profile. She had created an ‘Event’ and listed her home address as the venue. No, I didn’t crash the party. But if that address just so happened not to be her home, I would have. Because she had posted on Facebook she would be at that address on a certain day and time.”⁵

Although social media websites have become an additional resource for debt collection, utilization is not without its limitations. For example, in Beacham v. Mark One Financial, LLC, a Florida debtor alleges that Mark One engaged in harassment when a Mark One representative left postings on Beacham’s and Beacham’s friends Facebook walls asking Beacham to contact Mark One immediately. In Kirkpatrick v. Homeland Septic, LLC, Kirkpatrick alleges that Homeland Septic, a Texas company, used Facebook to send a message that a lien for 3 times the amount of the claim had been placed on Kirkpatrick’s property.⁶ Although both cases are still pending, it is clear that debt collectors are using social media for more than gathering information. Although critics assert that trolling for information through social media is an invasion of privacy or a violation of the terms and condition of usage, social media users control the privacy settings of their accounts, and who they allow to have access.

What you have posted for public consumption on your Facebook or MySpace page, such as contact information, is fair game for anyone to see and use. That being said, limitations do exist and debt collectors may not violate either state or federal law in contacting a debtor and may not harass a debtor by way of social media websites.