Both telemarketing and debt collection are, quite literally, risky businesses. Both fields are highly regulated, governed by complex legislation, and subject to potentially expensive penalties and litigation. Compliance in either field is complicated enough on its own but compliance for debt collectors who use telephone solicitation in order to conduct their business imposes difficulties to an extent beyond the mere sum of the complexities of either field on its own.
Telephone solicitation for the purposes of debt collection requires maintaining compliance with four different, interrelated laws. The Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA) have specific rules directly relevant to telemarketing collections; while the Fair Credit Reporting Act (FCRA) and the Truth In Lending Act (TILA) apply to the credit industry more generally.
We offer a number of debt collection compliance solutions that could be especially useful for collections professionals.
Don’t call known litigators and serial plaintiffs. The easiest way to avoid a lawsuit is to not contact the people who are most likely to sue. TCPA, FDCPA, FCRA, and TILA litigators and professional plaintiffs can find their way onto your call lists (litigators can have debts just like anyone else). The best defense is to remove these predatory individuals from all calling lists before reaching out.
Right Party ID℠
Another key to avoiding violations is ensuring that you are calling the right party. Verify your consent with the called party by confirming their current contact information.
In addition to verifying your contact information, we can help you fill out incomplete contact info. Do you have a name but no phone number? Or vice versa? Do you need to find a contact's social media handle? Our Data Appending services could serve you well.
Frequently Asked Questions
How does TCPA compliance apply to debt collections?
There is occasionally a mistaken assumption that debt collection is exempt from the TCPA. However, the TCPA’s regulations apply to debt collection call centers in the same way that they apply to other sorts of telemarketing. That means debt collectors must abide by the statute’s call time restrictions (8 am - 9 pm, recipient’s local time) and rules regarding consent. If you are using an autodialer to call cellphone numbers (as well as VoIP numbers, fax numbers, and anything else where the recipient may be charged on a per-call basis), you must have the recipient’s prior express consent. Courts have generally accepted the argument that, for the purposes of call center collections, a consumer gives express consent if they provide their phone number in the course of conducting the transaction that resulted in the debt being owed.
Is there a TCPA exemption for collection calls on government-backed debt?
There was such an exemption from 2015 until 2020 but is no longer in effect. In 2015, Congress added an exemption to the TCPA’s prohibition on the use of autodialers for calls “made solely to collect a debt owed to or guaranteed by the United States.” The next year, the American Association of Political Consultants (AAPC) filed suit against the FCC over this new exemption. The case made its way through the court system until the summer of 2020, when the Supreme Court determined, in Barr v. AAPC, that the government debt exemption was an unconstitutional, content-based restriction on speech. SCOTUS severed the government debt exemption from the TCPA as a whole.
Who is covered under the FDCPA?
According to the Federal Reserve, “The FDCPA defines a debt collector as any person who regularly collects, or attempts to collect, consumer debts for another person or institution or uses some name other than its own when collecting its own consumer debts.”
What types of debt are covered under the FDCPA?
According to the Federal Reserve, “The FDCPA applies only to the collection of debt incurred by a consumer primarily for personal, family, or household purposes. It does not apply to the collection of corporate debt or debt owed for business or agricultural purposes.”
What types of communications are governed under the FDCPA?
The FDCPA governs communications between debt collectors and debtors conducted via, mail, e-mail, text message/SMS, voice calls, and social media.
What government agency is responsible for enforcing debt collection laws?
Created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Consumer Financial Protection Bureau (CFPB) is the primary enforcement agency for most debt collection regulations, including those associated with the FDCPA, FCRA, and TILA. The FTC also plays a role in enforcing the FCRA. For more information see our debt collection compliance guide.