Federal Communications Commission Sets Limit on Robocalls from Companies Collecting Debts
The Federal Communications Commission put in a new rule to protect student loan borrowers. The new rule puts a limit on the number of robocalls companies collecting debt on behalf of the government can make to borrowers without their permission.
Last Thursday, the Federal Communications Commission put in a new rule to protect student loan borrowers. The new rule puts a limit on the number of robocalls companies collecting debt on behalf of the government can make to borrowers without their permission. The new rule combated an exception to the Telephone Consumer Protection Act that was implemented last year by Congress. This exception allowed for companies to robocall borrowers with student loan debt on their mobile devices without their express consent.
The loan servicers are telling a very different story, however. Loan servicers believe with the ability to robodial borrowers without their permission would allow the servicers to inform borrowers that need help. Many of borrowers that are being called are nearing default and possibly don’t know how about programs that can help. Even the Department of Education has argued that borrowers might be struggling because data suggests that most borrowers who could benefit from repayment programs don’t use them.
Despite this, the new rule states that loan servicers can only call borrowers three times a month without their permission. The rule also states the borrower can choose to revoke the right to be called at all by the servicer. The new robodial rule also addresses that the servicers may only call the debtor and only if they are delinquent or in “imminent risk” of delinquency. Which is defined as within 30 days of missing an important deadline that could affect the timing or amount of payments due.
Even though the FCC rule aims to protect borrowers, James Bergeron, the president of the National Council of Higher Education Loan Resources, doesn’t feel the same way. The president of an industry trade group representing debt collectors and student loan servicers has come out saying the new rule will, “provide virtually no benefit to the millions of student loan debtors struggling to repay their loans.” Even Navient, one of the largest student loan servicers put out a statement saying, “It appears the FCC has let down at-risk student loan borrowers by placing barriers between them and ways to hear about their options to avoid delinquency and default.”
Both sides of this argument are adamant the other is wrong. Have the borrowers been saved from nagging, loan-shark-like calling patterns? Or has the Federal Communications Commission let borrowers down by not allowing for the proper amount of help from loan servicers? Either way, the Department of Education claims they will do their best to help borrowers, “avoid default – and the harm it can do to their finances – if we can reach them.”
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