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Technology: Debate Regarding Cell Phones, Robocalls Intensifies

What's New in Technology

December 2011

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Technology: Debate Regarding Cell Phones, Robocalls Intensifies

Since 1991, The Federal Communications Commission has provided consumers with legislative protection from pre-recorded telemarketing calls. For years, a lively debate has been going on between various trade groups and the FCC over the extent of the protection and the definition of consumer consent, which overrides the FCC’s protection. The debate has intensified lately because the FCC is drafting a new ruling to clarify consent and to make regulations more exacting for companies that employ automatic calling equipment and/or pre-recorded messages (robocalls). After being virtually unable to reach out to cell phone users for 20 years, industry groups are challenging this veto, arguing that cost factors are a thing of the past. The proposed bill has implications for consumers and businesses that use automated calls for telemarketing purposes (and for politicians and others that use the same technology to send out messages). Let’s take a look at current laws and what changes are in the wind:

  • Current FCC regulations prevent telemarketers from making pre-recorded calls to residential landlines unless the call recipient has consented to receive automated calls or the recipient has had a previous business relationship with the caller. Cell phone users are protected by a blanket ban on commercial calls originating from automated calling equipment. Again, such calls can be made to cell phones if the consumer has consented to receive them.
  • The key question at the center of this debate is: What constitutes consent? As many of us know, providing a phone number to facilitate delivery of a one-time order or providing it during a retail transaction in a store is seen as evidence of a business relationship and serves as approval for the merchant to make automated calls in the future. Bear this in mind when you are signing up for money saving emails or when filling out a donation form for a charity.
  • Up to now, cell phones have been given more stringent protection from automated calling efforts. These tighter rules were developed to protect the consumer from the higher per-minute costs of receiving calls on a cell phone. Times have changed. Many people don’t use a landline anymore and the cost of cell phone calls has decreased.
  • Some industry groups oppose any stricter rulings on how consent is defined. The FCC is considering requiring businesses to secure consent in writing or by checking a box online. These lobbyists also believe that cell phones no longer need special rules, and that the previous arguments in support of these tougher regulations are no longer applicable.
  • The lobbyists opposing stricter FCC rulings have their own bill before Congress. These industry groups include the American Bankers Association and organizations that represent credit and collection agencies. On the other side of the argument, backing efforts to beef up the consent rules are consumer groups like the Consumer Federation of America and Consumer Watchdog. These groups also are fighting to keep cell phones out of the telemarketers’ range of fire.

Have consumers become more accepting of robocalls over the past two decades? It’s doubtful, and it’s also unlikely that most want less protection. The issue remains under Congressional review and merits our close attention.

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These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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