Lindsey Ellis had received phone calls from a debt collector when one of her acquaintances and a distant family member reported getting peculiar messages on Facebook.
“Hey Girl,” began a private message sent by Erika Edington Brinkley to Ellis’s cousin’s ex-girlfriend and her brother-in-law’s sister. Brinkley’s profile identified her as a TitleMax employee based in Alabama. “I’m looking for her veh[icle]. She’s been hiding it for some months, never paid on it.”
Ellis had taken out a loan from the title lending business TitleMax in April 2014 in order to pay $2,500 for a new transmission. TitleMax specializes in auto-title loans, whereby customers borrow cash against the value of their existing car. To people for whom traditional credit isn’t an option–borrowers with bad credit, little savings, or few family resources–these loans offer an easy alternative. But consumer advocates say that title loans, like payday loans, tend to carry a high price: astronomical interest rates, sometimes reaching into the triple digits.
At the time of the Facebook messages, Ellis was two weeks late on a payment for her loan. The company “seemed to be reputable,” she says, but once the messages began, it had crossed a line. “I said, ‘This is bull crap for her to breach my privacy like that.’”
Ellis complained to TitleMax management, and a representative told her that Brinkley had broken company policy in her use of social media. Brinkley, who still works at TitleMax, declined to comment, and referred me to TitleMax’s corporate offices. The company failed to respond to my inquiry regarding their social media policy.
The incident points to a larger trend in the debt collection industry, consumer advocates say. As landlines die and a simple screen tap can deny any unwanted phone call, debt collectors have started relying on new modes of communication to contact debtors, from text messages to social media sites. In the process, they may also be breaking consumer protection laws.
While Federal Trade Commission regulations don’t explicitly refer to social media, in 2011, the FTC did address how text messaging can and can’t be used to lawfully collect debts. Regardless of the medium, however, it’s unlawful for the collector to harass the debtor or violate his or her privacy, by, for instance, communicating with relatives and acquaintances.
In 2013, Archie Donovan, a California-based debt collector, was forced to pay $1 million in a settlement for collecting on debts in an unlawful manner. His companies’ offenses included sending text messages and making phone calls in which the callers failed to disclose that they were debt collectors, threatening to sue and garnish wages from the debtors they were contacting, and revealing individuals’ debts to friends, families, and coworkers.
“The law does not allow debt collectors to disclose publicly someone’s private debts, because doing so could endanger their jobs or reputations,” explained the FTC in a statement about the case. The current rules are broad enough to cover old and new media. “The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you–regardless of how they communicate with you,” explained Frank Dorman of the FTC Office of Public Affairs.
“I’ve had a lot of cases where debt collectors have contacted people through social media,” says Billy Howard, a Florida attorney specializing in consumer protection and debt collection harassment. Still, because of confidentiality clauses, it can be hard to know how common these cases are. “Unfortunately when I settle these cases, these defendants want confidentialities. My clients usually get paid a little extra for their silence.”
In 2010, Howard represented Melanie Beacham, a St. Petersburg, Florida, woman, in a suit against MarkOne Financial LLC., who, like Ellis, was shocked by the company’s tactics: One debt collector contacted her friends and relatives through Facebook about a $362 debt she owed.
A Florida judge ruled the collection agency shouldn’t use Facebook or any other social media to contact Beacham, and they should refrain from contacting her friends and family members on Facebook. According to details of the settlement, neither Beacham nor Howard can directly comment on the case. “Debt collectors are so scared that their tactics will get out that they pay big bucks to silence people,” says Howard.
Even in the social media age, debt collectors are relying on old strategies. “One of the oldest tricks in the book is for a debt collector to contact your family. I think it’s one of the most successful tactics because it embarrasses people,” explained Howard. “A lot of consumers don’t know their rights, and that that’s illegal, and they don’t know how to find a lawyer.”
After the Facebook messages and a phone call with TitleMax, Ellis initially reached out to a local lawyer, consumer credit attorney Judson Crump. But in the end, she tried to negotiate with TitleMax herself. While at first the manager was apologetic, Ellis says that eventually “he started ignoring me and took over a month to do anything about it.” In the end, all they offered was to waive the interest on her loan. “That was it. It was about $150 or $200. Not very much at all,” says Ellis. “They only gave me only 24 hours to make a decision, or they told me they were going to repo my vehicle.”
