Budget provision lets US gov’t robocall debtors

© Carlo Allegri
Hidden in the US budget compromise is an amendment that would allow automated calls to the cell phones of those who owe money to the government, including debts related to student loans, taxes and mortgages.

As part of the two-year budget bill, Section 301 would amend Section 227(b) of the 1934 Communications Act, which prohibits automated calls to any phone service for which the recipient is charged, by adding the qualifier “unless such call is made solely to collect a debt owed to or guaranteed by the United States.”

The bill gives the Federal Communications Commission nine months to “prescribe regulations to implement the amendments made by this section,” in consultation with the Department of the Treasury.

Automated calls are one of the most hated issues the Federal Communications Commission (FCC) deals with. In 2014 alone, the agency received some 215,000 complaints. In June this year, the FCC issued stricter regulations on autodialing to prevent telemarketers from skirting the rules, and allowed phone companies to block automated calls and texts.

Senate Commerce Committee Chairman John Thune, a South Dakota Republican, said the provision was offered up by the Office of Management and Budget (OMB), and that the initiative has been part of President Obama's budget requests for the past several years, according to The Hill.

"I guess this particular issue, I don't have big heartburn over," Thune told reporters Wednesday, adding that it is meant to help government collectors recoup student loan debt.

The government pays millions of dollars to private contractors who handle payments, answer questions and keep borrowers from defaulting on their loans. The performance-based arrangement rewards the contractors for keeping the payments coming. In a recent report to the White House, however, the Department of Education complained the servicers are having difficulty staying in touch with student loan borrowers, the Washington Post revealed.

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“Many student loan borrowers, especially those that may just be graduating, move frequently in addition to no longer having landline phone numbers,” the department wrote. “It can be difficult for servicers to find a borrower except by using a cell phone number.”

Consumer advocates say that robocalls are abusive and harassing, and urge the lawmakers to reject the provision as dangerous.

“Giving one of the most abusive industries in the US free rein to inundate people with robo-calls to their cellphones is a terrible idea,” said Margot Saunders of the National Consumer Law Center. “Cellphone calls can distract people while driving, interrupt them at their jobs, and needlessly impose a cost on struggling families by using up scarce minutes.”

Several Senate Democrats have expressed concerns about the provision, but added it was not enough to make them back away from supporting the bill.

"I don't know how this provision got in there. And if anybody knowns, I would love to find out,” said Missouri Democrat Claire McCaskill. “I just think it is a really bad idea that we put something in this budget deal that's going to allow the federal government to participate in robocalls to collect debt."

Senators Ed Markey of Massachusetts and Richard Blumenthal of Connecticut also objected to the provision.

The two-year budget deal passes the House of Representatives on Tuesday in a 266-167 vote. It’s expected to pass the Senate as well and be signed into law by President Obama.