In August of this year, the Federal Communications Commission released new regulations that prevent debt collection agencies from using auto-dialers in order to contact debtors who are behind on their payments.
While this initially sent shockwaves through the collection community, we believe that the lasting impact will be far less than many initially feared.
You Shouldn’t Be Using Them Anyway
The regulations state that consumers should have control over who is able to contact their cell phones so that they are not forced to use their limited minutes or data. But the larger issue here is that using automated systems to contact consumers is simply a poor business practice.
There is way more to a successful debt collection strategy than plugging known contact numbers into an auto-dialer, and any reputable agency that has a track record of delivering results probably wasn’t using those automated approaches anyway.
They Don’t Return Results
The reason that most reputable debt collection agencies avoid using auto-dialers is that they just don’t return results.
The days of getting a good response rate from an automated phone call are long gone. Today’s consumers see those calls coming a mile away and are hanging up at the first sign of any type of automation.
Only Three Calls Per Month
The new FCC regulations also limit a collection agency to only contacting a consumer’s cell phone a maximum of three times per month. With many consumers moving away from landlines altogether, this will be a major hurdle for many collection agencies.
But as with any new regulation, it will likely make the ethical collection agencies who follow the rules better at getting results from those three calls they are permitted. On the other hand, the less-ethical agencies will either ignore the rules or see their success rates plummet.
Don’t Call Family Members
Another specific rule mentioned in the new regulations is that you are only permitted to contact the debtor themselves. Collectors are forbidden from contacting friends or family members.
Of course, that is also stated in the FDCPA, which any reputable collection agency is already following. So this is not going to be any change at all for most debt collection agencies.
Best Results Are From Hard Work
At the end of the day, the best results in the debt collection business always come to the agencies that are willing to put in long hours and hard work actually getting in touch with consumers and working with them to settle outstanding accounts.
Collection agencies that take shortcuts like using auto-dialers and other forms of automation have always been at a disadvantage because they are not willing to do the hard work that it takes to collect outstanding debts through legitimate methods. These new regulations simply reinforce what the fair market was already demonstrating.
Collection practices for legitimate debts conducted by ethical agencies are a necessary and important part of our economy. But shortcuts like auto-dialers are not a necessary component of those collections, and the best agencies will not suffer from these new regulations.