flickr photo from benymarc

This is a guest blog entry from Karin Gerber.

You thought it was safe to post online about the new electronic toy you just bought, but keep in mind that more than your family and friends can see your newly purchased gadget.  Debt collectors can also find you on all of these social networking websites like Facebook, Twitter, and LinkedIn.  But do they have a right to?  That’s seems like a grey area, but according to Facebook’s policies, no they don’t.

Facebook policies prohibit any kind of threatening, intimidating, or hateful contact from one user to another.  We encourage people to report such behavior to us, only accept friend requests from people that they know, and use privacy settings and our blocking feature to prevent unwanted contact.  (via The Atlantic)

A Florida woman is now suing a debt collection company, MarkOne Financial, for contacting one of her friends through Facebook regarding an outstanding loan.  MarkOne states it’s within legal boundaries.

MarkOne’s policy is to only use Facebook® to locate customers when the customer has a fully public profile, and when the customer has not responded to MarkOne through conventional means.  (via The Atlantic)

Debt collectors usually contact family members and friends of debtors to locate them, and yes, that behavior is protected by law.  But even so, the Federal Trade Commission’s Fair Debt Collection Practices Act protects debtors against contact by embarrassing media.

According to David Cherner, legal counsel and director of state government affairs for the Association of Credit and Collection Professionals, the legal use of social media sites for debt collection is somewhat vague because the law was created long before social media sites were around.  Even so, the spirit of the law should still protect consumers.

Regardless of what kind of medium debt collectors use to reach consumers, Cherner said, they are prohibited from revealing information to third parties and cannot make false, deceptive, misleading or harassing representations.

When debt collectors use social media, they need to understand how they are going to be using it and for what purpose, he said, because it can be a risky practice.  (via ABC News)

Under most state laws, it’s illegal for a debt collection agency to publish or disclose any information about a debt in order to shame you into paying.  These same laws protect you from them harassing you directly.  If something like this happens to you and ends up hurting your reputation, there may be a recourse for you under states laws.  A woman from Michigan sued Assets Recovered and Advanced Equity for $25,000 because they posted her debt on her MySpace page.

Thanks in part to the post on her MySpace page, Paula Newland suffered “damage to her business and community reputation, extreme mental distress, aggravation, humiliation and embarrassment,” according to her complaint (.pdf) filed in Michigan state court.  (via Wired)

This is why it’s so important to keep as much personal information off of social networking websites as possible (for tips, see “What Not To Tell on Social Media Sites”).  Don’t advertise online what big purchases you made or what extravagant vacations you’re going on.  If you can afford a big screen TV or a trip to Maui, debt collectors will assume you can afford to pay your debt.  Make your profiles private and not public, and don’t include your salary or bonuses you make.  Don’t state where you work or who your employer is.  Even if you make your profile private, pretend that it’s public for ALL to see.

The less information you put out there, the better.  Less is more, because it’s better to be safe than sorry.