In a somewhat surprising opinion issued in early July, the United States Supreme Court ruled that certain protections under the Telephone Consumer Protection Act (TCPA) extend to those who owe government debts, such as federal student loans. Previously, while the TCPA prohibited most telemarketers and debt collectors from placing auto-dialed calls to cell phones, there was an exception for those collecting debts on behalf of the government.
What is the TCPA?
The TCPA is a federal consumer protection statute relating to telephone communications. The law has been on the books for nearly three decades, inspired by early auto-dialing equipment and the barrage of consumer complaints those calls triggered. But, many consumers first heard of the TCPA in 2003, when the federal “Do Not Call” registry was created. The registry let consumers opt out of most telemarketing-type calls and imposed fines on telemarketers that failed to honor that opt-out.
Since that time, the statute has been further expanded. For most consumers today, the most significant TCPA provisions are those that limit automated calls to cell phones. The TCPA prohibits most auto-dialed calls (commonly known as “robocalls”) to consumer cell phones unless the consumer has consented to receiving calls at that number. But, telemarketers, debt collectors and others are heavily dependent on automated calling software and many people only have cell phones. That means TCPA violations are common. The federal government received 3.7 million complaints about robocalls in 2019 alone.
For telemarketers, consent requirements are strict. But, courts have taken a broad view of what is considered consent in the debt collection arena. A consumer typically doesn’t have to explicitly authorize automated calls, or perhaps calls at all. For example, a consumer who has listed his or her cell phone number as a contact number on a credit application is generally considered to have consented to receiving calls about the credit account at that number. But, consent can be withdrawn at any time. While it’s best to withdraw consent in writing for documentation purposes, even a verbal notice is sufficient.
What Happens When a Company Violates the TCPA?
The law provides for statutory damages. That means when businesses violate the law, the consumer they called may be entitled to collect damages even if they didn’t suffer any harm. Unlike many other consumer protection statutes, the TCPA allows for statutory damages on a per-incident basis rather than limiting compensation to one award per claim. Since robocallers often make repeated attempts over time–or even during the same day–violations can add up quickly.
Consumers who keep clear records of TCPA violations may also be able to use those violations as a bargaining tool in resolving the underlying debt.
Barr v. American Assn. of Political Consultants, Inc.
Interestingly, the case that ended the exception for those collecting debts on behalf of the government wasn’t initiated by a consumer being harassed with robo-dialed debt collection calls. And, it wasn’t initiated by a consumer protection group acting on behalf of consumer debtors. Instead, the case was filed by an industry association of political and polling organizations. The American Association of Political Consultants, Inc. (AAPC) didn’t want to stop government debt collectors from using auto-dialers–they wanted their members to be able to use them, too.
AAPC argued that treating different groups differently under the statute based on the content of their calls violated the 1st Amendment.
The U.S. Supreme Court agreed with AAPC on that point, but the end result wasn’t what the Association had hoped for. Rather than opening the door to AAPC and other entities using auto-dialers, the Supreme Court struck down the exception for those collecting debts on behalf of the government.
How Consumers Benefit from the New TCPA Ruling
With more than 5 million student loan borrowers in default and millions more in earlier stages of delinquency, student loan debt collection is a growing industry. While those efforts are on hold as part of the federal government’s pandemic relief plan, collection activity is slated to return to normal in October.
Those collection efforts can be aggressive. A proposed Consumer Financial Protection Bureau (CFPB) rule would limit debt collectors seeking repayment of government-backed student loans to seven calls per week, but consumer advocates have said that’s too high. The prohibition on robo-calling without consent will limit the industry’s ability to overwhelm student loan debtors with repeated call attempts–at least, as to consumers who haven’t consented to calls to their cell phones or have withdrawn consent.
Repeated calls placed for the purpose of harassing the alleged debtor may also violate the Fair Debt Collection Practices Act (FDCPA).
Stop Debt Collector Harassment
Debt collector harassment can be stressful, exhausting, and a distraction from the important work of getting your finances in order and building a more solid foundation. Fortunately, you have options. The best answer for you will depend on the type and amount of debt, the nature of the harassment, your income, and other factors.
You are not at the mercy of abusive debt collectors. At Bond & Botes, we’ve been helping people manage or get out of debt for decades. Our attorneys have extensive experience with both bankruptcy and consumer financial protection law, and can provide the information you need about your rights and options. You can schedule a free consultation right now by calling 877-581-3396 or filling out the contact form on this page.
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