Budget Deal Allows Autodialers and Robocalls in Federal Debt Collection

Davis Wright Tremaine LLP

President Barak Obama recently signed into law the Bipartisan Budget Act of 2015 (H.R. 1314), which resolved major differences between the White House and Congress, thereby funding the federal government for the next two years – and, in less noted respect, effectuating a minor amendment to the Telephone Consumer Protection Act (TCPA) that slightly expands the ability to contact consumers using autodialers or robocalls. Specifically, the Act amended the TCPA to permit calling a consumer’s cellphone via autodialer or prerecorded call when made “solely to collect a debt owed to or guaranteed by the United States.” Entities may similarly make robocalls to a consumer’s residential line when the call is made solely to collect a U.S.-owed or guaranteed debt.

The Act also requires the Federal Communications Commission to prescribe regulations implementing the amendment within nine months of the law’s enactment. It also empowers the FCC to limit through its regulations the number and duration of these debt collection calls. Despite the fact that this merely effects partial codification of an FCC allowance for autodialed and prerecorded calls to cell phones when the purpose is debt collection, a group of senators, led by Sen. Edward Markey (Mass.), have already introduced the Help Americans Never Get Unwanted Phone calls (HANGUP) Act (S. 2235) a bill that would merely restore the status quo ante and repeal the Budget Act’s changes to the TCPA.

Pending that “tack back” of the Budget Act’s amendment to the TCPA, the changes should benefit companies that guarantee federal student loans or other forms of federal debt, and who need to contact debtors regarding collections on their accounts, particularly as consumers have become more reliant on cellphones.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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