Social networking sites help people share personal and sometimes business information with others through an avenue designed to make it easy - whether it involves text, pictures, documents, music or videos.
There are thousands of social networking sites. Some focus on certain industries, interests or subjects. Members can join for free and create a profile and add anything they would like - while connecting with like-minded people.
Some collectors use social networks to find debtors or past due customers. Many have public profile pages on social sites and a collector can find a mailing address, phone number, cell phone number, place of employment and other contact information by searching the sites.
For creditors, text messages and e-mails seem to be the preferred and most effective way to increase collections. One company I'm aware of has seen a 12% lift in communication by using text messages and e-mail. It seems these methods are perceived as less evasive than a phone call, and customers have the sense of being in control when and if they respond.
Some collectors I have spoken with obtain consent from their customers before the sale for text messages to be used for future correspondence. They include the wording on the paperwork the customer signs when opening an account, such as the credit application, agreement or contract.
The wording is similar to this:
By signing this document, customer agrees to accept and understands that text messages may be used when servicing their account, including the collecting of debts.
Others have taken it a step further and have a more detailed outline of how text messages will be used. They always get the customer to sign and acknowledge this provision:
You the customer authorize us (your company) to send you (customer) a text message at any mobile number at which we reasonable believe we can contact you, for any lawful purpose, including but not limited to:
1. Suspected fraud or identity theft on your account
2. Obtaining information necessary to service your account
3. Collecting on your account
4. Notifying you to important issues regarding your account
Something important for collectors to remember is that all messages should include a mechanism for the consumer to opt out of receiving further text messages. This is to protect the consumer and the collector, especially since the law does not specifically address text messages being sent as a form of dunning.
If you decide to send text messages about bills to your customers, make sure the customer is not charged for the text and that you as the company, incur that charge.
Here are some things to not use social networking sites in collections: instant messaging a debtor about a debt; initiating more payments on a bank account when additional transactions have not been authorized; and sending a "friend request" to a debtor through any site.
Instead, use the sites for: e-learning; skip tracing or locating debtors; researching collection tools, such as software or skip tracing tools; credit reporting; use database technology to maintain account information on customers who owe you money; access consumer payments only with authorization for each specific payment or transaction; and researching place of employment.
Business owners and credit managers can use the sites to find a debtor and get a mailing address or employment information to enforce in-house collections. With a place of employment a creditor can better evaluate somebody's ability to pay and if assets can be attached. Collectors then might be able to garnish pay if state laws allow.
Business owners also can use database technology to maintain the account information of customers to whom they already have extended credit.
For example, credit bureau members can use many online services to help collect. Communicating with customers or debtors is not a single communication effort and for any efforts to work companies need to use a multi-communication strategy that works for the business and customers and follows the law - online and off.
Michelle Dunn is the founder and CEO of the American Credit & Collections Association. An award-winning author and columnist, Collections & Credit Risk has named her one of the Top 5 women in collections.