Bankruptcy

Debt collectors using auto-dialers face BIG fines

By Chip Parker, Jacksonville Bankruptcy Attorney

The average consumer debt collector employee places 200 collection calls per day or 50,000 calls per year!  How do they make so many calls?  Most use a technology known as autodialing, even though the use of an autodialer by a collector often violates the Telephone Consumer Protection Act (TCPA).

The penalty for violating the TCPA is HUGE ? Every illegal phone call carries with it a $500 penalty, and if the collector knows he is violating the Act, the penalty is tripled!

As the name implies, an auto-dialer is a sophisticated computer system that constantly and continuously dials numbers on collection accounts.  When someone answers the phone, the computer immediately delivers the call to a collector, and the account pops up on the collector?s monitor.  So, if you are behind in your bills, you (and your family and your employer) are getting calls from your debt collectors ? a lot of calls!

Not every call using an autodialer is illegal.  Most notably, a consumer debt collector can call a debtor at home using an autodialer.  However, the following two acts violate the TCPA if an autodialer is used:

Like every rule, there is an exception.  If the debt collector has the prior written consent of the recipient, then there is NO VIOLATION.  For instance, if the debtor gives the debt collector permission to call his cell number, or if that?s the only number the debtor provided his creditor, there is no violation.  However, the debtor can revoke that consent by advising the collector that he has reached a cell phone and that he does not have permission to call that number again.

TCPA violations often occur when consumer collectors contact the debtor?s family members or coworker looking for the debtor.  If an autodialer is used to place the call, there is an immediate violation of $500.  If the collector KNOWS that the number he is dialing belongs to debtor?s family members or coworker, the fine is $1,500 for a single call.  So, if the debtor?s parents get 100 calls from a harassing collector, the statutory fine is as high as $150,000!

Why would a collection agency employ a technology that exposes the agency to huge civil penalties?  The enormous profits generated by autodialing far outweigh the potential penalty when caught.  In other words, it is just the cost of doing business.

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Full post as published by Bankruptcy Law Network on September 15, 2010 (boomark / email).