Although I work for a social media company, I happen to work next door to Rapid Recovery Solution, a collection agency. We even share a break room. It's rare that these two worlds ever come into contact, which is why I was surprised to read about a website called "The Debtor List" that uses social media in an attempt to shame debtors into paying. It was certainly a surprising read, although it also seemed as though it were inevitable.
At first, I thought this must be illegal. There are many, many rules governing how you can collect debt, and one of them is that you're not allowed to tell friends and family of the debtor that they owe money. So, at first blush, this website seemed like something that might exist for a few moments, tops, before disappearing under a deluge of fines and lawsuits.
According to John Monderine, the CEO of Rapid Recovery Solution, this certainly is illegal: you can't give out information about debts to third parties. And, this does exactly that.
In addition, I feel that the creation of a website like this creates a real moral hazard, the sort which has been endemic on any source that heavily utilizes user-generated content. There is no vetting process on The Debtor List and, while they have a very robust user agreement that would protect them from any lawsuits, there is nothing to stop people from writing false claims in an attempt to damage an individual or business. While it is true that this situation was always the case on all of these review sites, this is another example of the limitations of user-generated content.
Therefore, while I feel that it is a neat idea to try to use social media for debt collection, I feel that the costs far outweigh the benefits.
Michael Gillen is a project manager for fishbat, an online marketing firm located in Bohemia, NY.