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Flexing their muscles, debt collectors see an opportunity to fend off robocall rules

Debt collectors want federal regulators to dial down recent anti-robocall rules that, they say, wrongly end up lumping them with spammers and scammers.

Ever since new regulations took effect last year, too many valid debt collection calls have been mislabeled as “spam,” “scam” or been blocked altogether. At least, that’s what members of the credit and collection industry are telling the Federal Communications Commission.

They argue that it’s bad news for debtors to be in the dark. “Often if the consumer is put on notice of a debt sooner and earlier in the collection process, their chances improve of resolving the matter more favorably,” the trade association, ACA International, wrote this week in a letter to the FCC.

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The reason they’re concerned: Since last year, 62% of the group’s members have less success in contacting borrowers as well as a 40% drop in the ratio of calls that result in making contact, compared to prior years, and 78% of ACA’s members say their calls are being blocked. They say calls from schools and medical facilities are also in danger of being mislabeled or wrongly blocked.

The debt collection industry is jumping at an FCC public invitation to beef up the record surrounding its 2017 call blocking regulations. FCC Chairman Ajit Pai says he’s made it a priority to fight against unlawful robocalls and spoof call.

But the industry might be hoping they’ll get a sympathetic ear from Pai, who’s shown to be wary of too much regulation, evidenced by his repeal of “net neutrality” rules.

The trade group insists it has no love for widely-reviled, automated robocalls, but is asking for a suspension on all call blocking and labeling until there are “comprehensive rules” letting legitimate callers register numbers and “adopt a process for challenging erroneous blocking and mislabeling of calls.”

Just about half of calls to cell phones in 2019 will be spam, according to one study. And everyone’s wary to answer unknown numbers. Nobel prize-winning New York University economics professor Paul Romer let an early-morning call from Sweden with the news about the amazing award go to voicemail. He assumed it was yet another robocall.

FCC will weigh concerns of debt collectors and consumers

Consumer groups say people struggling with debts are painfully aware of their responsibility and told the FCC that more — not less —enforcement is needed. The protections need to be against both scam robocalls and unsolicited calls from companies chasing borrowers, they say.

Robocall volume grew 40% on the year in August and was “not attributable solely to scam calls,” they told the FCC this week. Debt collectors and telemarketers accounted for nearly half of the phone call flurry, according to consumer groups, including Consumers Union, National Consumer Law Center and the Consumer Federation of America.

Also see: 2017 was the worst year yet for robocalls

Debt collectors and telemarketers accounted for nearly half of the phone call flurry, they added. Many debt calls are coming from creditors and financial companies that aren’t subject to the Fair Debt Collection Practices Act’s rules, one advocate noted, explaining soft spots in consumer protections.

Meanwhile, a bipartisan coalition of 35 Attorneys General said they backed FCC efforts to keep finding new ways to stop robocalls before they start. The calls weren’t just annoying, many were bids to steal money and personal information, the prosecutors said. In August, 1.8 billion of the 4 billion robocalls were tied to a swindle, they said.

Debt collection complaints are a new twist on attempts to curb the annoying, unwanted automated calls.

‘Unintended consequences’ when collectors can’t reach consumers

FCC Chairman Ajit Pai says he’s made it a priority to fight against unlawful robocalls and spoof call.

As a record 30.5 billion robocalls flooded American phones last year, the FCC updated its rules in November and, let cell phone service providers block certain calls.

In August, the FCC asked for public input on how the agency “might further empower voice service providers to block illegal calls” and got more than 900 responses, including replies from telecomm giants like Sprint, T-Mobile attorneys general, the collection industry, consumer groups and fed-up Americans.

Recommended: Why student-loan borrowers fear a flood of robocalls under Trump

An FCC spokesman said the commission would review the filings and it would be up to Chairman Pai to determine if he wanted to recommend rule changes to the commission. The deadline to weigh in passed this week.

Debt collectors say they rely on calls to retrieve money. There are “avoidable consequences” when a debt collector can’t reach a borrower, said Mark Neeb, the CEO of ACA International, the debt collection trade association. Instead of working out a payment plan, a consumer could get dragged to court where a judge could garnish wages and impose court fees.

The industry is almost entirely dependent on phone calls, Neeb said. In 2016, collectors recovered about $67.6 billion in debt, a 42% increase in debt collection from 2013, according to one Ernst & Young study.

The collections industry wants to help consumers get on top of their finances, Neeb said, noting how unknown, unpaid debts can gnaw at credit scores. People may not like receiving such calls, but he said they play a crucial role. “We live with that opposing viewpoint every day,” he said.

Saunders said there were many responsible debt collectors — but also many who kept harassing callers, even for non-existent debts, sums they already paid or money they couldn’t afford.

Consumer groups disagree. Margot Saunders, senior policy counsel at the National Consumer Law Center, said there were many responsible debt collectors, but also many who kept harassing callers, even for non-existent debts, sums they already paid or money they couldn’t afford.

“Debt collectors don’t want to be subject to any limits, and consumers need relief,” Saunders said. As for getting a hold of folks, Saunders added, collectors “can send a letter. It’s not like calls are the only way to communicate with people.”

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