Debt Collectors May Soon Be Able To Call Your Cell Phone

News And Col­lec­tion Agency Regulations

Debt Col­lec­tors May Soon Be Able To Call Your Cell Phone

By Dean Kaplan

When you receive a phone call on your cell phone from an unfa­mil­iar num­ber, do you answer the call? Soon you may not want to since debt col­lec­tors may be able to call using cell phone num­bers. Right now, these calls are largely pro­hib­ited, but the Pres­i­dent and Con­gress are con­sid­er­ing allow­ing these calls to be made in the future.

Sup­port­ers feel that reg­u­la­tions have not kept pace with tech­nol­ogy since many con­sumers now exclu­sively use a cell phone and no longer own a land­line. Oppo­nents think the allow­ing these calls will lead to con­sumers being bom­barded with nui­sance calls.

Would you be sur­prised to have a col­lec­tor call your cell phone? Photo by Ollie Crafo­ord http://ow.ly/8DNSc

In favor of cell phones con­tact
Orig­i­nally, cell phones were off lim­its pri­mar­ily to pre­clude tele­mar­keters from auto-dialing con­sumers and caus­ing the con­sumer to be charged a steep price for the unwanted incom­ing calls. Over the years, how­ever, cell phone pay­ment plans have changed dras­ti­cally with most plans cur­rently charg­ing a flat fee or a much lower per minute rate.

As of now, debt col­lec­tors are allowed to call cell phones if they man­u­ally dial the num­ber. Pres­i­dent Barack Obama seeks to change the law so that con­sumers can be con­tacted on their cell phones using auto dialers if they are delin­quent on gov­ern­ment debt. These debts could include taxes, stu­dent loans and government-backed mort­gages. He feels this change would cause a sub­stan­tial increase in debt col­lec­tions. A bipar­ti­san bill intro­duced recently in the House is far­ther reach­ing, allow­ing col­lec­tors to use auto dialers and recorded mes­sages to reach cell phone users.

About 40 per­cent of con­sumers cur­rently use a cell phone as their pri­mary or only phone. This per­cent­age is even higher amount the 20 to 30-year olds. The group of cell phone only con­sumers will likely grow big­ger and big­ger as the younger gen­er­a­tion con­tin­ues to age. Being able to con­tact these peo­ple will be much eas­ier if the new laws are passed. .

Opposed to cell phone con­tact
Con­sumer advo­cates remain opposed to the changes because they fear the new law will open the flood­gates to intru­sive calls to cell phones. This argu­ment caries a lot of weight when con­sid­er­ing unso­licited tele­mar­ket­ing calls. How­ever, the pro­pos­als under con­sid­er­a­tion are for debt col­lec­tion calls where con­sumers who apply for credit are mak­ing a promise to pay back what they bor­row or spend. They also agree they can be con­tacted by the cred­i­tor if there is an issue, whether it is for fraud pro­tec­tion or to notify of a late payment.

Low­er­ing Costs for Every­one
The cred­i­tor and debt col­lec­tors need to be able to con­tact the bor­rower if there is a prob­lem, and if the cell phone is the only way, then this is an impor­tant right for cred­i­tors. If cred­i­tors can­not reach their cus­tomers by tele­phone, this sub­stan­tially increases over­all col­lec­tion risk. If this risk increases, cred­i­tors will have to charge more to all cus­tomers to cover the increased losses asso­ci­ated with peo­ple who owe money and only have cell phones.

The abil­ity to use auto-dialers low­ers the cost of mak­ing col­lec­tion calls. This lower cost is passed on by cred­i­tors to their clients. Com­pa­nies are always look­ing for ways to have tech­nol­ogy lower costs so they can con­trol prices, and the old restric­tions on call­ing cell phones are now keep­ing some costs unnec­es­sar­ily high.

Com­mer­cial col­lec­tions – how can they make con­tact?
Com­mer­cial col­lec­tion agen­cies (i.e. agen­cies that col­lect on busi­ness to busi­ness debt) often have to call cell phones. Many small busi­nesses also do not have land-lines and their main phone num­ber is a cell phone. When busi­nesses pro­vide a cell phone as the pri­mary or exclu­sive point of con­tact, cred­i­tors and their debt col­lec­tors must be and are allowed to call this pro­vided number.

It is not uncom­mon to have dif­fi­culty reach­ing a small busi­ness owner by phone at the pri­mary busi­ness line (whether cell phone or land line) when they are behind on their bills. Cred­i­tors can­not just give up on money owed because they can’t reach the appro­pri­ate busi­ness per­son at the main phone num­ber – this would be too costly.

Some com­mer­cial col­lec­tion agen­cies are very skilled at locat­ing poten­tially good alter­na­tive cell phone num­bers for busi­ness own­ers. How­ever, until the num­ber has been ver­i­fied as accu­rate, care must be taken as to what is said dur­ing a call or when leav­ing a voice mes­sage. Regard­less of the cur­rent law, auto-dialers should not be used for a vari­ety of best prac­tices rea­sons. It takes a skilled debt col­lec­tor to lis­ten to the per­son answer­ing the phone or to the mes­sage for the phone to deter­mine if it is the cor­rect or poten­tially cor­rect con­tact infor­ma­tion. Any com­mu­ni­ca­tion with the per­son answer­ing or any mes­sage left must not reveal pri­vate infor­ma­tion until the phone num­ber is con­firmed to be cor­rect. Com­put­ers can improve effi­ciency, but they can’t com­pletely replace people.

Not all com­mer­cial col­lec­tion agen­cies fol­low these best prac­tices. One rep­utable agency that never uses auto-dialers is The Kaplan Group.

The Kaplan Group is a bou­tique col­lec­tion agency spe­cial­iz­ing in large (over $10,000) debt col­lec­tions due from busi­nesses. Founded in 1991, the com­pany has a stel­lar rep­u­ta­tion (A+ rat­ing with the Bet­ter Busi­ness Bureau) and is rec­og­nized as one of the lead­ing col­lec­tion agen­cies for results on large and com­plex mat­ters.

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