FTC to take a closer look at debt collectors' use of high-tech tools

FTC holding public hearing on debt collectors’ use of online tools, mobile communications

With the advent of a host of new or advanced technologies ranging from mobile communications to online data management,  available to debt collection companies, the Federal Trade Commission is out to make sure those companies aren't abusing their place in the business world.

On April 28 in Washington, DC the agency will hold a public workshop that looks at how it can better protect  consumers from the high-tech onslaught some debt collection firms are using. 

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From the FTC: "The workshop will explore developments in technology that debt collectors use to gather, store, and manage information about consumers; to comply with the law; to communicate with consumers; and to receive payment. The workshop will provide an opportunity for government regulators, industry members, technologists, consumer advocates, and researchers, to discuss the costs and benefits of these technologies for debt collectors and consumers. It will also address whether and how collectors may use such technologies consistent with applicable laws, including the Fair Debt Collection Practices Act and Section 5 of the FTC Act, what consumer protection concerns arise from use of these technologies, and what actions, if any, the Commission and other policymakers should take to respond to those concerns. "

The FTC wrote in a 2009 report that the invention and use of new technologies also has fundamentally altered the debt collection business. "Communication technologies, in particular, have spurred profound changes in this industry. Debt collectors no longer must use individually-typed letters and manually-dialed telephone calls to contact consumers. Collectors now are able to easily and relatively inexpensively mass-produce and send letters to debtors. Collectors also now use sophisticated automated dialing and interactive voice recording technologies to efficiently place telephone calls to consumers. Consumers likewise use new communication technologies to handle incoming calls. They receive calls on mobile telephones as well as on landline telephones, and they use Caller ID services and answering machines to filter the calls they receive."

 The FTC also noted that other technologies have "increased exponentially the ability of creditors and debt collectors to obtain, store, and transfer data about consumers and their debts. Changes in database technologies have dramatically enhanced the ability of debt collectors to aggregate disparate pieces of information about consumers, thus making it cheaper and easier to locate and contact consumers."

The FTC has stated in the past that debt collectors generally should be allowed to use all communication technologies, including new and emerging technologies, to contact consumers. The central law, the Fair Debt Collection Practices Act, must be applied to avoid collectors' use of communication technologies in a manner that causes consumers to incur charges, or otherwise subjects them to unfair, deceptive, or abusive acts and practices, the FTC stated.

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