Seeking to catch up with changing technology, the nation's debt collectors want the laws changed to allow them to reach out and touch delinquents by e-mail, cell phone and text messages
On Monday, the Association of Credit and Collections Professionals introduced a blueprint for modernizing debt collections. Their goal: to increase collections by finding more ways to contact their targets.
The trade group wants to change laws including the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act, which were written before the age of robo-dialers, texts, Facebook and wide use of cell phones. Collectors use these methods to contact consumers now, but they may open themselves up to fines and sanctions under current laws.
"It seems like they are looking for looser laws when they refuse to adhere to the ones that are in place now," ays Billy Howard, head of the consumer protection department for law firm Morgan & Morgan. "The law's real simple and should it remain the same: do not harass people and/or their families or friends."
Essentially, he says, "They want the right to bombard people with emails and auto-dialers and we have a law in place right now to protect consumers against that type of conduct. The laws should not be expanded to give these guys greater protection."
In 2010, the Federal Trade commission saw complaints against collection agencies rise to more than 108,000, a sharp increase from the 69,000 consumer complaints.
On such complaint includes a client of Howard's, Melanie Beacham, a consumer who alleges harassment from MarkOne Financial after falling behind on a car payment.
"I went on a medical leave of absence and they were aware I was doing a leave of absence," says Beacham, who says she made payment arrangements with the collection agency prior to leave. When she fell behind by one payment, Beacham says, "they were calling me on my home phone, work phone, and cell phone. Eventually they began sending messages to Beacham and three family members using a social networking Web site.
"I was shocked. I was very upset," says Beacham. "I really felt helpless because I couldn't believe they reached out to people that weren't references on my account."
Last year, 21 percent of complaints filed with the FTC claimed that debt collectors used third parties for location information. It's one tactic that has driven consumer complaints to a high..
"I don't believe harassment drives any more return on collections than treating a consumer respectfully," says Mark Schiffman, ACA, Director of public affairs. While unable to comment on the case involving Beacham and MarkOne, Schiffman stated, "posting anything on someone's Facebook wall is a violation, and talking to someone [that is not the debtor] on Facebook violates the third party disclosure. Neither one is acceptable. It is unacceptable in any circumstance."
"Debt collectors can use social media just like they might use the yellow pages to find information about somebody," says Schiffman. "They can't do anything misleading. They can't friend people using fake identities. They can't post on your Facebook wall."
But some consumers aren't buying it.
"Debt collectors are often the scum of the earth. Several months ago I missed a credit card payment -- simply as a matter of oversight. Not only did they call me several times before the payment was made, they continued to call me after they received it. Needless to say, I shredded the credit card, paid the account in full and told them to close it," an ABCNews.com poster wrote.
A friendlier image of the debt collection agencies is presented on ACA International's Ask Doctor Debt, a consumer Web site for individuals. The Web site comes complete with a set of affirmations, quotes and a rotating queue of real people. Is it enough to change the image of debt collectors?
"I think the debt collection agency is a lot of things but charming is not one of them. And this five-point plan does not change that opinion," says Howard.
For Beacham, it's too little, too late.
"MarkOne was nice to me at first… and then they took U-turn. They made me feel like they wanted to help and in actuality they did not and they would do anything to get a payment," says Beacham.
Howard says he's seeing a trend as different companies use Facebook and other social media services to harass individuals, family and friends.
"They need to clean up their act but they're not doing it," says Howard. Which won't happen until "they start 1. Asking consumers nicely to pay their debts. 2.they start only asking consumers to pay money when they owe it. 3. They stop their deceptive ways and start collecting only the amount that is owed as opposed to their "miscellaneous penalties and fees."