In addition to disclosing her debt to a third party, Ellis said they misrepresented the status of the debt. “They said that they’d been looking for me for months,” says Ellis. “We were only two weeks late on our payment.”
Both of these actions would be a clear violation of the Fair Debt Collection Practices Act if it had been a third-party collection agency collecting on behalf of a creditor, Crump says. But since TitleMax is itself the creditor, the same consumer protections traditionally don’t apply.
In 2013, however, the Consumer Financial Protection Bureau, an independent U.S. government agency that emerged in the wake of the foreclosure crisis, said it would be enforcing the same FDCPA regulations on companies like banks and payday lenders that collect on their own debts. Late that year, the FTC demonstrated its intentions when it announced a $112.5 million settlement with American Express Co., in part over claims of improper debt collection practices.
While the FDCPA was first established in 1977, a related law, the Federal Trade Commission (FTC) Act, dates back to 1914. “Section 5 of the FTC already prohibits unfair or deceptive debt collection practices used by creditors and other entities not covered by the FDCPA regulations,” explains FTC assistant director Christopher Koegel.
As first-party collection proliferates along with the rise of payday lenders and vehicle title loans, there is perhaps less industry awareness of what constitutes a violation. More traditional third-party collectors, on the other hand, seem to be more well-versed in the limitations stipulated by the FDCPA.
“The Fair Debt Collection Practices Act is the bible we have to live by as collectors,” says Ron Brown, the president and CEO of Collection Service International Group (CSI), a third-party debt collection agency that collects debts that range from $35 to $200 for fees for newspaper classified ads to six-figure corporate accounts. Even though the FDCPA is decades old, Brown insists the act establishes that collectors “can’t do anything that’s considered harassing. That’s a very big umbrella. They make that broad, so if there’s some kind of new social media or new vehicle to contact somebody, consumers still have that protection.”
Still, the nature of his work has changed alongside new technologies. For instance, the generation Brown calls “the cyberbabies” don’t have landlines and prefer texting to calling. “The conflict between the existing laws and the current technology has really made our job unclear,” says Brown.
Despite his apparent confusion, Brown is careful about how he contacts people. “If you text me right now and it comes up on my phone, it shows the message, and if my phone is lying on my desk and one of my coworkers sees, that’s giving disclosure to a disinterested third party, which is against the FDCPA. Same thing if you email me something. You can’t say, ‘Who is going to read my email?’ if it’s open on my computer.”
It may seem strange to think of a phone call or voice mail as more private as a text or email, but when it comes to telecommunications, the rules have developed to ensure that debt collectors make efforts not to disclose details of a debt to a third party. “We have to say, ‘This call is for John Doe. If you are not John Doe, you have 15 seconds to terminate this call. We have to wait 15 seconds, and then we say, ‘If you are John Doe we strongly suggest that you take this call off of speaker phone or move to a location where no one else can hear this call,’” explains Brown.
Brown says he would never contact someone on Facebook to collect a debt, but that doesn’t mean he doesn’t use social media when he’s investigating a person who owes one. “All the social media sites, we use those quite a bit to skip trace,” he says, using the industry term for tracking down a debtor when you don’t know their current address, phone number, or place of employment.
Brown won’t “friend” his debtors on Facebook, he says, because during any communication in connection to debt collection, the FDCPA requires that Brown give a Miranda-like warning, stating his purpose of contact. “I would have to tell you, I want to be your Facebook friend. This is an attempt to collect a debt, any information will be used for that purpose.”
Often the people that Brown says are “running and hiding” are wary about what information they make public to non-friends. But in those cases, he gets creative. “The other day I was trying to figure out where this woman works. And on her wall, her friend wrote, ‘See you at work on Monday.” Even though the woman in question had her employer info set to private, her friend’s public profile listed her workplace. “Now I know where she works,” says Brown.
While debt collectors are prohibited from harassing the debtors they pursue on social media, there are no rules prohibiting the use of social media for locating or learning about debtors.
Brown painted an unsettling picture of all the information we voluntarily divulge. “There are sites we can go out and buy data from. If you order pizza, they buy the pizza list, that has your address and phone number on it. That’s not protected information. When you give it to the pizza company, it becomes proprietary. They own it and can sell it.”
This sort of data collection–for the purposes of debt collection and beyond–has only grown exponentially with new technology. We give up more information about ourselves, from the geolocation information we yield when we check in on Foursquare or add a location to an Instagram photo, to the information we let apps have when we install them on our smartphones, Brown said. “It really is scary.”