How to go about it
Even in view-only mode, social networking sites can yield a treasure trove of information, Dunn says. She advises taking these steps to mine the most valuable nuggets:
• Be familiar with the Fair Debt Collection Practices Act (FDCPA). Although this federal law governs third-party collectors (credit unions are first-party collectors), it can serve as a guideline for credit unions. Plus, many state collection laws are modeled after this act, Dunn says.
She expects the Federal Trade Commission (FTC) to modify FDCPA—written in 1978—within a couple years to account for new technology, including social media. “FTC is looking into what to change and how to change it, namely to protect consumers but also to demonstrate how collectors can comply and still use this public information in an ethical and fair way.”
• Implement guidelines—if only a short list of bullet points—outlining how you’ll use social media in your collection efforts (i.e., not posting messages on someone’s Facebook wall).
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• Select one person to glean information from members’ social networking sites, and set a time limit for this activity. “People can really get sucked into social media,” Dunn says. “So limit this to one hour a week or an hour a day depending on your credit union and how much volume you have.”
• Verify that you have the right person. Check the information you already have. Do the city, state, address, and/or phone number mesh with the person in question?
“There could be 50 Facebook pages for ‘Michelle Dunn;’ make sure you have the right one,” she says.
• Look for new phone numbers, addresses, places of employment, and other information, especially if the person’s phone has been disconnected or their mail is being returned. Also, check out the person’s photos in case you need to serve them with papers.
• Search second-tier social networking sites. There are many social networks for certain industries and interests.
“These sites provide more places to look for information,” Dunn says. “Often, Twitter accounts will list a description about the person and a web address. Sometimes this is their employer’s website or another social networking site."
Collections clients often ask Dunn which social network provides the best information. Her answer: It depends on your membership base.
“Some of my clients have customers that are 20 to 30 years old, and most of them are on Facebook and MySpace—but not LinkedIn,” she says. “You just have to determine where they hang out the most.”
Dunn continues to be amazed by how much information people share online.
“People really post their whole lives on these sites,” Dunn says. “They go into great detail. A lot of my clients are having great luck verifying information and getting new information on accounts that have skipped.”
She says some financial institutions now use social networking sites when making credit decisions: Verifying employment, home ownership, and other credit application information.
“They’re looking to see if everything matches up,” Dunn says. “They want to catch problems before extending credit.
“Social media is a great tool if you’re smart about how you use it,” she continues. “You don’t have to travel anywhere to get information, and it’s free.”
Bill Merrick is deputy editor of Credit Union Magazine. Follow him on Twitter via @CUMagazine.