Commercial Collections Blog

Robocalls Vs Trump

According to new research, about half of all calls on cell phones in the year 2019 will be automated. Robocalls have surged in popularity over the years, with the number of calls recorded at an astounding 3.4 billion per month as of this year.

Robocalls Vs Trump FCC Rules for Robocalls

As you can imagine, the sheer volume of these calls is causing many people to stand up and take action.

Both the Senate and the House of Representatives have drafted new bills that will help curb the onslaught of automated calls, but the agency that has direct jurisdiction is the Federal Communications Commission (FCC).

Recently, the FCC has taken a hard stance on robocalls, although it has always maintained a strict policy regarding such calls.

Back in 1991, Congress enacted the Telephone Consumer Protection Act, which became law the next year. The TCPA was designed to curb telemarketing and robocalls by placing restrictions on companies that made the calls. In addition to limiting how and when they could reach out to consumers, the TCPA also forced companies to maintain “do-not-call” lists.

In 2003, the TCPA was modified to expand the “do-not-call” list to be a nationwide registry. Before this, each company had to maintain an individual record, which meant that consumers had to opt out with each new enterprise. Now, with a national registry, people could be on the list and be removed from every telemarketing company in the country.

More recently, an Obama-era rule in 2012 forced telemarketers to get written consent from consumers before calling them, which was designed to make this process even more restrictive to these companies.

So how is it that robocalls have proliferated so much?

Unfortunately, as technology improves, so does the ability to skirt new laws and regulations. It’s never been easier for entities and individuals to make these calls from a single source. In some cases, a single person could make hundreds of millions of robocalls with simple programming.

As a consumer, you probably want robocalls to go away altogether. If you’ve been interrupted in your daily life by these calls, then you know how annoying they can be.

Unfortunately, one of the most significant issues is that legitimate businesses and enterprises rely on robocalls and telemarketing, which means that as the FCC and Congress crack down, companies that want to stay compliant are facing an uphill battle.

One such industry is debt collection.

Although most people assume that debt collectors have ulterior motives, the fact is that many of these businesses are only trying to help people manage their debts and fix any outstanding balances. One of the best ways to help consumers get out of debt is by informing them of the problem in the first place, which can’t always happen under the FCC’s new rules.

Part of the issue is the definition of an automatic dialer. On the one hand, if the definition is too broad, then many companies could perform these robocalls legally. If it’s too narrow, then almost all calls will be blocked, even those that have consent from the user.

ACA International, a trade group that speaks on behalf of debt collectors, say that with the new regulations, many legitimate calls are being mislabeled or blocked altogether. According to the organization’s data, about 78% of members’ calls are not getting through. Overall, collectors are having less success in reaching consumers.

Again, from the other side of the equation, people may hail that as a positive thing. However, ignoring debt doesn’t make it go away, it only makes matters worse. When legitimate debt collection calls are getting blocked, consumers will just get into more debt, which can then spiral out of control until it’s too late to fix the problem.

As an alternative, ACA International and other organizations are called the FCC to halt its restrictions temporarily until better rules, and a more comprehensive system can be developed and implemented.

Consumer Protections vs. Scammers

Unfortunately, the debt collection industry is going to be taking the unpopular side no matter what. The reality is that there are plenty of scammers out there trying to steal people’s money, so all of the legitimate calls are lumped in, and many people assume that they’re the same thing.

On the one side, consumer advocacy groups say that debt collectors are contributing to the problem. Almost half of all automated calls were from collectors or telemarketers, which, unfortunately, means that many of those solicitations were probably illegitimate.

Still, with comprehensive legislation and better oversight, scammers can be restricted while real businesses and debt collectors who are trying to help consumers can still reach their audience.

Ajit Pai is the current chairman of the FCC (Trump’s appointee), and he has publicly stated that one of his top priorities is fighting the robocall epidemic. With billions of these calls made each month, no one is arguing against taking some type of action. However, right now, the restrictions are not taking various factors into account.

Listening to Consumers and Businesses

Recently, the FCC opened up to the public to get responses on how to better address the issue of robocalls. Many consumers and watchdog groups called for more regulation and tighter restrictions, meaning that the voice of legitimate businesses is only getting drowned out again.

However, Ajit has already shown that he is open to “light touch” regulation, as illustrated by his rollback of net neutrality laws. When looking at the impact that automated calls have on the debt collection industry, he may decide that more nuanced regulations are better for everyone, including both companies and consumers.

To illustrate how well-automated calls are working for debt collection, the industry saw a 42% increase in collections in 2016 compared to 2013. Over $67 billion was received, meaning that a lot of consumers were able to manage their finances and reduce their debts by a substantial margin. When you consider the benefit that less debt can have, it makes sense to allow legitimate debt collectors to continue their efforts.

The big question looming over the industry right now is “who will the FCC listen to the most?”

Will the Scammers Win?

Unfortunately, right now it seems like the scammers are winning more than anyone. Over 1.8 billion calls in August of this year were tied to scams, and collectively, they make millions of dollars, especially from immigrant communities.

The most significant challenge is that the scammers are much more aggressive than in years past. Part of that is the ubiquity of cell phones, along with the increasing number of scammers that originate overseas. When you merge the two, it creates a perfect storm of a profitable enterprise with little risk.

Technically, all unsolicited robocalls are illegal in this country (remember the 2012 amendment to the TCPA?); however, that doesn’t seem to be stopping scammers from making record numbers of calls. 2017 was the worst year ever, with over 30 billion robocalls collectively.

With so many negative experiences, the damage may already be irreversible. Many consumers avoid answering unknown numbers, and as scammers get more creative, that problem will only worsen. One recent trend is “neighborhood spoofing,” where scam calls originate from a local area code to trick people into answering. Unfortunately, as that has become more prolific, fewer consumers are answering at all.

In one case, a Nobel Prize recipient let the call notifying him of the award go to voicemail because he assumed it was a robocall. In many other instances, local businesses, including physicians, let potential emergency calls go to voice because they don’t want to answer the phone.

The FCC has also made a list for consumers on how to curb the threat of robocalls, and the first item on the list is “Don’t answer calls from unknown numbers. If you answer such a call, hang up immediately.”

With that kind of response, legitimate businesses and debt collectors may be out of luck, even if the new regulations are suspended or improved to allow the “right” traffic through.

Bottom Line – Robocalls are Bad for Business

Right now, Burt and Associates thinks the future of this problem doesn’t look too bright. With so many scammers and so few ways to block them (for now), the call for stopping the issue is going to be louder than the call for businesses like debt collectors to let their calls go through.

Until we can figure out a solution that blocks scammers and ensures that only legitimate calls make it to the consumer, everyone but the scammers will lose.

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