Frugal Café Blog Zone

Posted By Vicki McClure Davidson on October 4, 2011

Pres. Obama, 'man of action,' wants debt collectors to call people's cell phones about their delinquent student loans and other debts to the government

With record unemployment, a record number of businesses going bankrupt, a record number of American families on food stamps and losing their homes, a record number of jobs disappearing from the U.S. labor force, record numbers of young adults having to move back in with their parents, the worst economy we’ve seen since the Great Depression, Pres. Barack Obama has another brilliant idea.

He wants those who are behind on paying back their student loans and have other delinquent loans owed to the government to be called on their cell phones by debt collectors and robo-call dialers.

Unemployed? Too bad.

Few Democrats in Congress are standing behind the president on this proposal.

Mr. President — many people would be more than willing to pay their debts, but WITHOUT A JOB, that’s purt-near impossible. And having debt collectors harass them on their cell phones won’t change their unemployment status.

From Associated Press, Obama seeks debt collector proposal:

WASHINGTON (AP) — To the dismay of consumer groups and the discomfort of Democrats, President Barack Obama wants Congress to make it easier for private debt collectors to call the cellphones of consumers delinquent on student loans and other billions owed the federal government.

The change “is expected to provide substantial increases in collections, particularly as an increasing share of households no longer have landlines and rely instead on cellphones,” the administration wrote recently. The little-noticed recommendation would apply only to cases in which money is owed the government, and is tucked into the mammoth $3 trillion deficit-reduction plan the president submitted to Congress.

Despite the claim, the administration has not yet developed an estimate of how much the government would collect, and critics reject the logic behind the recommendation.

“Enabling robo-calls (to cellphones) is just going to lead to more harassment and abuse, and it’s not going to help the government collect more money,” said Lauren Saunders of the Boston-based National Consumer Law Center. “People aren’t paying their student loans because they can’t find a job.”

Whatever the impact on the budget deficit, the proposal has aligned the White House with the private debt collection industry – frequently the subject of consumer complaints – at a time when the economy is weak, unemployment is high and Obama is embarking on his campaign for re-election.

Democrats in Congress who frequently support the president, including Senate Majority Leader Harry Reid of Nevada and House Democratic leader Nancy Pelosi of California, declined through aides to say whether they favor or oppose the plan.

[...]

Several aides, speaking on condition of anonymity so they could talk freely, said Democrats do not want to oppose the president but are unable to support the request.

Mark Schiffman, a spokesman for ACA International, an industry trade association, said the administration “basically has come to the same solution we have” at a time when an increasing number of Americans have no landline phone to receive calls.

The change “is something we have been advocating for,” he said, although he added his organization did not have direct discussions with administration officials in advance.

Schiffman noted that debt collectors have long been allowed to make robo-calls to landline phones. He said automatic dialing is a more efficient way to contact consumers who are overdue in their payments, and the industry wants it allowed in all cases, not solely those involving debts owed to the government, as Obama has proposed. Legislation along those lines was introduced in the House last week.

From LoanSafe.org, Debt Collectors, Other Businesses Want to Call Your Cellphone:

That unfamiliar incoming call to your cellphone soon might be from a debt collector.Cellphones are largely off-limits to collection agencies, but proposals by the White House and Congress could change that.

Supporters say regulations have not kept up with technology and the fact that many consumers have replaced traditional landlines with cellphones. But consumer advocates warn that cellphone users could be bombarded with “nuisance” calls if debt collectors gain another avenue to reach — or hound — consumers.

“You give them any opportunity to call cellphones, they not only will do what is allowed but what is not allowed,” said Lauren Saunders, managing attorney for the National Consumer Law Center. “This is one of the most abusive industries in the country.”

Consumer advocates’ concern is understandable; the Federal Trade Commission perennially receives more complaints about debt collectors than any other industry.

Way to go, President Zero.

US National Debt chart - read it and weep, America

Categories: Business & Economy, Government, Social and Political Climate, Technology
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