Debt Collectors Seek To Auto-Dial Cellphones
Wednesday, April 19, 2006
Debt collectors are asking the Federal Communications Commission for permission to use automated dialers to call a debtor's cellphone about overdue bills.
ACA International, the trade association that represents collectors, said federal rules formerly permitted collection agencies to call cellphones using a computerized system that stores and dials numbers. But a change in FCC rules in 2003 barred collectors from using such technology to call cellphones. They may use dialers to call land lines, but they must dial cellphones manually.
Earlier this month, the FCC said it would review the request and sought public comments which are due next month. Its review comes as complaints about debt collectors continue to mount.
The Federal Trade Commission last week issued its annual report on the collection industry, showing consumer complaints rising to a high of 66,627 in 2005, up 13.5 percent from 58,698 in 2004. More complaints were filed about debt collection than any other industry. They accounted for 19.1 percent of all complaints filed with the FTC in 2005, up from 17 percent of all complaints in 2004.
The FTC said that, given the millions of collection calls made to consumers each year, the number of complaints it received is a "small percentage of the overall number of consumer contacts." However, it said it thought the number of consumers who complain is only a "relatively small percentage of the total number of consumers who actually encounter problems with debt collectors."
The debt-collection association argues that the FCC ban on cellphone calls was inadvertent, part of the commission's attempt to curtail abusive telemarketing calls by auto-dialers that randomly or sequentially called cellphones.
The ACA says collectors don't dial randomly, but rather selectively call consumers who owe money. "We're not buying lists of consumers just to call them for the fun of it; we're not looking for cellphone numbers we don't have," said Rozanne M. Andersen, the ACA's general counsel. Andersen added that creditors and collectors have the cellphone numbers because consumers provided them when they applied for credit.
Not being able to call cellphones with auto-dialers will be "extremely detrimental to the industry and consumers," she said. According to the FCC, 6 percent of U.S. households now rely exclusively on wireless service, up from 1.2 percent in 2001. "We have generations of people moving exclusively to cellphones, and there is no practical way for creditors and debt collectors to communicate with them," she said. The ACA says creditors could lose billions of dollars annually if the rule is not changed.
The National Consumer Law Center, a public-interest consumer advocacy group, has already filed an objection to the ACA's petition, saying consumers will be "hard pressed to see the benefit" because the automatically placed calls will use up high-cost daytime minutes. The NCLC added that a consumer giving a cellphone number when applying for credit shouldn't be considered as giving permission to a debt collector to call that number later.