Debt collectors will be able to robocall cell phones under a provision added to the budget in closed-door negotiations GovTrack.us Follow Oct 30, 2015 · 3 min read

Offsetting spending by debt collection

In an attempt to offset spending increases, the budget deal moving through Congress would allow debt collectors to make robocalls to people’s cell phones in order to collect student loan debt or other debt that is owed to, or guaranteed by, the U.S. government.

The provision, Section 301 of the Bipartisan Budget Act of 2015, would add a new exemption to the Telephone Consumer Protection Act’s ban on the use of computerized equipment for dialing cell phones for calls with the sole purpose of collecting debt that is owed to the government. It would also give the Federal Communications Commission (FCC) new authority to regulate the number and duration of debt collection robocalls made to cell phones.

The FCC would be required to issue rules to regulate debt robocalls to cell phones within 9 months. The Commission has for years resisted pressure to issues rules allowing debt collectors to use automated systems for calling cell phones, and they have even ruled recently in somewhat of an opposite direction — affirming customer’s rights to control what calls they receive and clarifying that phone companies can allow customers to use robocall-blocking technology.

Unlike with landlines, cell phone owners are typically responsible for paying for incoming calls and texts. An increase in the volume of debt collection calls could present a financial burden to phone owners, especially to low-income individuals.

The budget bill containing the provision passed the House of Representatives on Wednesday by a vote of 266–167 and passed cloture in the Senate today 63–35.

How the provision got added

The debt robocalls provision was added to the bill during closed-door negotiations between White House officials and congressional leaders from both chambers, including former Speaker of the House John Boehner (R-OH).

After the deal was announced, the incoming Speaker of the House, Rep. Paul Ryan (R-WI), denounced the secretive process by which it was drafted.

“I think this process stinks,” Ryan told reporters. “This is not how we do the people’s business, and under new management we are not going to do the people’s business this way.”

President Obama has supported allowing debt collector robocalls for several years and he has included language to do so in his last few budgets proposals for Congress.

On October 1 the Education Department recommended robocall authority for debt collectors in a report entitled, “Strengthening the Student Loan System to Better Protect All Borrowers.”

“Congress should change the law to ensure that servicers can contact borrowers using modern technology and help them get into the right repayment plan and avoid the consequences of default or resolve their default,” the report stated.

More than $44 billion in federal loans are currently in default, according to the report, but the Obama administration only estimates that $12 million to be recovered by the government on an annual basis from the new robocalls.

The Association of Credit and Collection Professionals, a trade group that represents debt collection companies, including some employed by the government to collect student loans, has been lobbying for robodialing authority for years. They have spent more than $4.3 million lobbying the federal government since 2008, and they’ve lobbied more on “telecommunications” matters in 2015 than on any other issue. Their disclosures list “FCC regulation,” “modernization of the Telephone Consumer Protection Act,” and “TCPA reforms on non-marketing calls” as specific issues discussed.