Collecting a debt is often more complicated than it may appear, especially with the many state and federal laws and regulations impacting the debt collection industry.
One of the most prominent–and therefore misunderstood–debt collection regulations affecting the industry is the Telephone Consumer Protection Act, which has seen enforcement expansions in recent years.
Here is a brief summary of how the regulations impact debt collectors and what the Telephone Consumer Protection Act is, from the debt collection and recovery experts at the Monetaria Group, as well as recent changes that may affect their enforcement.
What is the Telephone Consumer Protection Act?
The Telephone Consumer Protection Act (TCPA) was enacted in 1991 to regulate different forms of telephone communications, when this new method of human connection exploded into popularity and marked the beginning of the technology boom we’ve seen in the three decades since.
The Telephone Consumer Protection Act covers solicitation calls, auto-dialed calls, pre recorded calls, text messages, and unsolicited faxes (maybe that’s not so relevant these days). The TCPA also prohibits non-emergency calls through an “automatic telephone dialing system” (ATDS) without prior express consent, and applies to cell phones, paging services, and services where the recipient is charged for the call, as well as residential telephone lines using artificial or prerecorded voices, unless specific exemptions are met. An ATDS, as defined by the TCPA, includes equipment capable of storing or producing telephone numbers using a random or sequential number generator and dialing such numbers.
READ MORE: What is a Debt Recovery Attorney?
What Is The Impact Of The Telephone Consumer Protection Act For Debt Collection?
The Telephone Consumer Protection Act (TCPA) significantly influences debt collection practices, particularly in the realm of calls to cell phones. The requirement for “prior express consent” lacks a precise statutory definition, relying instead on various court rulings and Federal Communications Commission (FCC) decisions. Generally, debt collectors secure consent if the debtor provided their wireless number to the creditor during the transaction resulting in the debt owed. Despite the TCPA’s silence on the matter, court decisions affirm the right of recipients to revoke consent verbally or in writing.
In cases of TCPA violations, the act establishes a civil cause of action enabling recipients to seek damages. The recipient can recover the actual monetary loss suffered or $500 for each violation, whichever is greater. If the violation is deemed willful, the recipient may be entitled to three times the regular damages. Additionally, enforcement falls not only to the FCC but also to state attorneys general. However, before the FCC can impose monetary penalties on a party without an FCC license or authorization, it must first issue a citation warning the party of the impending consequences.
The landscape of the Telephone Consumer Protection Act (TCPA) underwent significant shifts with the issuance of the FCC’s Declaratory Ruling and Order FCC 15-72 on July 10, 2015. This order introduced several key changes to the interpretation and enforcement of the TCPA. Notably, it expanded the definition of “calls” to include text messages, reflecting the latest trends in communication practices, providing a broader scope of protection for consumers. The order also clarified that consumers have the right to revoke consent for calls and text messages sent from Automatic Telephone Dialing Systems (ATDS) in any reasonable manner at any time.
The FCC order also addressed the issue of reassigned phone numbers, stating that consent is no longer “inherited” from the previous owner after a single call. Callers must cease contact if the number has been reassigned, emphasizing the need for accurate recipient information. The interpretation of an ATDS was broadened, encompassing not just the device’s present capabilities but also its potential functionalities. The order clarified that an ATDS need not be actively using a random or sequential number generator to fall under the TCPA’s jurisdiction. These changes, although not exhaustive, underscore the dynamic nature of TCPA regulations and the need for organizations to stay abreast of evolving compliance requirements.
READ MORE: When Is It Time To Hire a Debt Collections Agency?
How to Ensure Your Debt Collection Complies With The Law
To ensure your work to recover funds owed to you is completely legal and above board, if you’re doing it yourself, make sure to read the latest news and advances in the debt collection law space and speak with debt collection lawyer-friends to make sure you’re doing everything right. If you’re working with a collection agency or debt recovery attorney-or both, like Monetaria, for example-do your research before engaging their services and ask for references to make sure they have a history of effective, legal and ethical debt collection practices.
We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on collections, to ensure your business gets paid.
If you have unpaid debts that need to be recovered, commercial debt collection may be a good option for your business. A commercial debt collection agency can help you with the process of recovering past-due accounts and provide guidance on best practices for managing accounts receivable.
Led by a team of experienced commercial debt collection attorneys, Monetaria Group has lawyers for debt collection and helped hundreds of businesses recover and collect their outstanding debts and payments. Schedule a FREE consultation with our expert team to see how we can help you recover your money today!