The Federal Communications Commission (FCC) recently clarified "that the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government's instructions."
A copy of the FCC's Declaratory Ruling 16-72 is available at: Link to Declaratory Ruling
As you may recall from our prior update (below), Congress amended the Telephone Consumer Protection Act (TCPA) in the Bipartisan Budget Act of 2015 to allow autodialed calls "made solely to collect a debt owed to or guaranteed by the United States" without the prior express consent of the called party. The FCC issued a Notice of Proposed Rulemaking seeking comment on various issues relating to the amendment, and those proceedings are still ongoing.
The FCC states that this Declaratory Ruling 16-72 "does not mean that Congress's recent decision to except calls 'made solely to collect a debt owed to or guaranteed by the United States' from the prior express consent requirement was unnecessary."
Instead, the FCC in this Declaratory Ruling 16-72 focuses on the meaning of the term "person" in the TCPA.
As you may recall, the TCPA among other things makes it unlawful for "any person within the United States, or any person outside the United States if the recipient is within the United States," to place autodialed or prerecorded- or artificial-voice calls to wireless telephone numbers, except with the prior express consent of the called party or in an emergency, or unless the call is solely to collect a debt owed to or guaranteed by the United States. See 47 U.S.C. § 227(b)(1).
Stated differently, the TCPA in relevant part makes it unlawful for any "person" within the United States, or any "person" outside the United States if the recipient is within the United States, to place certain calls to landline and wireless telephone numbers, absent prior express consent, an emergency, or other exceptions.
The FCC notes that the TCPA is codified within the federal Communications Act, "which defines 'person' to 'include[] an individual, partnership, association, joint-stock company, trust, or corporation.'"
Interpreting the statutory language and other authority, the FCC ruled in this Declaratory Ruling 16-72 that "the term 'person,' as used in section 227(b)(1) and our rules implementing that provision, does not include the federal government or agents acting within the scope of their agency under common-law principles of agency."
The FCC clarified that the TCPA does not apply to "a contractor when acting on behalf of the federal government, as long as the contractor is acting as the government's agent in accord with the federal common law of agency."
More specifically, the FCC stated that "a government contractor who places calls on behalf of the federal government will be able to invoke the federal government's exception from the TCPA when the contractor has been validly authorized to act as the government's agent and is acting within the scope of its contractual relationship with the government, and the government has delegated to the contractor its prerogative to make autodialed or prerecorded- or artificial-voice calls to communicate with its citizens."
The FCC emphasized that "a call placed by a third-party agent will be immune from TCPA liability only where (i) the call was placed pursuant to authority that was 'validly conferred' by the federal government, and (ii) the third party complied with the government's instructions and otherwise acted within the scope of his or her agency, in accord with federal common-law principles of agency."
Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: rwutscher@MauriceWutscher.com
Admitted to practice law in Illinois
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On Thu, May 26, 2016 at 5:12 PM, Ralph T. Wutscher <rwutscher@mauricewutscher.com> wrote:
FYI: FCC Issues NPRM as to Calls "Made Solely to Collect a Debt Owed to or Guaranteed by the United States"
The Federal Communications Commission (FCC) recently issued a Notice of Proposed Rulemaking (NPRM) regarding recent amendments to the federal Telephone Consumer Protection Act (TCPA), seeking comment on among other things:
(1) which calls are covered by the phrase "solely to collect" under the amendments;
(2) the meaning of the phrase "a debt owed to or guaranteed by the United States" in the amendments;
(3) how the FCC should restrict the number and duration of covered calls;
(4) whether consumers should have a right to stop covered calls at any point the consumer wishes; and
(5) whether callers should be required to inform consumers of such a right.
A copy of FCC's NPRM is available at: Link to NPRM
As you may recall, Congress amended the TCPA in the Bipartisan Budget Act of 2015 to allow autodialed calls "made solely to collect a debt owed to or guaranteed by the United States" without the prior express consent of the called party.
The amendments also require the FCC to "prescribe regulations to implement the requirements" within nine months of enactment of the amendments (i.e., by Aug 2, 2016), and to adopt rules to "restrict or limit the number and duration" of these covered calls.
