When you receive a phone call on your cell phone from an unfamiliar number, do you answer the call? Soon you may not want to since debt collectors may be able to call using cell phone numbers. Right now, these calls are largely prohibited, but the President and Congress are considering allowing these calls to be made in the future.
Supporters feel that regulations have not kept pace with technology since many consumers now exclusively use a cell phone and no longer own a landline. Opponents think the allowing these calls will lead to consumers being bombarded with nuisance calls.
In favor of cell phones contact
Originally, cell phones were off limits primarily to preclude telemarketers from auto-dialing consumers and causing the consumer to be charged a steep price for the unwanted incoming calls. Over the years, however, cell phone payment plans have changed drastically with most plans currently charging a flat fee or a much lower per minute rate.
As of now, debt collectors are allowed to call cell phones if they manually dial the number. President Barack Obama seeks to change the law so that consumers can be contacted on their cell phones using auto dialers if they are delinquent on government debt. These debts could include taxes, student loans and government-backed mortgages. He feels this change would cause a substantial increase in debt collections. A bipartisan bill introduced recently in the House is farther reaching, allowing collectors to use auto dialers and recorded messages to reach cell phone users.
About 40 percent of consumers currently use a cell phone as their primary or only phone. This percentage is even higher amount the 20 to 30-year olds. The group of cell phone only consumers will likely grow bigger and bigger as the younger generation continues to age. Being able to contact these people will be much easier if the new laws are passed. .
Opposed to cell phone contact
Consumer advocates remain opposed to the changes because they fear the new law will open the floodgates to intrusive calls to cell phones. This argument caries a lot of weight when considering unsolicited telemarketing calls. However, the proposals under consideration are for debt collection calls where consumers who apply for credit are making a promise to pay back what they borrow or spend. They also agree they can be contacted by the creditor if there is an issue, whether it is for fraud protection or to notify of a late payment.
Lowering Costs for Everyone
The creditor and debt collectors need to be able to contact the borrower if there is a problem, and if the cell phone is the only way, then this is an important right for creditors. If creditors cannot reach their customers by telephone, this substantially increases overall collection risk. If this risk increases, creditors will have to charge more to all customers to cover the increased losses associated with people who owe money and only have cell phones.
The ability to use auto-dialers lowers the cost of making collection calls. This lower cost is passed on by creditors to their clients. Companies are always looking for ways to have technology lower costs so they can control prices, and the old restrictions on calling cell phones are now keeping some costs unnecessarily high.
Commercial collections – how can they make contact?
Commercial collection agencies (i.e. agencies that collect on business to business debt) often have to call cell phones. Many small businesses also do not have land-lines and their main phone number is a cell phone. When businesses provide a cell phone as the primary or exclusive point of contact, creditors and their debt collectors must be and are allowed to call this provided number.
It is not uncommon to have difficulty reaching a small business owner by phone at the primary business line (whether cell phone or land line) when they are behind on their bills. Creditors cannot just give up on money owed because they can’t reach the appropriate business person at the main phone number – this would be too costly.
Some commercial collection agencies are very skilled at locating potentially good alternative cell phone numbers for business owners. However, until the number has been verified as accurate, care must be taken as to what is said during a call or when leaving a voice message. Regardless of the current law, auto-dialers should not be used for a variety of best practices reasons. It takes a skilled debt collector to listen to the person answering the phone or to the message for the phone to determine if it is the correct or potentially correct contact information. Any communication with the person answering or any message left must not reveal private information until the phone number is confirmed to be correct. Computers can improve efficiency, but they can’t completely replace people.
Not all commercial collection agencies follow these best practices. One reputable agency that never uses auto-dialers is The Kaplan Group.