The Federal Trade Commission's (FTC) Bureau of Consumer Protection issued a Staff Comment on June 16, 2016, supporting several of the Federal Communication Commission's (FCC) proposed regulations implementing amendments to the Telephone Consumer Protection Act (TCPA) for calls made to collect debts owed to or guaranteed by the federal government. The FTC’s support is troubling because, as we have previously reported, the FCC’s proposed regulations undermine Congress's clear intent to exempt such calls from the TCPA.

Last month the FCC released a Notice of Proposed Rulemaking (NPRM) regarding recent congressional amendments to the TCPA. Those amendments exclude calls "made solely to collect a debt owed to or guaranteed by the United States" from the TCPA's prior express consent requirement and required the FCC to draft regulations implementing the amendments. Rather than implementing Congress's amendments, the FCC's NPRM actually contravened Congress's intent by undermining the exception for debts owed or guaranteed by the United States.

Unfortunately, rather than addressing the shortcomings of the FCC's proposed regulations, the Staff Comment issued by the FTC embraces them, and in some cases suggests even more onerous regulation:

  • While the FCC proposed that the exception applies only when the borrower is "delinquent" on a payment, the FTC goes further by suggesting the exception only applies when the borrower is in "default." As we mentioned previously, however, there is no such limitation in the amendments to the TCPA for calls to delinquent borrowers or otherwise.

  • The FTC fully supports the FCC’s proposed limitation of the exception to calls to the intended recipient. As we have explained, this would expose callers to TCPA liability for reassigned numbers or for calls received by anyone but the intended recipient. This position is contrary to the language of the amendments, which clearly permits calls to the "called party" rather than an intended recipient.

  • Though the amendments to the TCPA removed the requirement that call recipients must give consent to be called, the FTC approves of the FCC's proposed regulation allowing consumers to stop future calls (in other words, revoke consent) and requiring that consumers be informed of their right to opt out from receiving calls.

  • The FTC fully endorses the FCC’s proposed limitation on the time of day in which collection calls can be made.

  • In its NPRM, the FCC stated that it was considering allowing calls "concerning other debts or matters about which the caller may want to speak with the debtor." The FTC argues that this extension is unwarranted.

  • To the extent the FCC is considering permitting calls for the purpose of "debt servicing," the FTC proposes disallowing any calls which "solicit any fees or consideration for the goods or services offered and limit the definition to government debts," explaining that the absence of such a rule would be a "Trojan Horse" allowing callers to discuss sales of additional products or services, or would allow collection of non-government debts.

Industry members should continue to monitor this situation carefully.

Ballard Spahr's TCPA Task Force assists clients in navigating the complex and challenging issues that arise under the TCPA. The Task Force, which comprises regulatory attorneys and litigators, provides counsel on TCPA compliance and avoiding TCPA liability, including reviewing policies and practices and helping to design mobile text message and prerecorded and autodialed call campaigns. It also assists clients in commenting on regulatory proposals and handling scrutiny from regulators, including preparing for examinations, responding to investigations, and defending against enforcement actions. Task Force members also defend clients against TCPA class or individual actions.

Ballard Spahr's Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). Ballard Spahr’s Privacy and Data Security Group provides a full range of counseling, transactional, regulatory, investigative and litigation services across industry sectors.


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