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Lawmakers, consumer groups and the collection industry agree on at least one thing: The Fair Debt Collection Practices Act, the key law governing how collectors behave, which Congress enacted in 1977, needs updating.
Collectors perceive as detrimental what little clarity exists under the law, which was passed long before voice mail, cell phones and e-mail became a part of daily life.
Under the Telephone Consumer Protection Act and an order released by the Federal Communications Commission in 2008, 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," Robert Markoff, the president of the National Association of Retail Collection Attorneys (NARCA) and a partner at Markoff & Krasny in Chicago, tells Collections & Credit Risk, a CCR Newsline sister publication.
Twenty-one percent of the U.S. population lacks a landline, and this percentage is growing, adds 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, says 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. The FTC has said it believes that consumers should be fully informed that they can get calls on their cell phones, and expressly consent to this, says Thomas Kane, a senior attorney at the agency.
The commission's main concern is that some consumers have restrictive wireless plans that charge for every call or text message.
"Consumers should not have to pay to be contacted by debt collectors," Kane says.
But the collection industry believes that the FTC's policy stance is too strict.
The law, adds Markoff, would be better aimed at restricting the number of calls or text messages sent weekly or monthly, particularly because it is easy to see a violation on the phone bill.
Last month, the FTC conducted the first of three workshops to examine consumer protection issues in the collection process. The industry wants additional changes in the law.
ACA International takes the position that the law's prohibition of third-party disclosure unreasonably restricts the use of e-mail and texting.
NARCA supports the FTC's decision to make changes to the FDCPA. However, the association's key concern is that current public policies create roadblocks to consumers re-paying their debts, encouraging consumer attorneys to file lawsuits in what the association refers to as "extortion litigation.
At press time, no bill had been introduced in the House or the Senate.
