The Office of Fair Trading has released updated debt collection guidlines after collectors were reported pursuing people who owe money on social media sites such as Facebook or Twitter.
The OFT is concerned that details about potentially embarrassing financial difficulties could be revealed on the sites.
There were a series of complaints regarding debt collectors who had chased down their clients on the Internet, making them easily discoverable to third parties.
OFT will this week be considering stripping offenders of their consumer credit licences should collectors continue to use social networking for work purposes.
Dave Fisher, the OFT's consumer credit director, said: "In the present economic climate, with many people, including those who may be particularly vulnerable, in financial difficulties, it is crucial they are treated fairly by companies recovering their debts."
This is a particularly public incident following reports of similar incidents that involved debt collectors leaving messages on land lines in hope that relatives would listen and therefore pressure them into paying.
Using sites such as Facebook and Twitter to publicly contact those in debt is now considered a 'trick of the trade'. At the moment, there is nothing to stop it, but OFT are likely to start punishing those who do so in future.