Social Media & Debt Management

Debt Management is on the cusp of being reinvented by Social Media.

That was the conclusion I walked out with having presented to a conference group of industry experts last week.

The session brief was ‘Do something different to make the annual conference zing and provide reason for dinner talk later on’. Unsurprisingly it’s been a ‘Social Media with Everything’ kind of a year, so I decided to mash the two topics together and hope for serendipity.

It came early. In the main because I ran through my deck much too fast so the guy at the back of the room just beamed back when I checked how close I was to his five minute countdown. Nowhere near in fact. So I entered improvisation mode. And discovered something about Social Media and Debt Management as a result.

Anything New In Debt Management?

“Imagine this”, I started out. “The financial cold we all caught a few years back is not going away. We are all in debt up to our ears, over extended beyond our means now the bad times are here and any source of recovery disappeared over the horizon in an Eastern direction. In short, we are screwed!”

“What does this imply?” I ventured, now warming to my theme as I glimpsed the semblance of an insight coming into view. “Let’s pause and think about the way in which debtor and collector of that debt have traditionally done business.”

“They’ve done it in private. Why? Because there’s social stigma being in debt. So being discreet has suited both sides thus far. Often in the UK, at least, a deliberately anonymous SMS kicks off the recovery process. Everyone’s happy. That is until the ubiquity and transparency of Social Media starts to tempt both sides with going public.

Luckily I’d done some research and discovered that debt collection and social media were items that appeared together when googled. As a result, I’d run through a few slides at the start of the presentation showing how not to do social media.

For Some, The Wild Wild West Lives On

The examples showed some pretty sneaky behaviour. For instance public domain data from social networking activity being used to track down debtors and reveal their financial lifestyle. In another example, messages were posted on a relative’s Facebook wall in an attempt to name and shame. That one backfired and ended in court with a payout for emotional damages.

Even good ol’ honey traps were used. Beware that extremely hot looking person who wants to befriend you on Facebook. On reflection, you know you are not that lucky in life! It’s just a debt collector coming on strong before they pounce.

There was even an example of one debt collection firm building a fake court to persuade some hard core to part with their cash. I know that had nothing to do with social media but the image it conjured up in my mind was just too entertaining to ignore.

We all sniggered at the dedicated nuttiness of it all.

Of course my UK audience of industry experts predictably assured me that this could only happen in Uncle Sam’s backyard and such behaviour in the UK could never……………….

A Game Of Who Blinks First

….Of course. But that was only one side of the story. Undeterred I continued my hypothesis.

“What if the debtor goes on the offensive? Remember, desperate times call for desperate means. Maybe the stigma of debt dissolves over night once it becomes apparent to everyone they’ve all caught the same disease so they are all in it together. Hurrah for the relief of shared pain!”

“What happens then?”

“Since there is nothing to lose by staying private, what’s the mileage in using Social Media to face down the agencies’ efforts and go public”. The harder it gets to collect debt and the tougher the collection tactic, the more ammo there is to attempt to trigger a viral storm of protest. And whatever the real facts might be, our tabloid sympathies always favour the underdog.”

I noticed this last scenario had tipped my audience into acute, active listening mode as they processed the implications. Body language said they did not like what they were seeing.

Bear in mind that many collectors of debt are the very same financial service brands that have just been thrashed to within an inch of their brand equity lives. So the last thing they need right now is another reason to appear the pantomime villain.

To seal my ‘what if’ scenario, I concluded that all this was beginning to look like the dry tinderbox syndrome that so petrifies Social Strategists who try to take long weekends without the safety net of a social media emergency plan in place.

Did any of my audience in fact know if they had such a safeguard already in place? No-one nodded. I sympathetically suggested one take-away was to request a half day planning workshop with their Social Supremo.

Even after painting this scene, there was still time to spare, so I squeezed for some reaction.

Seems I’d hit bingo. Two Americans in the front row from a debt management software business confirmed that the US courts were indeed starting to see such histrionics from debt-laden social activists. Someone from the UK then piped up that his team had noticed debt collection tactics were now being swapped in certain online forums. “The end of sustainable good ideas”, he ruefully concluded.

So luckily for me at least, the world had indeed moved on and the old implicit agreement that bounded the collection of debt is now under attack from those that would use Social Media as a new form of piracy. Only time will tell if either side wins public sympathy or how the courts judge such behaviour.

In the meantime, the first wave of skirmishes have begun. Yo ho ho!

There’s A Slide Show Too!

If you liked this tale of Social Media pirates, then there’s a picture version too over at Slideshare where I have uploaded the slides that I ran through so very fast on the day. You are most welcome to view and use as your leisure.

Thanks for reading.