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Senate Addresses Robocalls: What Mortgage Servicers Need to Know

Although robocalls can be an important element of how the financial services industry communicates with those they are doing business with, robocalls are often seen in a bad light due to some fraudulent or abusive calls that are made without a participant’s consent. In order for the industry to use them properly, clarity is needed on issues such as what qualifies as a robocall, who is legally permitted to be contacted, and how a consumer can grant consent for the communication. A Senate hearing Wednesday tackled this topic head-on.

“Not all of them are inherently negative,” said Sen. John Thune, Chairman of the Committee of Commerce, Science, and Transportation in his opening remarks at the Senate hearing on Wednesday. The hearing attempted to lay out steps the government and the industry can take to protect against scammers who take advantage of this technology.

“Many important services are carried out via robocall where companies and call recipients have pre-established relationships and where the consumer has agreed to participate in these types of calls,” said Thune. For instance, robocalls may be used by the financial services industry to remind customers about pending payments or to communicate with homeowners in case of natural calamities.

Recently, an Appeals court also weighed in to clarify the issues of robocalls and consent. The U.S. Court of Appeals for the District of Columbia Circuit issued a ruling in the case of ACA International v. FCC, clarifying several issues with regard to consumer and industry rights pertaining to robocalls and texts sent to consumers.

ACA International had challenged the FCC’s interpretations of the TCPA, as laid out in a July 2015 Omnibus Declaratory Ruling and Order on three issues—the definition of an ‘automatic telephone dialing system,’ the identity of the ‘called party’ in the reassigned number context, and the means by which consent can be revoked.”

Scott Delacourt, Partner, Wiley Rein LLP and a representative of the U.S. Chamber of Commerce who testified at the Senate hearing on Wednesday said: “Unfortunately, the Commission’s implementation of the Telephone Consumer Protection Act (TCPA) over many years has fostered a whirlwind of litigation,” said Delacourt. “Interpretations by courts and the FCC have strayed far from the statute’s text, Congressional intent, and common sense, turning the TCPA into a breeding ground for frivolous lawsuits brought by serial plaintiffs and their lawyers, who have made lucrative businesses out of targeting U.S. companies.”

According to Delacourt, the number of TCPA case filings exploded to 4,860 in 2016, and TCPA litigation grew 31.8 percent between 2015 and 2016.

However, fraudulent robocalls remain a persistent challenge for the Federal Trade Commission (FTC), Federal Communications Commission (FCC), and for the industry and lawmakers.

In 2017, the Federal Trade Commission (FTC) received 7.1 million complaints from consumers against robocalls. Of these, 771,000 complaints were about fraudulent calls that allegedly helped consumers reduce debt.

“Illegal robocalls remain a significant consumer protection problem because they repeatedly disturb consumers’ privacy and frequently use fraud and deception to pitch goods and
services, leading to significant economic harm,” said Lois Greisman, Associate Director, Marketing Practices Division, Bureau of Consumer Protection at the FTC. “Illegal robocalls are also frequently used by criminal impostors posing as trusted officials or companies.”

Greisman, who was one of the witnesses testifying at the hearing, said that technological advances had permitted lawbreakers to make more robocalls for less money and with a greater ability to hide their identity.

The Senate also heard a testimony from Rosemary Harold, Chief, Enforcement Bureau, at FCC who said that many fraudulent robocalls were designed to trick people out of significant amounts of money. “These schemes often are most effective in harming vulnerable populations, such as senior citizens,” said Harold. “Unwanted robocalls are the Commission’s number one source of consumer complaints. The recent Omnibus legislation will provide significant assistance in our enforcement efforts.”

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. She can be reached at Radhika.Ojha@DSNews.com.
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