Borrowing

Supreme Court rules the government can't use robocalls to collect debt: Here's what that means for you

The Supreme Court struck down the provision that debt collectors can make robocalls when a consumer owed money to the federal government.

Twenty/20

If you owe the federal government money, debt collectors now have one less way to hassle you into paying.

Earlier this week, the Supreme Court upheld the Telephone Consumer Protection Act, which was passed in 1991. The law prohibits robocalls, or calls made with prerecorded messages, to cellphones without consumer consent and imposed a fee of up to $1,500 for any call or text message made or sent without prior express consent.

However, an exception was added to the law in 2015 that exempts government debt collection services from that law. This means that if you owed the federal government money — for example, federal taxes or student loans — debt collectors could use robocalls to contact you as much as they wanted. 

In upholding this law, the court struck down the provision that debt collectors could make robocalls when a consumer owed money to the federal government. 

"Americans passionately disagree about many things," Justice Brett Kavanaugh wrote in the court's opinion. "But they are largely united in their disdain for robocalls. The Federal Government receives a staggering number of complaints about robocalls — 3.7 million complaints in 2019 alone. The States likewise field a constant barrage of complaints." 

Here's what the ruling means for you and any federal debt you may owe. 

Debt collectors can still contact you

Some of the behavior by the collectors behind the calls doesn't align with the Fair Debt Collections Practice Act (FDCPA), says Bruce McClary, vice president of public relations and communications at National Foundation for Credit Counseling. The FDCPA states that debt collectors cannot "repeatedly use the phone to annoy you."

"[The Act] regulated how often a person can be contacted and by what channel that type of communication is allowed," McClary says. "I think this will help bring back more control over the debt collection process." 

However, while agencies can't unleash hundreds of robocalls on consumers who owe the federal government money, they can still have their employees call. 

"In the short term, consumers can expect that the robocalls they may have been receiving to collect the federal debt they owe will be replaced by calls from real people," McClary says. "They will be trying to contact you to collect the debt in other legally acceptable ways." 

Expect calls from people, not machines

Before this ruling, debt collectors could push a button and dial thousands of people at one time, according to George Slover, senior policy counsel for Consumer Reports.

Robocalls are "a labor-saving device for the company that wants to make the calls," Slover says. "But because of [how many calls companies can make], it magnifies the harassment factor. If somebody has to get on the phone and dial personally, the old-fashioned way, that's a lot more labor intensive." 

Even though collectors will continue calling, the reduced frequency could well feel less like harassment, he hopes. The ruling, he says, "preserves the fundamental protection that consumers have enjoyed for 30 years against unlimited robocalls." 

In the short term, consumers can expect that the robocalls they may have been receiving to collect the federal debt they owe will be replaced by calls from real people.
Bruce McClary
vice president of public relations and communications at National Foundation for Credit Counseling

You still must pay your debt

This Supreme Court ruling "might seem to be a relief for people,  but it doesn't mean the debt is no longer owed," McClary cautions.  

Eliminating robocalls from the debt collecting process will no doubt ease some anxiety. However, it's still just as important to make a debt payoff plan. Many people don't know how much debt they owe and when they will be able to pay it off, Ramit Sethi, author of the I Will Teach You To Be Rich blog, told Grow. 

"You should be able to answer this question: What is your debt payment date? You should know the exact month and exact year," he says. 

Monitor your spending by keeping a physical log of where your money goes, and find a payoff plan that works for you, without feeling too deprived. 

By being proactive about your debt, you might be able to stop receiving debt collector calls altogether. 

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