FCC Releases Proposed Rules for Government Debt Collection Calls

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Last Thursday Federal Communications Commission (FCC) Chairman Tom Wheeler revealed proposed restrictions on the use of an Automated Telephone Dialing System (ATDS) to call people who owe money to the government.

Wheeler released details of the draft Notice of Proposed Rulemaking (NPRM) circulated among the commissioners last month in in a series of letters to members of Congress who opposed a new exemption for government debt collectors and urged the FCC to at least create strict limits on those calls. Copies of the letters to Congress can be found here.

On Feb. 24  insideARM ran an article by Lydia Beyoud of Bloomberg Bureau of National Affairs and Privacy Watch, reporting that a draft rule to exempt ATDS calls to collect federal debt from Telephone Consumer Protection Act (TCPA) of 1991 rules was circulated on Feb. 17 to the full Federal Communications Commission. However, at that time, the details of the draft rules were not yet publicly available.

In November, 2015 insideARM reported that the latest congressional budget deal included a provision to let companies collecting consumer debts guaranteed by the government (like federal student loans) call cellphones using auto-dialers. The deal stipulated that the FCC must issue and implement the provision by Aug. 2, 2016.

Per the Wheeler letters, “The draft NPRM includes clear, pro-consumer restrictions on the type and number of calls a federal creditor may place to recover a delinquent debt, even when those calls go unanswered.”

In particular, the NPRM proposes:

  • that only calls made after a debtor has become delinquent are covered by the exception;
  • to limit the calls to creditors and those calling on their behalf, including debt servicers;
  • that these robocalls can only be made to the debtor, so as to prevent unwanted robocalls to relatives, friends, and other acquaintances of debtors;
  • to limit the number of calls to three per month per delinquency; and
  • to empower consumers with the right to stop calls from a federal creditor at any time and to require callers to inform debtors of this right.

Finally, in the letter Wheeler commented, “Commission staff worked closely with Consumer Financial Protection Bureau (CFPB) staff in drafting the NPRM and developing the aforementioned proposals and has also consulted closely with the Department of Treasury, Department of Education and other federal stakeholders.”

insideARM Perspective

There are a number of things that should be noted when considering this news.

First, insideARM may be the only media outlet to report on this story without use of the inflammatory terms “robocall” or “robocalling.” This is because insideARM does not believe those terms apply to the types of calls mandated by the provision in the November, 2015 budget deal. ARM firms collecting student loan debt are not randomly/sequentially calling cell phone numbers.

Second, Comissioner Wheeler talks about the Commission staff working closely with CFPB, the Department of Treasury, and Department of Education and other federal stakeholders. But, he never mentions Commssion staff working closely with members of the industry he is about to regulate. Had the staff done so, they might have learned why there is a need for the ability to call cell phones of consumers that have delinquent student loans.

Third, if these proposed limits on the maximum numbers of calls (three calls per month) were suggested by staff at the CFPB, that foretells potential rulemaking from the CFPB on number of the maximum calls on other types of debt.

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Posted in CFPB, Collection Laws and Regulations, Collection Technology, Debt Collection, Department of Education Collections, Dialers, Featured Post, Government Receivables, TCPA .

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Continuing the Discussion

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  • avatar Kenlyn Gretz says:

    I find it interesting that the FCC is proposing this part: •that only calls made after a debtor has become delinquent are covered by the exception;

    Don’t they want consumers to know they are “going to be” in default. Reaching them after they become in default is anti-consumer. A company has no incentive to ring a consumer of a party who is paying as agreed.

    It will be interesting how they define “delinquency” – could a student loan have a delinquency for every monthly payment they have missed? So if they missed 3 months of payments, that could be 3 delinquencies per month or 9 calls per month? My fear is that they will release the details without asking the industry that works these accounts and nothing will be clear.

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