BCFP Advises FCC to Carefully Consider ATDS Definition in Context of Debt Collection

In May the Federal Communications Commission (FCC) published a Notice seeking comment on how it might re-interpret the Telephone Consumer Protection Act (TCPA) in light of the recent D.C. Circuit Court Decision in ACA International v. FCC. Yesterday was the comment deadline. Among the organizations providing input was the Bureau of Consumer Financial Protection (BCFP or Bureau). You can read their full comment here.

While the Bureau doesn't suggest specifics, the gist of the comment supports communication between consumers and collectors through modern channels,

"[T]he Bureau believes that a properly circumscribed definition of [ATDS] could be critical to fostering communications between consumers and debt collectors, servicers, and other financial service providers."

In March 2018, a court reversed several key provisions in the FCC’s 2015 TCPA expansion, including the FCC’s autodialer definition as well as the regulator’s approach to the treatment of consent and reassigned phone numbers. Many stakeholders had been waiting for the outcome of the case since it was filed by ACA International within days of the 2015 Declaratory Ruling and Order. The March 2018 decision left the FCC back at square one, with industry once again calling for clarification of the law, but hoping that this time the definition will be different.

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One might look at this and say that the Bureau does not have jurisdiction over the TCPA...and one would be correct. But in the age of mobile-only households we are seeing a convergence of laws.

First, privacy guidelines in the Fair Debt Collection Practices Act (FDCPA) -- the jurisdiction of the Bureau -- say that debt collectors can't reveal the purpose of their call until they confirm they have the right person on the phone.

Second, because of an aggressive initiative by the FCC, carriers and software companies, mobile phones are delivering more information about a call right on the screen, as the call comes in, so the consumer can decide whether to answer, hang up, delete, or complain.

Third, as insideARM readers likely know, there is widespread confusion over the concept of consent to call a mobile phone using an automated dialer: Do we have consent? What constitutes consent? Is it passed by the creditor to their service providers? How can it be revoked? While some might say the only purpose of using an automated dialer is to make more calls faster -- and they would in part be correct, automated dialers do reduce cost and allow for more calls to be made -- there are also important consumer benefits to the technology. Automated equipment also automates compliance. To expect human beings to comply perfectly with varying state and federal laws governing when, how often, and under what conditions a consumer may be called is unrealistic. 

Fourth, to require manual contact ignores consumer preference, which increasingly favors digital channels such as text, email, and private messaging. Which brings us back to the Bureau's comment, including this:

"Notably, the Bureau is engaged in an ongoing rulemaking focused on debt collectors under the Fair Debt Collection Practices Act (FDCPA) concerning debt collection practices, including calling behavior by debt collectors. Since the FDCPA was enacted in 1977, technological developments have raised concerns about the application of the FDCPA’s restrictions on collector communications with consumers. In 1977, placing a telephone call was a manual process that required a caller to dial a telephone number one digit at a time. Since then, development of predictive dialers and other outbound dialing technology has substantially reduced the cost to callers, such as debt collectors, of placing telephone calls and has enabled debt collectors to place many more calls at a very low cost. Consumers, however, consistently complain about frequent or repeated collections telephone calls.

The Bureau’s rulemaking is considering, among other topics, collector telephone calling behavior. The Bureau also is evaluating alternatives that would reduce uncertainty surrounding the use of newer technologies that could facilitate communication and conform more closely to consumers’ preferences. Input from stakeholders has helped and will continue to help the Bureau understand the practical ramifications of potential new rules. The Bureau’s goal is to develop standards which will protect consumers without imposing unnecessary or undue costs on debt collectors."

insideARM Perspective

So why is this interesting? Because, as the Bureau notes, it is currently engaged in debt collection rulemaking, and is contemplating rules that will impact collectors' ability to communicate with consumers through modern channels (those other than U.S. postal mail and landlines). We don't often get an official statement about the Bureau's latest thinking. The fact that they would state publicly that they are developing standards to address this issue is promising for the industry.