U.S: No Robo-Calls, Unless You're Collecting Government-Backed Debt

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Sure, the U.S. government recently handed down strong new rules designed to protect consumers from unwanted robo-calls. But maybe some robo-calls aren't so bad. Like debt-collection calls in cases where the debt happens to be backed by Uncle Sam.

The freshly minted budget agreement between the Obama administration and congressional leaders includes one specific carve-out from existing restrictions on autodialed calls. When the caller is seeking to collect debt owed to or guaranteed by the U.S. government, it will not be necessary to get consumers' consent to robo-call them, according to the legislation.

Consumer groups that oppose the exemption face long odds in getting the language removed. The provision is buried inside a bill that would raise the debt ceiling and provide a truce in Washington's intractable partisan war over the federal budget.

Still, opponents are trying to put pressure on members of Congress to oppose the provision.

"I urge people to call their senators and representatives to tell them to remove the robo-call provision from the budget bill and prevent all of us from getting harassing calls on our cellphones," Margot Saunders, a lawyer with the National Consumer Law Center, said Tuesday in a press release.

Saunders said that the carve-out in the budget bill is similar to, but broader than, language that has appeared in recent White House budget proposals. The Obama administration's earlier budget proposals would have exempted servicers of federal student loans from robo-calling rules, while the current proposal would also apply servicers of federally guaranteed mortgages, she said.

In a research note, Isaac Boltansky, an analyst at Compass Point Research & Trading, said Tuesday that the bipartisan proposal would be a "slight positive" for federal student loan servicers and debt collectors.

In June, the Federal Communications Commission approved new curbs on robo-calls, mostly rejecting the entreaties of banks and other companies that use the calls.

The FCC's rules did not give the banking industry a break with respect to debt-collection calls, which have been the subject of a great deal of robo-calling litigation.

Now it appears that President Obama and Congress will override the FCC's judgment, but only when it comes to debt backed by the U.S. government.

This article originally appeared in American Banker.
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