Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog
The Washington Post reported yesterday that the latest congressional budget deal includes a provision to let companies collecting federal student loans (or other debts guaranteed by the government) call cellphones using auto-dialers.
The purpose of the bill is to increase communications in an attempt to keep more student loan borrowers current in their debt. However, the unintended consequences are likely to be increased harassment about payments not made, robo calls to relatives, references and co-borrowers and reassigned cell phone numbers. Calls which would no longer be under the protection of the Telephone Consumer Protection Act (“TCPA”).
The proposed amendment is to Section 227(b) of the Communications Act of 1934(47 U.S.C. 227(b), Restrictions on the Use of Telephone Equipment):
RESTRICTIONS ON THE USE OF AUTOMATED TELEPHONE EQUIPMENT.– (1) PROHIBITIONS.–It shall be unlawful for any person within the United States– (A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice–
…(iii) to any telephone number assigned to a paging service, cellular tel,ephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call;
The amendment in Sec. 301. Debt Collection Improvements adds “…,unless such call is made solely to collect a debt owed to or guaranteed by the United States” after “charged for the call,” and makes other similar adjustments. The provision includes a deadline of “not later than nine months after the date of enactment of the Act, [the FCC] shall prescribe regulations to implement the amendments made by this section.”
The Post reports that the Department of Education argues this change is needed in order for its servicers to have a better chance of keeping borrowers – who are more likely than older consumers to only have mobile phones – on track with payments. NCLC’s Margot Saunders argues that this change will subject borrowers to harassment and cell phone charges.
Most reports, including this one on The Hill, predict that the budget deal will pass The House today. Senate Minority Leader Harry Reid (D-Nev.), as well as the White House, supports the “imperfect” two-year deal, which raises the debt limit, avoids a government shutdown, and supposedly gets the country out of a crisis-to-crisis management pattern.