United States: FCC Issues NPRM On TCPA Exemption For U.S. Government Debt

In response to a provision in the Bipartisan Budget Act of 2015 (Pub. L. No. 114-74), the Federal Communications Commission (FCC or the "Commission") has promulgated a notice of proposed rulemaking (NPRM) regarding the new exemption in the Telephone Consumer Protection Act (TCPA) for calls made "to collect a debt owed to or guaranteed by the United States."  47 U.S. Code § 227(b)(1)(A)(iii), (b)(1)(B). The proposed language of the rule would track the statutory language.  The FCC's analysis in the NPRM, however, suggests that the Commission intends to interpret this exception narrowly, and will impose significant restrictions on calls covered by these provisions. In particular:

  • The FCC suggests that a call "solely to collect a debt" means "only those calls made to obtain payment after the borrower is delinquent on a payment."  (¶ 8).
  • While the FCC proposes that debt servicing calls would be covered, and would include calls made by the creditor and entities acting on behalf of the creditor, the NPRM also proposes restrictions on covered calls—meaning that coverage under this exemption could be a double-edged sword.  (¶¶ 9, 10)  And, only creditors and those calling on their behalf could make calls based on this exemption.  (¶ 15)
  • Permissible calls would be "only to the person or persons obligated to pay the debt because it appears impossible that calls to non-debtors by their nature would directly result in collection from the debtor."  (¶ 13)  Furthermore, the FCC proposes to import the one-call "safe harbor" for a reassigned number from the FCC's 2015 Omnibus Declaratory Ruling.  In other words, if a wireless number that a debtor provides to a creditor is reassigned, then calls to that number are not exempt, and after one such call the caller will be deemed to have constructive knowledge that "consent" to call that number has been withdrawn.  (¶ 14)
  • The FCC proposes to limit the number of covered (i.e., exempt) calls to three initiated calls to a wireless number per month—including calls that may not be answered by a person.  The NPRM reasons that three calls per month "affords callers an opportunity to obtain the debtor's consent to make additional calls beyond" any adopted limit.  (¶ 18) This would apply to robocalls to wireless numbers, including calls that attempt to connect the called debtor to a live agent.  But the FCC also suggests that it may extend this restriction to calls to residential lines "even though such calls would not have required prior express consent even before" the TCPA was amended.  (¶ 23)
  • The FCC also seeks comment on "the maximum duration of a voice call," whether there should be a limit on the length of covered text messages (¶ 18), and whether there should be a limit on the hours during which such a call could be made (¶ 19).  The NPRM suggests that the limit could be governed by the local time at the called party's location, which could create a compliance challenge given that individuals may take their cell phones to different time zones.
  • The NPRM also proposes that "consumers should have a right to stop [covered calls] at any point the consumer wishes."  (¶ 20)

Commissioner O'Reilly issued a strong partial dissent (approving solely to initiate the rulemaking required by Congress).  He noted in particular that:

  • The proposed limit on the number of calls initiated per month would be inconsistent with other federal requirements to make calls in connection with a delinquency;
  • The one-call safe harbor for reassigned numbers is inconsistent with the statutory exemption from the consent requirement for covered calls; and
  • The FCC has inappropriately limited covered calls to those pertaining to delinquency or default, while the statute refers only to calls "to collect a debt."

Finally, both Commissioner O'Reilly and Commissioner Pai (who dissented on the ground that federal debt collectors should not be afforded special treatment) criticized the proposed rules because manually dialed calls from equipment that could function as an autodialer in the future might be considered autodialed calls.

Comments on the NPRM are due on June 6, 2016.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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