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Back to the Future: What the ACA Versus the Federal Communication Commission Means for the Debt Servicing Industry

While robocalls are a nuisance, phone calls are the primary way businesses and debt servicers can reach people to talk about payment plans. Technology has rapidly changed the way businesses operate, and the laws are still catching up. That’s why a recent ruling regarding how AR departments and collectors reach people is making waves.

As collectors may remember, on July 10, 2015, the Federal Communications Commission (FCC) issued a TCPA Declaratory Ruling and Order related to auto dialers, reassigned phone numbers, and revocation of consent. The ruling was in response to several petitions seeking relief or clarification regarding the Telephone Consumer Protection Act (TCPA).

Definition of an Autodialer
When revealed, the ruling redefined what equipment fell within the definition of an “auto dialer.” The ruling also defined specific liability for calls to reassigned numbers, provided consumers the right to revoke consent by any reasonable means, and established new exceptions for financial and healthcare-related calls.

All of these issues had an immediate impact on the debt servicing industry — with the most prominent being the definition of an “automatic telephone dialing system” (“ATDS or “auto dialer). The definition of an “ATDS” issued in the order expanded the definition completely outside of the realm of the “TCPA” by not only including how an “ATDS” was currently being used but also what it had the future capacity to do.

By this definition, a “smartphone” would be considered an “ATDS” — thus when anyone made a call to a number stored in their smartphone, they would be in violation of the TCPA. Needless to say, this had a dramatic impact on the debt servicing industry and further inhibited our ability to service an increasing inventory of accounts with only cell phones. (More than 50 percent of U.S. households are now cellphone-only, with no landline, and that number is expected to increase.)

Petition for Change
Immediately after the order was released, ACA International, along with several other petitioners, filed an appeal to the D.C. Circuit Court of Appeals. The appeal addressed primarily the four prongs of the order outlined above.

After a very long wait, the D.C. Court of Appeals finally issued its decision March 16, 2018. While upholding the FCC’s ruling on revocation of consent and exceptions for certain financial and healthcare-related calls, it set aside both the definition of an “ATDS” and the reasonableness of the one-call “safe harbor” for calls placed to reassigned numbers. In its decision, it essentially stated the definition of an “ATDS” was too broad as well as the “one strike” rule for calling reassigned numbers was not practical.

Although this decision was great news for our industry, it was certainly not permission to load cell phones into dialers and start dialing away. To some degree, we are back to 2015 again, seeking clarity on the TCPA and its definition of an “ATDS” in addition to how to communicate with a rapidly expanding network of cell phones and the technology that often accompanies them.

Navigating the Future as Technology Evolves
What the decision does is set the framework for the FTC, FCC, and our industry to begin discussion on developing reasonable legislation on permissible uses for legitimate phone calls made to cell phones using today’s technology. Our industry realizes that illegal “robocalls” to consumer’s cell phones are a nuisance and fully support practical legislation that affords consumer protection. The decision will also provide a defense to the absurd number of TCPA lawsuits that flooded the courts after the FCC 2015 order, a lot of which were stayed pending this decision. In fact, there has already been a win for our industry as a Nevada Court recently granted Summary Judgment in favor of a collection agency on a TCPA claim based on the ACA v. FCC Decision.

So for us, it’s still business as usual as we again wait on reasonable and practical legislation that will allow us to communicate with consumers using today’s technology and in ways today’s consumers want to communicate.

Please continue to get TCPA consent from your customers and make sure you have processes in place to handle the revocation of consent for your staff and your business partners.