FCC Trying To Minimize Annoyances From New Robocall Debt Collection Loophole

Image courtesy of Jenn and Tony Bot

Last fall, a rider to a must-pass federal budget bill kicked down the barricade that has prevented government debt collectors from annoying hundreds of millions of consumers with auto-dialed, pre-recorded robocalls. Lawmakers hate the bill, but they won’t consider any legislation to close the loophole. The White House’s own analysis of the loophole shows that it won’t really bring in any more money, and could actually be a revenue loser, but the administration isn’t doing anything to roll back the changes. Attorneys general hate it too, but they enforce laws instead of writing them. With an August deadline looming, the Federal Communications Commission has no choice but to move forward with making the loophole as palatable as possible.

Sources confirm to Consumerist that the FCC has voted to adopt a notice of proposed rulemaking, which should be made public today or tomorrow.

Though the proposed rules do allow for the government — and collectors working on the government’s behalf — to make robocalls for the purpose of collecting debts owed to the federal government, the FCC has tried to bake in a handful of restrictions to keep this from becoming a free-for-all.

First, consumers would retain the right to stop debt collectors from calling them. These robocalls would need to clearly disclose this right when the call is made.

Additionally, debt collectors would not be allowed to place robocalls to friends or family members of the alleged debtor.

Perhaps the most important rule — and one we predict will receive the most pushback from the collections industry — robocalls would be limited to three per month. Given that some debt collectors have been known to place more than three robocalls in a single day, the industry might find this too restricting.

Let’s pause for a moment out of respect for the poor debt collectors of the world.

Speaking of which, supporters of the loophole — including Bank of America, Wells Fargo, Apollo Education [parent company of University of Phoenix], and DeVry Education — continue to argue that these robocalls actually benefit consumers, calling them an “important consumer protection [that] will help those struggling with student loan debt.”

Translation: It will allow us to blast out cheap, automated phone calls so that we can annoy people into paying up.

We’ve not seen the final language of the proposal, so we can’t judge whether or not these restrictions will be effective. Additionally, the rules may change after the 30-day open commenting period, which will kick off after the text is made public on the FCC site.