Tentative Budget Pact Will Allow Robocalls to Debtors' Cell Phones
A tentative budget deal struck on Monday by the White House and Congressional leaders will result in some irritating consequences for Americans with student loan debt.
The new provision would give debt collectors permission to robocall and auto-text the cell phones of borrowers. While consumers with cellular phones who have not given permission for companies to contact them on their mobile devices are typically protected under the Telephone Consumer Protection Act, auto-dialed calls would be completely legal to place to borrowers who have not given their consent to do so.
Why is this a problem? Not only will borrowers have to deal with having their phones bombarded with unwanted text messages and calls, but they will also be charged for them. Unlike a landline, many cell phone users pay for a certain amount of minutes and text messages each month, and would now have to face acceptance of charges for creditor harassment. For low-income individuals relying on prepaid cell plans, this is a serious concern.
President Obama has pushed for this new legislation, arguing that it will lead to higher recoveries on delinquent student loan debt. The student loan industry, naturally, is also enthusiastic about these changes. In addition, the Education Department is expected to boost their profits by being able to employ less workers to hand-dial borrowers’ cell phones.
So far, there is very little evidence that this move will do anything to avert loan defaults or increase collections. If this pact is enacted into law, the Federal Communications Commission (FCC) will be required to write new rules within nine months.
Chicago Consumer Attorneys Fighting for Your Rights
Over 40 million Americans have federal student loans, and nearly 7 million are currently in default. Since nearly half of Americans rely solely on cell phones, this new legislation is expected to affect a large number of people. If you are struggling with student loan debt and are being harassed by collectors, please consult with a Chicago consumer lawyer at Atlas Consumer Law We are prepared to advise you on the best course of action during a consultation.
Request your consultation with a member of our award-winning firm by calling us at (312) 313-1613.