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Washington - Obama: Let Debt Collectors Call Our Cell Phones

Published on: October 4, 2011 07:53 AM
By: AP
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Washington - To the dismay of consumer groups and the discomfort of Democrats, President Barack Obama wants Congress to make it easier for private debt collectors to call the cellphones of consumers delinquent on student loans and other billions owed the federal government.

The change “is expected to provide substantial increases in collections, particularly as an increasing share of households no longer have landlines and rely instead on cellphones,” the administration wrote recently. The little-noticed recommendation would apply only to cases in which money is owed the government, and is tucked into the mammoth $3 trillion deficit-reduction plan the president submitted to Congress.

Despite the claim, the administration has not yet developed an estimate of how much the government would collect, and critics reject the logic behind the recommendation.

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“Enabling robo-calls (to cellphones) is just going to lead to more harassment and abuse, and it’s not going to help the government collect more money,” said Lauren Saunders of the Boston-based National Consumer Law Center. “People aren’t paying their student loans because they can’t find a job.”

Whatever the impact on the budget deficit, the proposal has aligned the White House with the private debt collection industry — frequently the subject of consumer complaints — at a time when the economy is weak, unemployment is high and Obama is embarking on his campaign for re-election.

Democrats in Congress who frequently support the president, including Senate Majority Leader Harry Reid of Nevada and House Democratic leader Nancy Pelosi of California, declined through aides to say whether they favor or oppose the plan.

Nor was there any reaction from two other members of the party’s leadership in the Senate, Sens. Dick Durbin of Illinois and Chuck Schumer of New York. Both men frequently take the side of consumers in legislative struggles.

Several aides, speaking on condition of anonymity so they could talk freely, said Democrats do not want to oppose the president but are unable to support the request.

Mark Schiffman, a spokesman for ACA International, an industry trade association, said the administration “basically has come to the same solution we have” at a time when an increasing number of Americans have no landline phone to receive calls.

The change “is something we have been advocating for,” he said, although he added his organization did not have direct discussions with administration officials in advance.

Schiffman noted that debt collectors have long been allowed to make robo-calls to landline phones. He said automatic dialing is a more efficient way to contact consumers who are overdue in their payments, and the industry wants it allowed in all cases, not solely those involving debts owed to the government, as Obama has proposed. Legislation along those lines was introduced in the House last week.

Federal law currently permits private debt collectors to use automatic dialing in trying to contact consumers on their landline phones. They also are permitted to make individually-dialed calls to some cellphones.

The request comes at a time when the government is looking for ways to collect tens of billions of dollars.

According to a report by the Treasury Department’s Financial Management Service, the Education and the Health and Human Services departments as well as FMS itself referred debts totaling $35.9 billion to private debt collectors in the 2010 fiscal year.

The Education Department accounted for the largest share by far — $28.8 billion referred to 22 private debt collection companies. The firms collected $685 million outright, and another $1.7 billion was recast into agreements that are designed to be paid monthly, according to the report.

Education Department officials did not respond to several requests to speak on the record about the proposal.

According to written responses the department provided to questions, it hires private collection agencies in part so the government can gain “the benefits of greater collections” through the use of new technology that is developed by private industry.

Collection agencies can receive a fee of as much as 17.5 percent of the amount they recover.

A different federal agency, the Federal Trade Commission, collects extensive records about the private debt collection industry in general.

“The FTC receives more complaints about the debt collection industry than any other specific industry,” according to an annual report to Congress, more than 100,000 in 2010.

The complaints fall into several categories, citing alleged harassment, demands for impermissibly large payments, failure to provide required consumer notice and threatening dire consequences such as jail time.


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1

 Oct 04, 2011 at 08:08 AM SherryTheNoahide Says:

Well, I'm sure for all the people who say businesses should be allowed to do whatever they want & run their operations as they see fit.... this probably sounds perfectly ok to all of you! (lol) But I think it stinks up to high heavens!

