Town to Increase Collections by Posting Debtor Names on Facebook

A town in Mississippi recently discussed the possibility of publicly naming the people who owe it money, including using popular social media site Facebook to distribute the list, all in the name of stepping up its debt collection results.

The Daily Corinthian (via the Associated Press) is reporting that the Board of Aldermen in Farmington, Miss. last week approved the creation of a system that would publicly disclose the name of anyone that owes money to the town. Once the system is set up, the Board will then vote to approve it make it live.

Officials there reckon there is no legal problem with the plan, since owing a debt to the town is a matter of public record. There were no details on how, exactly, Facebook would be used.

The subject of using social media, specifically Facebook, in the debt collection process is a topic of intense debate in the ARM industry. There are plenty of cautionary tales regarding the use of social media in the collection process. There is also some pretty sober thinking about how social media can help in the ARM process (mostly with skiptracing).

Due to third party disclosure concerns, most debt collection agencies have not developed a structured program for social media use (in collections). But a municipality using this avenue to post publicly-available information does not present the same legal issues. This is yet another way the rules are different for third party debt collectors and others that directly “compete” for a debtor’s wallet share.