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1.5.3 Telephone Technologies

In the CFPB’s survey of fifty-eight third-party collection agencies, all respondents with more than thirteen collection agents reported providing a toll free number.404

Collection agencies may make audio recording of collection telephone calls.405 Eighty-three percent of respondents to the CFPB’s survey of third-party collection agencies reported that they recorded all calls with the majority keeping the recordings for two years or more.406 Supervisors at some collection agencies purport to monitor telephone calls directly while other use software to analyze calls.407

Collectors frequently use automatic telephone dialing systems (“autodialers”) to dial thousands of numbers in a short period of time without human intervention.408 For example, a 2017 collection industry survey found that forty-four percent of respondents were using “non-manual dialing” (a.k.a. autodialing) in their collection operations.409 Autodialer technology permits debt collectors to greatly increase their number of outgoing calls per day. Collectors using autodialer technology or prerecorded messages, must also comply with the Telephone Consumer Protection Act.410

Interactive Voice Response or (“IVR”) allows computers to recognize voice responses or numbers pressed on a landline phone or cellphone. One survey of collectors reported that twenty-seven percent of respondents use Interactive Voice Response technology.411 This technology can be used by collectors for both outbound calls (e.g., identifying when a call connects with a consumer and routing it to a live agent) and inbound calls (e.g., accepting credit card payments from consumers over the phone).412

As the name implies, “ringless voicemail” delivers pre-recorded voicemail messages to voicemail boxes without causing phones to ring. The phones then notify consumers that there is a voicemail message (based on the settings for the individual phone) and consumers can access the message. These messages are transmitted by the tens of thousands directly to the phone company’s server.413 As of June, 2017, there is a pending declaratory action at the Federal Communications Commission (FCC) regarding the question of whether the use of this technology is covered by the Telephone Consumer Protection Act (TCPA).414 If the technology is found to be covered by either the courts or the FCC, its use may trigger independent violations of the TCPA.

Telephone systems are able to transmit to the recipient a fake caller identification indicating a phone number different from that of the phone number placing the call. This is known as caller ID spoofing. One common tactic is displaying an area code that is the same as the call recipient’s area code to attempt to increase the number of answered calls. This misrepresentation of who is calling violates specific requirements that collectors not engage in deceptive practices and give their true name.415 To address concerns about caller ID spoofing, the Consumer Financial Protection Bureau is considering a proposal to require collectors to display phone numbers that the consumer can use to make in-bound calls.416 Additionally, the FCC and FTC rules require any person or entity that engages in telemarketing to transmit caller ID information to the called party, and the rules prohibit caller ID blocking.417

Footnotes

  • 404 Consumer Fin. Protection Bur., Study of third-party debt collection operations 33 (July 2016).

  • 405 E.g., Wade v. Bonneville Billing & Collections, Inc., 2014 WL 3530146 (D. Utah July 15, 2014) (debt collector produced six calls initiated by consumer).

  • 406 Consumer Fin. Protection Bur., Study of third-party debt collection operations 24 (July 2016) (48/58 * 100 = 82.8%).

  • 407 See discussion of speech analytics in § 1.5.5, infra.

  • 408 For a discussion of the Telephone Consumer Protection Act’s definition of autodialers, see § 14.3.2.3, infra and National Consumer Law Center, Federal Deception Law § 6.3.2 (2d ed. 2016), updated at www.nclc.org/library.

  • 409 Ernst & Young, The Impact of Third-Party Debt Collection on the US National and State Economies in 2016, p. 5 (Nov. 2017) (report commissioned by ACA International).

  • 410 National Consumer Law Center, Federal Deception Law § 6.3 (3d ed. 2017), updated at www.nclc.org/library.

  • 411 BillingTree, Collection Agency Operations and Technology Survey (2017).

  • 412 Phil Britt, ARM Firms Leverage IVR Technology to Lower Costs, (InsideArm, Sept. 14, 2009), available at https://www.insidearm.com.

  • 413 See, e.g., In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Petition for Declaratory Ruling of All about the Message, L.L.C., Docket No. 02-278, DA 17-364 (May 18, 2017) (National Consumer Law Center, comments to the Federal Communication Commission opposing the Petition for Declaratory Ruling and Waiver), available at https://www.nclc.org.

  • 414 Id.

  • 415 See § 6.8, infra. But see Scheffler v. Integrity Fin. Partners, Inc., 2013 WL 9768539 (D. Minn. Oct. 28, 2013) (debt collector using service that provided local telephone for every call from debt collector’s call center did not violate FDCPA).

  • 416 Consumer Fin. Protection Bur., Small Business Review Panel for Debt Collector and Debt Buyer Rulemaking: Outline of Proposals Under Consideration and Alternatives Considered (July 28, 2016), available at http://files.consumerfinance.gov.

  • 417 16 C.F.R. § 310.4(a)(8); 47 C.F.R. § 64.1601(e). See also Nat’l Fed’n of the Blind v. Fed. Trade Comm’n, 420 F.3d 331, 342 (4th Cir. 2005) (holding that FTC rule is constitutional and within FTC’s authority, even as applied to for-profit solicitors for charities); 73 Fed. Reg. 43196 (July 20, 2011) (Statement of Basis and Purpose for FTC’s amended telemarketing rule); 68 Fed. Reg. 4580, 4623–4628 (Jan. 29, 2003) (amending FCC rule in light of Truth in Caller ID Act); In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 ¶ 184, 18 FCC Rcd. 14014 (F.C.C. July 3, 2003) (report and order). See National Consumer Law Center, Federal Deception Law § 6.6.5 (3d ed. 2017), updated at www.nclc.org/library.