Operations

Social Media Enhances Collections

But consider social networking sites a ‘view-only’ resource.

January 12, 2012
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Michelle Dunn recalls a sad, all-to-common story about a man who lost his job, stopped receiving unemployment compensation, and couldn’t make his loan payments.

Her colleague, a collection agent, would call the man from time to time to see if his circumstances had changed and to set up a repayment plan. But—alas—times remained hard.

Then the collection agent visited the man’s Facebook page and saw a new profile picture: The man enjoying himself immensely on a new boat.

“He had all sorts of posts on his wall: ‘I got my new boat, we’re going here and there and having a great time,’ ” says Dunn, a collections expert and author.

On his next call, the collector mentioned the Facebook page and said, “You tell me you’re not working and you can’t afford to pay $25 per month on your loan. Is that because you have a new boat?”

Social Media & Collections: Seven Tips

1. Use private e-mail addresses when contacting members.
2. Never converse with a debtor on social media sites, such as using e-mail or comment features.
3. Don’t send any communication that could be seen by a third party.
4. Switch from e-mail to tradition collection tools (phone calls or letters) if the debtor doesn’t respond.
5. Never publish a list of debtors online.
6. Don’t use a fake name or company name.
7. Don’t send a friend request to a debtor under the guise of learning more about the person.

Source: Michelle Dunn

After a moment of shocked silence, the man hung up. But three days later, the collector received a check for the balance of the loan.

This example demonstrates the power of using social media sites such as Facebook, MySpace, and LinkedIn to aid collection efforts, Dunn says. But as technology bypassed collection regulations, questions remain about how to use these tools appropriately.

Dunn’s chief advice: Consider social media a “view-only” resource.

“It’s not a place to post messages to members who owe money,” she says. “That’s not ethical or a good way to keep your members happy—and get paid. You’re not supposed to disclose a debt to anyone but the person who owes the money.”

Posting messages with members’ personal information could lead to privacy violations. Some collection agencies have gotten into trouble by setting up fake profiles and attempting to “friend” debtors.

“Credit unions should be aware it’s ok to use this public information that’s free to everyone—but not for contacting members,” she adds. “I can’t stress it enough: Keep it view-only to stay out of trouble.”

Next: How to go about it

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