Debt Collectors Brace for the "TCPA Cliff"

Starting today, new rules for the Telephone Consumer Protection Act may send debt collection companies over a compliance cliff. The new TCPA rules, geared towards telemarketers, require them to adhere to strict regulations surrounding consent requirements for prerecorded or auto-dialed calls. But it remains to be seen how the courts will interpret these new regulations in the debt collection realm.

According to the new rules, telemarketers must get prior expressed written consent before they can call a consumer’s home or cell phone.

“As long as an agency is not soliciting and as long as the call or prerecorded message does not contain an unsolicited advertisement, the October 16, 2013 written consent rules will not apply,” explains David Kaminski, partner at Carlson & Messer LLP.  ”Informational calls and commercial calls without advertisements will be subject to the standard TCPA rules – consent can be obtained orally or in writing.”

Also, there is no longer an “established business relationship” exemption for residential calls. This is huge for the debt collection industry because some collection calls used to fall under the “established business relationship” umbrella.

However, one bright spot for debt collectors is that the “established business relationship” exemption was very narrow to begin with, said Becky Burr, chief privacy officer at NeuStar. It only applies to pre-recorded calls to land lines and ultimately has nothing to do with auto-dialing cell phone numbers.

The Federal Communications Commission originally issued these new regulations in February 2012. The whole package also included rules about abandoned calls, dropped calls and new opt-out requirements; these have already gone into effect.

With the recent surge in costly and damaging TCPA class action litigation, compliance with the new regulations is critical. And even though the TCPA wasn’t originally written to apply to debt collectors, the industry is far from safe. 2013 isn’t even over, and TCPA suits are up 65 percent compared to last year! In August alone, TCPA suits rose 15.4 percent from July and 72 percent when compared to August 2012.

Luckily, insideARM’s new webinar Translating TCPA for Debt Collectors – the first in our new insideCompliance series, will give you the “news you can use” about TCPA compliance in the wake of these new regulations. Learn how a law that targets telemarketers has crept into accounts receivable management. Avoid common compliance mistakes by adapting to new regulations surrounding cell phones, robo-calls and more. Our expert attorney speakers – David Kaminski and John Rossman – have tackled every angle of TCPA compliance in the courtroom and industry writings. You’ll have the chance to ask Mr. Kaminski and Mr. Rossman questions during the live Q&A portion of the webinar.

It’s an event you won’t want to miss!