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“Robocalls” Are Allowed To Collect Debts to the U.S.

The amendment to the U.S. Telephone Consumer Protection Act (TCPA) exempting certain businesses from the TCPA for telephone calls made in connection with “collection of a debt owed to or guaranteed by the United States” became effective in late 2015. Although regulations interpreting the amendment are not final, it appeared that collection calls made by servicers of federally-backed mortgage loans and federally-funded student loans would be exempt from the TCPA, which mandates certain restrictions on telephone solicitation and the use of automated telephone equipment. This amendment was expected to impact the significant class action litigation under the TCPA. This expectation has been confirmed.

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A California federal court ruled on March 31 that the TCPA amendment applies retroactively, and accordingly dismissed a class action in which defendant federal student loan servicer was sued for alleged use of automated telephone calls (“robocalls”) for collection purposes. In coming to its opinion, the trial court relied upon U.S. Supreme Court precedent on the issue of retroactive application of congressional amendments.  Although this ruling by the California court has limited precedential value, as one of the first – if not the first – opinions on the application of the TCPA amendment it could carry great weight and might lead to dismissals of other pending TCPA cases brought against lenders and servicers of federally-backed loans.  Congress is yet considering further legislation on the subject of TCPA applicability.

Consult an Ally Law member firm to discuss whether your collection practices accord with the current requirements of the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Telephone Consumer Protection Act, and other consumer protection laws. Outside the United States, your country may have legislation or regulations governing collection practice, and Ally Law member firms have attorneys experienced in the most current consumer protection and debt collection laws applicable to any jurisdiction in which you do business.  For more information about our services in this area, contact us at yourally@ally-law.com.

By Musick, Peeler & Garrett.