Just when The Obama Administration did the *right* thing & set up that Consumer Protection Department... he now wants to allow debt collectors to drive us all to our graves (some to suicide) and\or driven insane from constant telephone calls on our cell phones as well?

Those kinds of calls have stopped for me thank G-d... but I still remember what it feet like to be hounded about medical bills, doctor's offices threatening to sue, getting served with papers from the hospital, etc. It was hell... and we were a family of four, who had never gotten into credit card troubles or made a stupid financial gamble (ie: play Stock Market) in our lives!

But when I got sick, and our daughter was diagnosed w\Autism...our lives were turned upside down from medical bill collectors! >[:-P

Some people may think no-regulation is great... but we are a "broke & stressed out middle-America" as it IS! I don't think the common man can take much more abuse!

2

 Oct 04, 2011 at 08:29 AM Ahuvah54 Says:

I feel your pain. It is also true -- for now -- that you can request your creditors to only contact you in writing. Very few people are aware of this. People can look it up. In the end, we do have a responsibility to pay debts owed, but when there is underemployment and rent is also due, I think rent comes first. P.S. So does tuition.

3

 Oct 04, 2011 at 08:39 AM cynic Says:

Could someone locate the home and cell phone numbers of all the NY area Congressmen and Senators who keep approving this stuff, as well as the ones who make their own electioneering robot calls to us? While you're at it, could you also get us their spouse's numbers? And most especially, their mother-in-law's?

If they're going to keep harassing us, it sure would be nice to let them know how we feel about it.

4

 Oct 04, 2011 at 08:53 AM Anonymous Says:

One time, when my cellular carrier assigned me a new cell phone number, I kept receiving a multitude of collection calls from creditors, regarding someone who obviously had the exact cell number, before I was assigned to it. The creditors kept asking for an unknown person, and each call became more and more ominous. I kept explaining to the creditors that they had the wrong number. However, it was like talking to a wall. Finally, I contacted a Supervisor at the collection office, and threatened to take further action for those harassing calls. They backed off for a while, but continued. Finally, I just gave up, and paid $15.00 to the cellular company to assign me a new telephone number. One would have thought that the collectors would have more "sachel". However, they have one track minds. Once they zero in on a number, they have blinders and refuse to believe that they've made an error. I don't owe anybody a penny, and didn't appreciate receiving those idiotic calls!

5

 Oct 04, 2011 at 09:06 AM Anonymous Says:

Reply to #4  
Anonymous Says:

One time, when my cellular carrier assigned me a new cell phone number, I kept receiving a multitude of collection calls from creditors, regarding someone who obviously had the exact cell number, before I was assigned to it. The creditors kept asking for an unknown person, and each call became more and more ominous. I kept explaining to the creditors that they had the wrong number. However, it was like talking to a wall. Finally, I contacted a Supervisor at the collection office, and threatened to take further action for those harassing calls. They backed off for a while, but continued. Finally, I just gave up, and paid $15.00 to the cellular company to assign me a new telephone number. One would have thought that the collectors would have more "sachel". However, they have one track minds. Once they zero in on a number, they have blinders and refuse to believe that they've made an error. I don't owe anybody a penny, and didn't appreciate receiving those idiotic calls!

I have the same problem... I feel pretty bad for this unknown person. I have been getting calls- mostly collection calls but also about medical appointments and to pick up this lady's son from school... but I don't have a son! I tried telling that to the person on the other end, that they have the wrong number.... I have never gotten a call from this person's friends or family. Just "official" calls....
I can't get a new number due to work and all having my number but I just say "take this number off... I have never met anyone by that name before"... they seemed to have stopped or at least slowed down. Now I only get a call once a month instead of every week...

6

 Oct 04, 2011 at 09:10 AM YossieR Says:

They should charge for cellular service like in Israel. Incoming calls are free & do not use up your airtime. The caller pays the entire cost.

