Obama Proposal Loosens Restrictions on Cell Phone Calls for Debt Collection

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Buried in President Obama’s deficit reduction plan unveiled Monday was a provision that would allow cell phone calls for the purpose of debt collection. But the brief proposal seemed to cover only debt owed to, or guaranteed by, the Federal Government.

On Page 28 of “The President’s Plan for Economic Growth and Deficit Reduction,” there is a very brief paragraph that states:

Allow agencies to contact delinquent debtors via their cellular phones. The Administration also proposes to amend the Communications Act of 1934 to facilitate collection of debts owed to or guaranteed by the Federal Government, by facilitating contact of delinquent debtors who are most readily reached on their cell phones. This provision is expected to provide substantial increases in collections, particularly as an increasing share of households no longer have landlines and rely instead on cell phones.

There were no additional details given, but a spokesman for the Office of Management and Budget did tell the Huffington Post, “This proposal merely reflects the fact that more and more people rely solely on a mobile phone for their voice communications, and allows debt collectors to call them on these numbers.”

The proposal was included in a section of proposals under the broad heading “Step up collection of debts owed to the Federal Government.” Other proposals in the section include increasing IRS levy authority for Federal contractor payments and offsetting Federal tax refunds to collect State income taxes from debtors who currently reside in other States.

The prohibition on calling cell phones, specifically with auto-dialers, has been a cause of concern for the debt collection industry for years.

“The President’s proposal is consistent with where we’ve been on the use of cell phones to communicate with consumers,” said Mark Schiffman, spokesman for debt collection industry trade group ACA International. “We certainly support this direction as it aligns with what we’ve been advocating for as it relates to the TCPA.”

Continuing the Discussion

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  • avatar A Tep says:

    Self serving government at it again. I read it as “amend the Communications Act of 1934 to facilitate collection of debts owed to or guaranteed by the Federal Government” What about all other debts due and owing to American businesses?

  • @A Tep:

    While there’s no denying your point that (at present) the plan only allows for mobile phone communications tied to federal government receivables, I should think the ARM industry would view this proposal as a step in the right direction. It’s at least conceivable–should the plan go forward, should the provision survive within the plan, and should the desired results be achieved–that those successes might pave the way for a revision of the laws (like TCPA) governing debt collection in the private sector.

    From an industry perspective I’m inclined to view this part of the plan as the proverbial “half-full glass,” though I can understand–even as I disagree with–the half-empty position. What I don’t so much buy into is smashing the glass before it’s even been set down on the table.


  • avatar [KFH]ROY says:

    “The President’s proposal is consistent with where we’ve been on the use of cell phones to communicate with consumers,” said Mark Schiffman, spokesman for debt collection industry trade group ACA International. “We certainly support this direction as it aligns with what we’ve been advocating for as it relates to the TCPA.”

    The quote above from ACA and part of the comments drive me nuts. Why is it this industry and ACA, as it’s “LEADER”, take everything from this passive approach. Like the government is doing us a favor or throwing us a bone.

    It’s BS – this industry has piles of cash and investors with even more piles of cash. We need to drop this wait and see attitude and attack these left wing SOB’s with the same fervor that the unions and lawyers do for their industries.

    Quit acting like they are doing you favors and so something ACA!! You are the lamest excuse for a trade association I have ever seen. I’ve been in this business since 1992 and the regulatory BS gets worse every year!

  • avatar Brent Staulcup says:

    This cell phone issue seems to be pretty high on the list of wants for collectors. Just curious that if in negotiations to revise the FDCPA, would the industry agree to prohibiting collection of out-of-stat debt, in exchange for permission to call cell phones? Hypothetical I know, but negotiations usually are a give-in-take, and I wonder where the industry places it’s values concerning these two matters.

  • avatar Patrick Lunsford says:

    @ [KFH]ROY – ACA, and a few other industry associations, are currently the ONLY voice for the industry on Capitol Hill. And they’ve actually got a legitimate operation in DC. I know, I’ve been to their office downtown and met with their people. If you think that throwing “piles of cash” at elected officials is the way to go, so be it. But that’s not exactly how it works, unless you really, really have piles and piles of cash (and if you do, please feel free to throw it any direction you’d like) or unless you’re willing to break all kinds of laws (you aren’t suggesting that, are you?).

