Before, bill collectors used a process called “skip tracing,” which is a way of tracking down hard to locate debtors. Skip tracing involves background checks, talking to post offices, old neighbors and family members, credit bureaus, and keeping a computer up to date with any data that may change on the elusive debtor’s new accounts.

Nowadays, it looks like collection agents have found a cheaper, more efficient way to find their debtors – social networking websites like “Facebook.” Gary Nitzkin, a credit collection lawyer with his own firm, weighs in on the situation. “On the surface of it, I can tell you that there is nothing illegal about it.” On the surface indeed. However, Nitzkin and his collectors actually take a step further, “friending” the debtor on whatever social website. After they have made friends with the debtor, they then speak with other friends and find out what the debtor is doing, obtaining the scoop on their financial situation, and determining if there are any new assets that can be taken.

The FDCPA was written in 1978, before social media existed, so there are no specific guidelines monitoring contact that might be made over the internet. However, the FDCPA strictly prohibits collectors from doing or saying anything that is false or misleading. Additionally, collection agents are not allowed to contact third parties regarding a debtor’s financial situation. And perhaps most importantly, collection agents abiding by the FDCPA must speak only to the debtor about the debt, and they have to verify that they are in fact speaking to the correct individual. Then after that, they must issue a “mini-miranda” letting the debtor know that this contact is an attempt to collect debt and anything said can be used for collection purposes. Nitzkin’s practices are “grey area” at best, shady at worst.

If anything, this borderline abuse of media illuminates one of the major issues for the collection industry today, that the FDCPA has to be updated badly. Debtors and debt collectors alike take issue with the law. Debtors believe that the monetary damages that the FDCPA award in lawsuits should be increased due to inflation over the years, debt collectors complain that there are no provisions regarding cell phone calls in a country where only forty percent of its citizens own a landline. With technology advancing at a faster and faster rate, it is my prediction that the FDCPA won’t be the only law that finds itself needing a big update.

Mallory Megan works for Rapid Recovery Solution and writes articles on medical collection agencies . Free reprint avaialable from: Bill Collectors Turn To Facebook To Find Elusive Debtors.

This is a twenty one percent increase in land from statistics in data that was collected in 2008, and a one hundred and twenty percent increase in total properties from 2007. Additionally the report indicated that one in forty five housing units, 2.21 percent, got at least one foreclosure filing in the year of 2009, up from 2008′s 1.48 percent and 2007′s 1.03 percent.

Just in the month December, foreclosure filings were reported on 349,519 properties in December. That’s a fourteen percent jump from the previous month of November and a fifteen percent increase from 2008. Nevertheless, even though there was an increase in December, foreclosure activity in the fourth quarter of 2008 has decreased by seven percent.

Of all of the states in America, Nevada took the nation’s highest state foreclosure rate; more than ten percent of housing units received at least one foreclosure filing in 2009. This is Nevada’s third consecutive year at the top of the foreclosure list. Nevada’s foreclosure activity in the month of December increased twenty seven percent from the previous month, however it still was down by twenty two percent from December of 08.

Arizona claimed the country’s second highest state foreclosure rate in 2009 with even more than six percent of properties that received at least one foreclosure filing during 2009, and Florida was the country’s third highest foreclosure rate at 5.93 percent of its properties getting at least one foreclosure during the filing year.

This raises things to think about in the debt collection industry. Trends that have recently been noted that debtors are maxing out their credit debt and low balling their assets to receive lower payment plans. The fact that they are maxing out their credit cards to receive lower payment plans does not look promising.

Mallory McGuinness is employed by a debt collection agency. She also composes articles on business, finance, consumer spending and collection agencies. Also published at Foreclosures On The Increase.

As house prices diminish and with interest-only mortgages on the decline, more homeowners actually owe more on their mortgages than what their house is worth. It doubtlessly has occurred to many homeowners that this makes sense, as many are defaulting on mortgage payments as we speak.

Here’s a quick breakdown to explain the situation. You buy a house for $400,000 that is now worth only $300,000. Thanks to an interest-only mortgage, you still are in arrears for $400,000. If you eliminated this off of your balance sheet, your net worth will increase by $100,000. You’d still need a place to live, but from this point you could purchase a more affordable house or rent for a bit of time.

There is one giant drawback to abandoning your house. If you do, you will annihilate your credit rating, making it difficult or even impossible to rent an apartment, get a new mortgage, and even a job. There is a major drawback to abandoning your responsibilities. If you walk away, you will trash your credit rating, making it harder or impossible to rent an apartment, qualify for a new mortgage, and perhaps get a job.