7

 Oct 04, 2011 at 10:51 AM Anonymous Says:

Last time I checked, there was NO legislation to limit robo-calls. I am plagued with them in the office daily. This disrupts my work and interferes with my communication with my customers/clients. I once suffered from the "windshield advertisers", whose cards and papers would be placed shortly before the rain, and be stuck hopelessly to the glass afterwards. I vowed to boycott each and every one of those advertisers, and I fulfilled my commitment. As a single customer, I am sure this served my interests, but had little impact on the advertiser. I recommend we launch a community wide movement, TO INCLUDE NON-PROFIT ORGANIZATIONS, to boycott anyone that makes a robo-call. BE"H, we will see this intrusive and disruptive practice stop due to its ineffectiveness.

8

 Oct 04, 2011 at 09:46 AM nphatti Says:

If you can afford a cell phone and the charges, why not pay your bills too. Sell your TV, I bet you have one. Get a second job cleaning stairs or sweeping the sidewalk. If you owe money, be responsible. Someone layed out real money fore whatever you owe for.

9

 Oct 04, 2011 at 09:52 AM Anonymous Says:

Reply to #2  
Ahuvah54 Says:

I feel your pain. It is also true -- for now -- that you can request your creditors to only contact you in writing. Very few people are aware of this. People can look it up. In the end, we do have a responsibility to pay debts owed, but when there is underemployment and rent is also due, I think rent comes first. P.S. So does tuition.

Yes its called "cease and desist" according to the law once you send them this letter they must stop calling you and if they do continue they could be sued for $1000 each time they call according to the FDCPA (that only applies to collection companies not original creditors)
LMS,

10

 Oct 04, 2011 at 10:11 AM Anonymous Says:

If you incur a debt, the lender is entitled to get the money back, If you cancel your landline, than they have every right to keep calling you on your cellphone. If you don't like it, pay your debt or give them a landline. Act responsibly, and you won't get harrassed. Act like a deadbeat and you deserve to be harrassed. If you cannot afford to pay, than there are legal means to have your debts discharged (its called bankruptcy).

11

 Oct 04, 2011 at 10:29 AM Unknown Says:

Since I only give my cell phone # to people I know, if I don't recognize a call's #, I don't answer the phone.

12

 Oct 04, 2011 at 11:05 AM Wilcow Says:

Mr Obama, We WANT YOUR CELL PHONE NUMBERS!!!

We want YOUR numbers so WE THE PEOPLE can call YOU about OUR 4 trillion plus dollars debt that YOU have run up as Executive Teleprompter Reader.

Give us your cell numbers!

13

 Oct 04, 2011 at 11:08 AM LMSandAssociates Says:

well there is a legal way to stop debt collectors from calling you it’s called "cease and desist" letter that you sent to them and according to FDCPA what is regulated by the federal Trade Commission they are in violation if they call.... and could be sued by the consumer for $1000 each time they violate this, this letter could be sent to you free of charge

14

 Oct 04, 2011 at 01:40 PM PMOinFL Says:

Collection agencies have every right to call you. You had no problem calling them when you wanted a loan, credit card, or other services. They have every right to call you demanding you live up to your contract. Period.

In most cases they are not "harassing" you. They are trying to collect money they are owed. If your welfare or social security check didn't arrive when it was supposed to, you'd be on the phone every day demanding that someone get it out to you.

Why should the business whose services you have used and are not paying for (stealing from) have to suffer? They did their job. They lived up to their end of the bargain. Why do they have to lose out because you can't manage your own finances? Why do their employees have to get less in bonuses in this year because you are a dishonest person?

Now, if it is a MISTAKE, I believe you should be able to file with the city and/or state to stop the calls until a hearing or some time of mediation is completed. That would be fair. After that, if you owe the money, they have every right to call you every day until you pay back what you have taken (stolen).

15

 Oct 04, 2011 at 01:42 PM whererurbrains Says:

China will call now obama on his cell phone to pay america's debt!!!

