Obama's Debt Reduction Plan Includes Letting Debt Collectors Robo-Call Cellphones To Collect On Federal Student Loans

One part of the debt-reduction bill Obama sent to Congress is a provision that would let debt collectors robo-call cellphones to collect on what’s owed to the government, like federal student loans.

The law currently forbids the use of autodialers to robo-call people on their cellphones. Autodialers are allowed to be used to call landlines.

The AP reports that the administration recently wrote the measure “is expected to provide substantial increases in collections, particularly as an increasing share of households no longer have landlines and rely instead on cellphones.”

The move is “just an acknowledgment of the fact that a lot of people have abandoned landlines and only have cell phones,” White House press secretary told reporters. “As a matter of practicality, if they need to be contacted with regard to their debt, there has to be a way to contact them.”

However, the law does allow for debt collectors to call debtors on their cellphones, they just have to use their fingers, and not computers, to dial the number.

A spokesman for Education Secretary Arne Duncan told the AP, “It’s a reality of the 21st century that a growing number of those who are delinquent are using only a cell phone. If we can’t reach them, we can’t help them. And that’s not good for students or for taxpayers.”

“Enabling robo-calls (to cellphones) is just going to lead to more harassment and abuse, and it’s not going to help the government collect more money,” Lauren Saunders of the Boston-based National Consumer Law Center told the AP. “People aren’t paying their student loans because they can’t find a job.”

There seems to be a new push by the debt collection industry to get access to your cellphone with autodialers. Last week, a bill was introduced in the House that would let businesses robo-call your cellphone “for informational purposes.”

Obama Seeks Debt Collector Proposal [NPR] (Thanks to Joe!)