New laws are out now to assist families facing foreclosure, which will encourage people to pick options other than abandonment.

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Collecting the debt by yourself: If the debt is new or small, you’ll most likely start by trying to collect the debt yourself before hiring a collection agency or a lawyer. The most efficient way to start the process of collecting an unsettled debt is by calling the debtor. Many nonpaying customers can talk a great talk on the phone, but then never deliver. If the business is local, aspire to make an appointment with their finance manager to talk face to face.

Another useful way to motivate consumers to make a payment is by using a 10 day demand letter. Some collection agencies offer a free 10 day demand letter service that includes postage and mailing of a demand letter sent on official collection agency letterhead. Many times, this is enough to get your customer to part with their payment.

Hire a Collection Agency: Many small enterprises at the beginning dont think of hiring a collection agency to collect oustanding debt, but of the outsourced solutions, a collection agency is usually the most cost effective and gets the best results. With a collection agency, you don’t pay until they collect the debt, meaning that the collection agency is highly inclined to find a way to get the customer to pay. Because they don’t get paid unless you do, a collection agency tends to work fast and much more efficient when working on a contingency basis.

Today’s modern collection agencies don’t use scare tactics or bully customers. Besides, not all consumers who are behind on payments are deadbeats. When you choose a collection agency, make sure one of its goals is to maintain extreme professionalism and one that fallows the FDCPA diligently.

Taking the legal avenue: Another choice to collecting a debt is to take legal action whether by taking the debtor to small claims court or by hiring a lawyer to pursue the debtor.

Mallory Megan is employed by a collections agency that works with a debt collection lawyer. She also does articles on business, finance, consumer spending and collections agencies.

There are a few things that companies should look for when making a choice for the right Business Collection agency. These include:

Price. Not all Collection companies will charge the same rate or the same way. Almost all Collection agencies do, however, set their rates based on a percentage of the total amount of the monies to be collected. For example, a collection agency may charge ten percent of the total collection amount to the business that hires it. Some collection agencies also charge only once funds have been collected, while other collection agencies charge an upfront fee for their services.

Reliability. Not all Collection agencies are clones of each other when it comes to reliability and effectiveness. One of the preferred ways to conclude how dependable a Collection agency is likely to be is to complete a simple background check on the agency through the world wide web or search with the Better Business Bureau. Also, many Collection agencies will offer references or have a list of clients that they have provided services for that new clients may check before hiring the agency.

Contracts. Some Collection firms offer contract work or retainers for their clients. In such a case, the agency may work a set number of hours each month for a set fee. Businesses need to be sure that they require a Collection agency’s services before they sign a long-term contract or retainer contract so that they can be sure that they get what they pay for.

Methods. It is important to ensure that a Collection agency is able to use a variety of methods when contacting non-payees. For example, Collection agencies should not only be able to approach a non-payee diplomatically through letter writing and phone calls, but the Collection agency should also be able to use legal courses of action, if necessary. May Collection agencies are part of law firms, which enables them to file legal cases easily and quickly, if necessary.

Mallory McGuinness works for a collections agency that works with a debt collection lawyer. She also does stories on business, finance, the credit industry and collections agencies.

Capital One offered to give consumers one dollar of new credit if they agreed to transfer the whole balance of a charged off account to the new credit card. This meant that Capital One could re-age debts to get around the statute of limitations, which would start anew.

According to the lawsuit, Capital One issued cards with limits as low as 200 dollars for low-income consumers with credit histories that were poor. The cards carried membership fees of up to 59 dollars per year. Usually, the annual fees were billed on the consumer’s second monthly statement, leaving the consumer with just 141 dollars of credit when they thought they had 200 dollars. Then, if the consumer mistakenly exceeded the limit, they could face over the limit fees of up to 29 dollars.

In the past few months, McGraw’s office has targeted debt collection agencies in part of an effort to protect West Virginia’s debtors. In November his office took two payday lending firms and four collection agencies to court.

As members of the debt collection industry, we often scratch our heads and wonder why, in a suffering economy where debt is running rampant, we cannot retrieve the money that consumers owe. Experts allege that with unemployment rates running so high, it is impossible for consumers to repay their debts. But bad business practices are not going to help the situation either. It may be a knee jerk reaction to try to con consumers out of money, but it is just that. A knee jerk reaction.

Mallory Megan works for a debt collection company. She also writes storieson bankruptcy, business, finance, and debt collection. Get a totally unique version of this article from our article submission service