16

 Oct 04, 2011 at 02:45 PM MIESQ Says:

Now then since one gets charged for incoming calls who will be liable for calls made in error ? Also notice this is limitted to money owed the Feds. Why not try a bold idea of reducing College tuition in public universaties to affordable levels so that a Bacholars does not cost north of -$50-$75k

17

 Oct 04, 2011 at 04:45 PM PMOinFL Says:

Reply to #16  
MIESQ Says:

Now then since one gets charged for incoming calls who will be liable for calls made in error ? Also notice this is limitted to money owed the Feds. Why not try a bold idea of reducing College tuition in public universaties to affordable levels so that a Bacholars does not cost north of -$50-$75k

The AVERAGE cost of getting a bachelor's degree from a public university in NY state is $5,065 per YEAR. That is before any financial aid, or credits.

If you are a frugal person, you could consider starting a community college with has an annual average cost of $3,423.

2 years community college: $6,846
2 years at a state university: $10,130

That leaves a grand total of $16,976. That is with NO financial aid.

Now, of course that does not include cost of living expenses, however many people choose public colleges near their parents in order to save that money.

What I'm saying is, you are obviously a member of the "entitlement" generation who thinks you should be able to have $50,000-$75,000 worth of services provided for you free of charge. Well, buddy that's not how life works.

My father got a degree. You want to know how? Selling peanuts on the street in the summer, and working odd jobs around my grandfather's store. That's how he did it. He didn't get any "loans" or "grants".

College tuition costs what it costs. If you don't pay it yourself, *I* have to pay it (through taxes), and based on your disgusting "entitlement" attitude, you're not worth it.

18

 Oct 04, 2011 at 10:41 PM LMSandAssociates.com Says:

Reply to #14  
PMOinFL Says:

Collection agencies have every right to call you. You had no problem calling them when you wanted a loan, credit card, or other services. They have every right to call you demanding you live up to your contract. Period.

In most cases they are not "harassing" you. They are trying to collect money they are owed. If your welfare or social security check didn't arrive when it was supposed to, you'd be on the phone every day demanding that someone get it out to you.

Why should the business whose services you have used and are not paying for (stealing from) have to suffer? They did their job. They lived up to their end of the bargain. Why do they have to lose out because you can't manage your own finances? Why do their employees have to get less in bonuses in this year because you are a dishonest person?

Now, if it is a MISTAKE, I believe you should be able to file with the city and/or state to stop the calls until a hearing or some time of mediation is completed. That would be fair. After that, if you owe the money, they have every right to call you every day until you pay back what you have taken (stolen).

A- the banks get govermont funds to help people in distressed situations, the banks didn't lend money because they like you, they wanna be a part of the deal/equity and if value dropped or business struggled they are part of it.
B-you don't owe anything to a collection company and therfore by law you could ask them to stop contacting you (not only harasing). Most cases the bank/creditor charged off the account and was sold as junk debt in bulk.

19

 Oct 05, 2011 at 01:49 AM SherryTheNoahide Says:

Reply to #17  
PMOinFL Says:

The AVERAGE cost of getting a bachelor's degree from a public university in NY state is $5,065 per YEAR. That is before any financial aid, or credits.

If you are a frugal person, you could consider starting a community college with has an annual average cost of $3,423.

2 years community college: $6,846
2 years at a state university: $10,130

That leaves a grand total of $16,976. That is with NO financial aid.

Now, of course that does not include cost of living expenses, however many people choose public colleges near their parents in order to save that money.

What I'm saying is, you are obviously a member of the "entitlement" generation who thinks you should be able to have $50,000-$75,000 worth of services provided for you free of charge. Well, buddy that's not how life works.

My father got a degree. You want to know how? Selling peanuts on the street in the summer, and working odd jobs around my grandfather's store. That's how he did it. He didn't get any "loans" or "grants".

College tuition costs what it costs. If you don't pay it yourself, *I* have to pay it (through taxes), and based on your disgusting "entitlement" attitude, you're not worth it.

PMOinFL, lots & LOTS of people end up in debt, sued, losing their homes, etc. over medical costs.

But I suppose you take the same attitude about this type of debt as well?

Were you one of the applauders during the GOP debate the night the question was asked about that 30-year-old-uninsured-coma-patient? (LOL)

Just checking!

20

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