The Federal Communications Commission issued rules Thursday restricting companies from bombarding Americans with cellphone calls to collect any money owed to or guaranteed by the government, including federal student loans, mortgages and taxes.
“Consumers want and deserve control over the calls and text messages they receive,” said FCC Chairman Tom Wheeler, in a statement. “It is vital that we continue to use all the tools at our disposal to help protect consumers against unwanted calls.”
The new rules tighten a provision that was tucked into last fall’s congressional budget deal, amending a law meant to protect people from being harassed or inundated with text messages and calls that could run up their cellphone bills. Consumer advocates were livid at Congress for sneaking in a proposal that many said would unleash a deluge of unwanted calls and place a financial burden on people of modest means with limited cellphone plans.
Advocacy groups pressed the issue with the Department of Education, which initially argued that its student loan servicers — the middlemen that collect and apply payments — would have a better chance of helping borrowers avoid late payments with access to their cellphones. Although the department has held fast to its position, officials this summer began encouraging the FCC to limit the number of calls. Around the same time, Democratic lawmakers pleaded with the commission to impose additional protections to prevent abusive behavior.
“No matter where they originate, robo-calls are intrusive and disruptive,” said Sen. Richard Blumenthal (D-Conn.), who along with Sen. Ed Markey (D-Mass.) wrote the FCC in July. He said he was pleased the commission heeded the call “to adopt critical safeguards that will protect veterans, students, farmers … from an unstoppable onslaught of robo-calls.”
The FCC capped the number of calls debt collectors can make to wireless phones to three a month. The agency also said calls can only be made to borrowers, not their family or friends. Companies must notify people of their right to request that calls stop and cease all calls upon that request.
“Limiting servicers to three call attempts per month is far too restrictive to fully assist student loan borrowers,”said Michele Streeter of the Education Finance Council, a trade group representing nonprofit and state-based student loan servicers. “In general, it takes several call attempts simply to establish live contact with a borrower, and multiple conversations to help the borrower … resolve their delinquency or default.”
Student loan servicers and debt collection agencies lobbied the FCC for the better part of a year to exempt federal student loans from the Telephone Consumer Protection Act, a law that bars the use of auto-dialers to call and text people on their cellphones without permission.
In April 2015, Nelnet, one of the department’s largest servicers, sent the agency a letter insisting that people who consented to its robo-calls stood a better chance of remaining up to date on student loan payments. Nelnet is among a handful of companies, including Navient and American Education Services, paid millions of dollars by the federal government to handle payments, answer questions and help people avoid defaulting on their loans. Since their pay is aligned with their performance, the more people they keep current the more money they make.
Despite even President Obama’s support for loosening the robo-call rules, the FCC has remained vigilant in its opposition to changing the law. The agency made it easier last year for telecom companies to use block autodialed calls and text message. It also established stricter definitions of autodialing to prevent telemarketers from sidestepping the rules.
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