FCC Rule Adoption to Allow Autodialer Calls to Cell Phones for Debt Collection

The Federal Communication Commission (FCC) Wednesday announced that it had formally adopted a proposed change to the Telephone Consumer Protection Act (TCPA) regarding the use of autodialers and pre-recorded messages in calls made to cell phones.

Importantly for the ARM industry, the FCC dropped a proposal that would have required prior express written authorization to call a consumer’s wireless number when utilizing an autodialer or prerecorded message for informational calls, and reiterated that debt collection calls were considered informational calls.

In 2010, the FCC released a Notice of Proposed Rulemaking (NPRM) implementing the TCPA that would have required prior express written consent even for non-telemarketing calls placed to cell phones, such as those made by third-party collection agencies on behalf of their clients. Collection industry trade group ACA International and a group of similarly impacted industries formed a coalition to combine efforts to advocate for reconsideration of the potentially onerous rule.

The coalition successfully secured letters from members of both chambers of Congress urging the FCC to change their position on the proposed rule before making it final. Moreover, ACA filed several formal comments with the commission and directly engaged with FCC officials urging that the agency not impose a prior express written consent requirement on non-telemarketing calls.

The final rule exempted informational calls from the prior express consent requirement. While the rule does not specifically carve out debt collection calls, it does concede that the calls are considered informational in nature.

“Because the Commission determined that debt collection calls are not telemarketing calls, it concluded that a specific exemption for debt collection calls was not warranted,” according to language in the rule.

The standard for consent in debt collection calls to cell phones was defined in a 2008 declaratory ruling by the FCC which stated that “the provision of a cell phone number to a creditor, e.g., as a part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.”

The new rule does provide stronger protection for consumers against telemarketing calls to cell phones using autodialers. Most significantly, the rule drops an “established business relationship” exemption for telemarketers which used as a loophole to autodial customers they had previously done business with. The rule also requires telemarketers to provide an automated opt-out mechanism for cell numbers.