"Solely to collect a debt"
Among other things, the FCC proposes to interpret "solely to collect a debt" to mean "only those calls made to obtain payment after the borrower is delinquent on a payment." The FCC also proposes that "servicing calls" -- i.e., "calls to convey debt servicing information" -- should be included in covered calls.
The FCC seeks comment on how it should interpret the term "delinquent," or whether covered calls may "only be made after the debtor is in default," how it should define "default," and whether a distinction should be made "between default caused by non-payment and a default resulting from a different cause under the terms of the debt instrument."
The FCC also seeks comment on what types of calls should be included in "servicing calls," how to distinguish servicing calls from "marketing calls," whether covered calls should be allowed to start only after a borrower is delinquent on a payment, and whether delinquency should also be a trigger for debt servicing calls.
"Owed to or guaranteed by the United States"
The FCC also seeks comment on the meaning of the phrase "a debt owed to or guaranteed by the United States," including "whether there are any circumstances under which a party other than the federal government obtains a pecuniary interest in a debt such that the debt should no longer be considered to be 'owed to . . . the United States.'"
For example, the FCC asks for comment on "[w]hat is a debt 'owed to' the United States and a debt 'guaranteed by' the United States?," and "[d]oes the phrase 'owed to or guaranteed by' include debts insured by the United States?," and "would a debt still be 'owed to . . . the United States' if the right to repayment is transferred in whole or part to anyone other than the United States, or a collection agency collects the funds and then remits to the federal government a percentage of the amount collected?"
Who May Be Called
The FCC seeks comment on whether the phrase "solely to collect a debt" should "include only calls to the person or persons obligated to pay the debt," and whether the FCC should "limit covered calls to the cellular telephone number the debtor provided to the creditor, e.g., on a loan application."
The FCC also seeks comment on "whether calls to persons the caller does not intend to reach, that is persons whom the caller might believe to be the debtor but is not, are covered by the exception," and proposes to exclude such calls from the exception.
In addition, the FCC proposes "that calls to a wireless number a debtor provided to a creditor, but which has been reassigned unbeknownst to the caller, are not covered by the exception, but have the same one-call window the [FCC] has found to constitute a reasonable opportunity to learn of reassignment."
Who May Make Covered Calls
The FCC proposes to allow "calls made by creditors and those calling on their behalf, including their agents," but asks whether "there a limiting principle to determining who should be deemed to be acting on behalf of the creditor."
The also seeks comment on "whether and, if so, how the Supreme Court's recent decision in Campbell-Ewald Co. v. Gomez [regarding unaccepted offers of judgment, and the mootness doctrine] should inform our implementation of the Budget Act amendments to the TCPA."
Limits on Number and Duration of Covered Calls
The FCC proposes to limit the number of covered calls to three per month, per delinquency and only after delinquency. The FCC also proposes "that the limit on the number of calls should be for any initiated calls, even if unanswered by a person."
The FCC also seeks comment on "the maximum duration of a voice call, and whether [it] should adopt different duration limits for prerecorded- or artificial-voice calls than for autodialed calls with a live caller," whether the FCC should limit the length of text messages, and how to count "debt servicing calls" for purposes of the proposed three-call limit per month.
Consumer's Ability to Stop Covered Calls
The FCC proposes "that consumers should have a right to stop [covered] calls at any point the consumer wishes," and that "stop-calling requests should apply to a subsequent collector of the same debt."
The FCC also proposes "to require callers to inform debtors of their right to make such a request," and seeks comment "on when and how callers should provide such notice."
The FCC also seeks comment on whether callers making covered calls should be required "to record any request to stop calling and provide a record of such a request to subsequent callers along with other information about the debt."
Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: rwutscher@MauriceWutscher.com
Admitted to practice law in Illinois
Alabama | California | Florida | Illinois | Indiana | Maryland | Massachusetts | New Jersey | New York | Ohio | Pennsylvania | Texas | Washington, DC
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Our updates and webinar presentations are available on the internet, in searchable format, at:
Financial Services Law Updates
and
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and
and
California Finance Law Developments
and
