Calls Emerge for Modernizing Law on Collections
Waggoner, Darren, American Banker
Byline: Darren Waggoner
Lawmakers, consumer groups and the debt collection industry agree on at least one thing: The Fair Debt Collection Practices Act, the key law governing how collectors behave, needs updating.
Congress enacted the law in 1977, long before voice mail, cell phones and e-mail became a part of daily life.
It has been updated but not sufficiently to account for the use of evolving communication technologies, according to several industry experts.
Collectors perceive as detrimental what little clarity exists under the law.
Under the Telephone Consumer Protection Act and an order released by the Federal Communications Commission in 2008, debt collectors must get prior permission to contact consumers on their mobile devices.
The industry wants full access to these newer technologies without having to get consumers' consent beforehand.
The consent requirement hampers collection efforts because many consumers do not have landlines, collectors say.
"As an industry we are disappointed at the inability to call consumers on the only phone they have. It only means more lawsuits if we can't contact them," said Robert Markoff, the president of the National Association of Retail Collection Attorneys and a partner at Markoff & Krasny in Chicago.
Twenty-one percent of the U.S. population lacks a landline, and this percentage is growing, said Valerie Hayes, the vice president of legal compliance and government affairs at ACA International, a trade group for collectors.
There are now nearly twice as many cell phones as landlines, and the number of landlines is going down by 3% to 5% a year, said Alan Berrey, the vice president of text and mobile messaging at SoundBite Communications, a company that sells multichannel plans for customer communication.
The Federal Trade Commission, however, is recommending that the law retain the requirement for consumer permission. …