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On August 11, 2016, the Federal Communications Commission (“FCC” or “Commission”) released an Order detailing new limitations on debt collection calls made to collect a debt owed to or guaranteed by the United States. The Order was required by the Bipartisan Budget Act of 2015 (the “Act”). The Act created the exemption from Telephone Consumer Protection Act (“TCPA”) liability for federal government debt collection calls and required the FCC to create these new rules limiting such calls.
Debt collection calls to residential numbers, as the Order notes, are considered informational calls by the Commission and are not subject to the TCPA’s prior express consent requirements. However, this is not true for calls to wireless numbers, which are an increasing segment of consumers’ primary contact telephone numbers. The Commission’s restrictions on federal government debt collection calls to wireless numbers significantly limits the exemption created by the Bipartisan Budget Act.
Specifically, the Order:
- Defines “calls made solely to collect a debt” as calls made without the prior express consent of the called party using a pre-recorded or artificial voice or autodialed calls to wireless numbers related to currently delinquent debts or debts that risk imminent delinquency due to a specific time-sensitive event effecting the amount or timing of payments;
- Finds that the time-sensitive event must be a non-routine event, meaning that calls reminding a debtor of a payment deadline are not included in the definition;
- Limits calls related to imminent delinquency to a period of 30 days or less prior to the time-sensitive event;
- Requires that calls be made only for debts currently owned or guaranteed by the United States (precluding calls related to debts that have been sold in their entirety by the federal government);
- Limits calls to the debtor or another person or entity legally responsible for paying the debt;
- Permits calls to a wireless number that:
- The debtor provided at the time the debt was incurred;
- The debtor subsequently provided to the owner of the debt or the owner’s contractor; or
- The owner of the debt or the owner’s contractor obtained independently, provided the number is the debtor’s actual number;
- Creates a one-call safe harbor for calls made to a wireless number that has been reassigned;
- Allows calls to be made either by the owner of a debt or its contractors (but not subcontractors);
- Defines a “call made” as any initiated call, regardless of whether it results in a conversation or voicemail;
- Prohibits telemarketing content from being included in the calls;
- Limits the number of calls to three per month for each type of delinquency for which a debt servicer or collector calls a debtor (callers are free to make additional calls with the debtors prior express consent or physically dialed calls with live operators);
- Requires that calls be made between 8 a.m. and 9 p.m. local time for the called party;
- Limits pre-recorded or artificial voice calls to 60 seconds (calls made by a live operator are not capped) and text messages to 160 characters or less (required disclosures, as discussed below, are not included in the 160 character limit);
- Allows consumers to opt-out of further debt collection calls at any time using any reasonable method, including orally or in response to a text; and
- Requires callers to notify the called party about the opt-out right.
The Order is seemingly incongruous with the Commission’s recent Declaratory Ruling clarifying that the TCPA does not apply to the federal government or its contractors, a point that both Commissioner Jessica Rosenworcel and Commissioner Ajit Pai pointed out in their statements regarding the Order. Indeed, it is unclear how limits on calls governed by the TCPA could apply to the federal government and its contractors if the TCPA’s prohibitions on making certain calls do not apply to the federal government or its contractors. Several petitioners have sought reconsideration of the Commission’s decision exempting the federal government and its contractors from the TCPA. In the meantime, federal agencies and contractors working to collect federal government debt are left to navigate the FCC’s new rules.
If you have questions about the FCC’s rules governing federal government debt collection calls or have questions more generally about the application of the TCPA to your business, please do not hesitate to contact Seth Williams at firstname.lastname@example.org, Jane Wagner at email@example.com, or Nate Hardy at firstname.lastname@example.org.