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Strict New Limits on Prerecorded Debt Collection Calls Effective July 20

Effective July 20, 2023, the FCC has placed strict new limits on the number of prerecorded collection calls that a debt collector can send to a consumer’s landline.  Importantly, consumers have powerful remedies for violations (statutory damages of $500 to $1500 per call), because the new FCC rule is promulgated under the Telephone Consumer Protection Act (TCPA). 

The July 20 rules place numerical limits on other kinds of prerecorded calls to residential lines as well, both commercial and non-commercial, including calls by non-profits, political calls, and Health Insurance Portability and Accountability Act (HIPPA)-related calls. Prerecorded telemarketing calls to residential lines continue to require prior express written consent for every call. This article focuses on the implications of the new rules for debt collection calls and how the new rules provide new consumer rights and remedies beyond those already available under the CFPB’s Regulation F on debt collection.

The New FCC Rules Effective July 20, 2023

The TCPA prohibits prerecorded calls to residential landlines, except in the case of the called party’s consent or in case of an emergency. Until July 20, FCC rules had completely exempted debt collection calls and other non-telemarketing calls from this TCPA prohibition.  The national do-not-call registry applies only to telemarketing calls, so it did not fill this gap.

As of July 20, a debt collector’s prerecorded calls to a consumer’s landline are limited to three calls within any consecutive thirty-day period. 47 C.F.R. § 64.1200(a)(3)(iii).  These calls remain exempt from the TCPA’s general requirement (15 U.S.C. § 227(b)(1)(B)) of prior express consent for prerecorded calls to a residential line, but a caller can exceed the three-call limit only with the prior express consent of the called party.  47 C.F.R. § 64.1200(a)(3)(iii). In addition, every prerecorded debt collection call to a residential line must provide an automated, interactive voice and/or key-press-activated opt-out mechanism for the called party to make a do-not-call request, and the caller must comply with any do-not-call request.  47 C.F.R. § 64.1200(a)(3)(iii), (b)(3). 

These new restrictions were adopted pursuant to a 2019 TCPA amendment, called the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act). The TRACED Act requires the FCC to place a numerical limit on calls made pursuant to any of its exemptions. 47 U.S.C. § 227(b)(2)(I).  The new rules were finalized in 2021 at 86 Fed. Reg. 11,443 (Feb. 25, 2021), and on January 20, 2023, the FCC made a correction to the new rule and on the same Federal Register page in a separate notice announced a July 20, 2023, effective date. See 88 Fed. Reg. 3668 (Jan. 20, 2023). The FCC announced the new rule and explained its rationale on December 30, 2020.  In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 355 F.C.C. Rcd. 15,188, 2020 WL 7873750 (F.C.C. Dec. 30, 2020).  See also NCLC’s Federal Deception Law §§, 6.6.7

Note: as of July 20, 2023, some Code of Federal Regulation versions had not yet been updated; in that case, refer to the February 25, 2021, and January 20, 2023, Federal Registers linked to above. 

Both the statutory provision and the new rule are phrased as applying per caller, so that one debt collector calling the same consumer about multiple debts is still limited to a total of three calls for all the debts it is collecting from the same consumer.

Since the rules were adopted pursuant to TCPA § 227(b)(2) and will result in restrictions on prerecorded calls to residential lines under § 227(b)(1)(B), the private cause of action set forth in § 227(b)(3) for “violations of this subsection” will be available. For calls that are subject to the numerical limits, the TCPA’s remedies—statutory damages of $500 per call (up to $1500 per call if knowing or willful)—will therefore be available for any calls that exceed the numerical limit without the called party’s consent, or that do not include an interactive opt-out mechanism, or that are made after a do-not-call request.

FCC’s New TCPA Rules Offer Stronger Relief Than CFPB’s Regulation F on Debt Collection

These new FCC limits on debt collection calls are significant improvements over the substantive protections and remedies offered by the Fair Debt Collection Act (FDCPA) and the CFPB’s new Regulation F interpreting the FDCPA. 

