The FCC’s 2016 BBA Implementing Ruling Digested (Volume I): The 10 Things You NEED to Know Before Making Calls to Collect on Government-Backed Debt
On August 11, 2016 the FCC issued its long-awaited ruling implementing the 2016 Bi-Partison Balanced Budget Act (“BBA”) Amendment that carved out collection calls on government-backed debt from TCPA coverage. In re Rules & Regulations Implementing Telephone Consumer Protection Act of 1991 (August 11, 2016) FCC 16–99 (“2016 FCC BBA Order”). The 2016 FCC BBA Order can be found here.
To quote Commissisoner Pai, the FCC’s ruling makes a “dog’s breakfast” of the exemption and the TCPA. While Congress obviously intended to make it easier for collectors to place calls to debtors owing on federally-backed debt, the Commission’s restrictive ruling does exactly the opposite. The Comission invents and mandates onerous restrictions on the number, duration and content of calls—even requiring specific affirmative disclosure of a consumer’s right to revoke calls.
Several blog entires will follow in the next handful of weeks exploring the tidal forces at work in the Commission’s ruling but here are the things you absolutely NEED to know:
- The Broadnet ruling was a trap. Even though the FCC just ruled last month that the federal government is not a “person” subject to the FCC, the Comission has, nonetheless, ruled that the restrictions of its rules implementing the BBA still apply to the government and its contractors. FCC BBA Order ¶ 31. (It is literally impossible to justify this portion of the ruling, but that will be explored in future posts.)
- Callers Using the Exemption Must Affirmatively Advise Consumers of their Right to Opt Out of Future Calls—The Comission ruled that callers must affirmatively notify the call recipient of his/her right to opt out of future calls. FCC BBA Order ¶ 40 (“The caller must affirmatively notify the call recipient of his/her right to opt out of future calls.”) This affirmative disclosure rule applies to live calls, pre-recorded messages and text messages.
- Only three attempts per month are permitted under the rules—it matters not whether the consumer is reached during those attempts. FCC BBA Order ¶ 33.
- We still don’t know what debts are “owed to or guaranteed by the United States”—the primary question industry wanted answered in the ruling was what debt is covered by the BBA. The Comission refused to answer that question. 2016 FCC BBA Order ¶19 (“Because we lack a developed record on the issue, we do not seek to define or determine with particularity exactly which debts are included in or excluded from this phrase.”)
- But, debt that is “insured” by the federal government is not covered—the FCC did clarify that only debt “guaranteed” by the government is subject to the exemption; debt that is merely “insured” by the government is not. 2016 FCC BBA Order ¶ 19, fn 54.
- Only “the debtor or another person or entity legally responsible for paying the debt” may be called—Calls are not permitted to other persons listed on the debt paperwork, “such as references or witnesses.” 2016 FCC BBA Order ¶ 21.
- The caller must honor all revocations and track them so that future collectors do not violate the opt-out request—A stop-calling request transfers with the debt; “[b]ecause the stop-calling request for federal debt collection calls applies for the life of the debt, servicers and collectors must ensure that information regarding the request conveys with the other relevant information regarding the debt when it is sold or transferred between servicers or collectors.” FCC BBA Order ¶ 39.
- Artificial-voice and prerecordedvoice calls may not exceed 60 seconds, exclusive of any required disclosures—but there is no cap on the duration of live-caller, autodialed calls made pursuant to the Budget Act exemption. FCC BBA Order ¶ 46.
- Calls may only be placed between 8:00 a.m. to 9:00 p.m.—local time at the called party’s location. FCC BBA Order ¶ 48
- The Order goes into effect on October 10, 2016. 2016 FCC BBA Order ¶ 60. It is unclear whether calls being made today are currently exempted in any form or fashion. The Comission apparently does not believe so. (See discussion in 2016 FCC BBA Order ¶ 60.)
Bonus item: all of the TCPA’s impossible-to-comply-with rules regarding wrong numbers and recycled cell phone numbers still apply to calls placed using the BBA exemption. 2016 FCC BBA Order ¶ 25. This is true although the exemption does not require express consent of the called party to place the calls in the first place.
If you find yourself struggling with these rules, you’re not alone. We’re here to help you through it, however. Feel free to give us a call.