Feds Considering Exemptions to Illegal RoboCall Rules

Washington, DCYou’ve heard it before: what the government giveth, the government taketh away. That’s the crux of a divergence of goals and protections that pit one arm of the federal government against the other in the name of collecting delinquent accounts. The result is a major crack in an armor intended to protect Americans already under siege from illegal robocalls.

Here’s the rub. Agencies such as the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) work in various capacities to shield consumers from harassment through protections such as the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA) of 1991. Just this month the CFPB, in recent days, released an “Outline of Proposals under Consideration and Alternatives Considered” with an eye towards further regulation of the debt-collection industry - the people mostly responsible for debt collector harassment and illegal telemarketing calls.

For its part, the FCC maintains a regulation that states no entity trying to sell you something - or collect from you - is allowed to auto-dial you on your cell phone without your permission. Unlike a land line that permits unlimited incoming calls (unless they’re long distance collect calls), cell phones are governed by data plans that may, or may not have a cap on the number of minutes or texts you are allowed to use.

But there could be a chink in the armor, and it’s coming from within the government itself. The Federal Housing Finance Agency (FHFA) is asking the FCC for an exemption that would allow mortgage companies chasing delinquent accounts to reach out via robocalls to cell phones in an effort to collect.

The mortgage industry views this - as does FHFA, apparently - as a responsible way to service delinquent accounts and help avoid the kinds of foreclosures that were seen amidst the horrors of the 2008 housing bubble crash.

It’s turning into a classic clash of priorities. The federal government wants mortgage companies to be more proactive, in order to avoid the kind of mortgage meltdowns seen eight years ago. The feds also want to protect consumers from illegal robocalls and the Robocall lawsuits that often (and increasingly) result. And yet an arm of the government, FHFA, is asking the FCC to relax the rules.

The FHFA explains it this way: “Avoiding foreclosure requires mortgage servicers to work directly with individual loan borrowers, typically through telephone contact,” FHFA General Counsel Alfred Pollard wrote in a June 6 letter to the FCC, excerpts of which were published in National Mortgage News (8/1/16).

“The efficient and early resolution of a delinquency to avoid foreclosure is the key to ensuring a borrower does not lose his or her home.”

However, consumer advocates aren’t buying it. “This is an alarming and fairly absurd proposal,” the National Consumer Law Center wrote in a comment letter on behalf of various other consumer and legal aid organizations. Senator Sherrod Brown (D-Ohio) also questioned FHFA’s proposal in a statement: “I’m concerned that the FHFA is pushing to subject Americans to more computer generated phone calls and texts rather than ensuring servicers offer foreclosure alternatives.”

Consumers reeling from a non-stop parade of illegal robocalls and other forms of debt collector harassment - sometimes for debt they don’t even owe, or have long since retired - have little choice but to turn to the courts through telemarketer lawsuits.

Little wonder, given that the FTC fields more than 170,000 complaints about illegal telemarketing calls every month - and in 2015 racked up more than 900,000 complaints from consumers grousing about debt collectors.

It also seems that so-called ‘Do Not Call’ lists have little effect either. Many consumers wind up filing a do not call list lawsuit as well, in an effort to fight back.

In the meantime, government agencies considering the allowance of exceptions to the rule while continuing to pledge increased protections for consumers, are effectively allowing the barn door to be opened just enough to allow a full-fledged stampede.