First, while the FDCPA prohibits “[c]ausing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number,” 15 U.S.C. § 1692d(5), the statute itself does not place a numerical limit on calls. Regulation F creates a presumption that seven attempted calls per week per account in collection—or one telephone conversation every seven days—is not an FDCPA violation. 12 C.F.R. § 1006.14(a)(2). See also NCLC’s Fair Debt Collection § 6.7By contrast, the FCC’s new TCPA limit on prerecorded debt collection calls is much stricter—just three calls per thirty-day period.  In addition, the new TCPA limit applies per caller, while the Regulation F limit is per account in collection. Unlike the new FCC rule, Regulation F allows the same collector to make additional calls for each additional debt it is collecting from the same consumer.  Moreover, the new TCPA prohibition is a strict standard, and there is no need to show intent or anything other than the fact that the caller exceeded the numerical limit.

Second, the FDCPA and Regulation F require debt collectors to stop contacting consumers when they send a written cease communications notice or ask debt collectors to stop contacting them in a particular way (e.g., “stop calling me”).  See NCLC’s Fair Debt Collection §§ 5.8, 6.9.  But these provisions do not require an interactive, automated opt-out system that is required by the new FCC rules.  By imposing this requirement for prerecorded debt collection calls, the FCC greatly improves the usability of the opt-out right for prerecorded debt collection calls to residential lines. 

Third, most courts rule that FDCPA statutory damages are capped at $1000 per lawsuit, no matter how many wrongful calls the collector makes to the same consumer. See NCLC’s Fair Debt Collection §  By contrast, the TCPA allows a separate statutory damage award for each call over the limit. See NCLC’s Federal Deception Law § 7.6.2.

On the other hand, the new TCPA limits only apply to residential landline calls made with a prerecorded voice, while the Regulation F limits apply regardless of whether the phone is a landline or cell phone and regardless of whether the call is prerecorded or made by a live agent.  Other TCPA provisions, though, do place restrictions on debt collection calls to cell phones, as described below.

Another downside of a TCPA claim is that the TCPA does not provide for an award of attorney fees. However, many debtors will have received so many debt collection calls that the aggregate statutory damages will be sufficient to compensate both the debtor and counsel. See generally NCLC’s Federal Deception Law § 7.6 on TCPA remedies.

TCPA Limits on Debt Collection Calls to Cell Phones

Separate from the new provisions taking effect July 20, the TCPA already restricts calls to cell phones, and debt collection calls have never been exempted from these restrictions.  The basic restriction is that (except for emergency calls) autodialed or prerecorded calls can be made only with the called party’s prior express consent.  Consent need not be written except in the case of telemarketing calls. See generally NCLC’s Federal Deception Law § 6.3

While courts have recently interpreted the restriction on autodialing narrowly, the restriction on prerecorded calls has been interpreted broadly and encompasses calls that are partially prerecorded or that play snippets of prerecorded material (“robot” calls).  See NCLC’s Federal Deception Law § 6.3.3

Article III Standing Rarely Limits Recovery of TCPA Statutory Damages

Standing to bring FDCPA claims in federal court has been a significant issue since the Supreme Court’s 2021 decision in TransUnion L.L.C. v. Ramirez, 141 S. Ct. 2190 (2021).  However, both pre- and post-Ramirez decisions have almost universally agreed that receipt of unwanted telephone calls is an invasion of privacy and a concrete injury, providing the consumer litigant Article III standing to seek statutory damages under both the FDCPA and TCPA.  See NCLC’s Federal Deception Law § 7.4; NCLC’s Fair Debt Collection § 11.15.6. Nonetheless, it will still be important to allege that the calls invaded the plaintiff’s privacy, and to allege the effect upon the consumer of any failure on the part of the caller to include an interactive opt-out mechanism.

For Even More Information

More information will be provided in courses offered at the Consumer Rights Litigation Conference (CRLC) on bringing claims for unwanted prerecorded debt collection calls under the Telephone Consumer Protection Act.  Information about the CRLC and registration can be found here.

Consumer litigation under the TCPA, including the new FCC rules, is examined in detail at NCLC’s Federal Deception LawChapter 6 examines the substantive requirements and Chapter 7 analyzes remedies and litigation issues. For more on Regulation F and the FDCPA, see NCLC’s Fair Debt Collection.