    This development is very good news because it signals that the Administration — the left wing SOB’s you reference — actually agrees with a core position of the industry: consumers are moving to cell phones and sacrificing landlines. As such, laws and regulations will need to be updated. This is the first public step of a very long process that will play out over years, and has been going on behind the scenes for years.

  • avatar E. Normis Debtor says:

    I concur with Brent. Prohibit collection attempts, and/or the sale thereof, of legally unenforceable debts, in exchange for the use of auto dialers to cell phones.

  • avatar [KFH]ROY says:

    Patrick – they do not agree with ANY principles of this industry. The FDCPA was written in 1977 for God sakes – looks at this:


    This industry calls more people in 1 day than all the agencies did in a year in 1977!!! Not to mention the advent of email, MMS, cell phones, faxes (that are now as out dated as the law itself) Then there are all the other ill-conceived laws that have come up since then, TCPA, HIPPA, just a bunch of big government garbage!

    Rather than hail this as a victory, ACA should ask if the government is saying that consumer protection is only important when it’s the private sector recovering it’s money? Are some pigs more equal than others?

    ACA never, ever calls any of these people out on their hypocrisy, ever! Never proactive, only reactive with the utmost spinelessness!

    There is NO excuse that we are still dealing with the Foti issue after all this time. Our industry is regulated on whim by daily case rulings in courts all around the country. It’s complete madness and needs to be stopped NOW! Now more than ever, with business and municipalities scrambling to recover money and reduce losses, is the time to push to repeal regulations, not reform them!

  • avatar Patrick Lunsford says:

    @ [KFH]ROY – “Rather than hail this as a victory”

    No one has done that. I, and Mark Schiffman in the article, have pointed out that this is a positive development for the regulatory landscape. It’s not a victory. You can’t keep looking at this in black and white terms. If you’re waiting for “total victory” over your regulatory oppressors, I have some sobering news: you’re never going to get it.

    As for getting laws and rules changed, I have to bring in some more reality. We all know that debt collection is a very important business function, and that the industry performs a valuable service to basically every other industry in the country. But changing debt collection laws — especially to the benefit of the collectors — isn’t exactly top priority for anyone in the legislative or executive branch…and that’s been the case forever. I don’t know what you think can get accomplished, or how.

  • avatar Donna Floyd says:

    In an age where well over 60% of people across genders, race, and economic status only use a cell phone for communications I’m surprised this legisltion ever got any traction at all. It was introduced about 5 years too late and is not relevant for today’s cell phone user. Most plans don’t have low minute restrictions or any at all. The collections and financial industry as a whole needs to rally together to put a stop this now.

  • avatar Professor W says:

    Trade for OOS Debt to “go away”?? I am sick of these tired liberals going on and on about poor old debtors that should be made well. THEY morally owe the money and, if you don’t want them to have to think about it pay it for them. Do not give them an easy out for then WE have to pay it.

  • avatar Brent Staulcup says:

    @Professor Most of the timeframes that have been discussed are in the 5-10 year range. If you aren’t a good enough collector to get the money in that length of time, perhaps you should look for another job.

  • avatar nascar says:

    You debt collectors just don’t get it. There is no law prohibiting debt collector from calling consumer’s cell phone. You just can’t use your autodialers to do it. There is absolutely nothing, except your own unbridled greed and disdain for the law, which prevents you from picking up the phone and MANUALLY dialing the number.

    After all, when you folks are sued for TCPA violations, as a defense, you claim to have manually dialed the calls anyway. Why not comply with the law and do it right the first time.

  • avatar John Tallarico says:

    This is an absolute step in the right direction. We all have acknowledged that cell phones are replacing landline phones at an accelerated pace with over 25% of homes wire-free. It only makes sense that cell phones are not given special treatment with added calling restrictions.

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