| Should debt collectors call your
cell phone? |
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Benefits of the automated dialing technology
While collectors can't use the automatic dialers to contact you
on your cell phone, they can dial your phone number manually, but
they say this would hike up business costs that would eventually
be passed on to the consumer as additional fees or limited services.
The collectors, creditors and supporters that provided
written comments to the FCC in May say automatic dialers have many
benefits for the consumer, as well as the creditor. They say the
dialers protect the consumer's privacy, inform the consumer of the
status of his or her accounts and provide creditors with an efficient
way to keep consumers informed of their accounts.
"Eleven percent of the cases from our survey were
cases where the identity fraud was discovered when a debt collector
or creditor contacted the consumer," says Rubina Johannes, research
analyst for Javelin Strategy & Research, which reported on a 2006
identity fraud survey.
These collectors and their supporters argue that the calling systems
provide benefits to both consumers and the creditors.
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Calling system benefits, according to
supporters |
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| Eliminates
dialing errors. The system maximizes customer's financial privacy. |
Efficient
and precise. The system makes good use of collection callers'
time and labor, and drops labor costs. |
| Meets government
call times. It restricts calls to specific area codes within
the calling times. |
Controls
cost of credit for all consumers. |
| Educates consumers.
The automatic dialer allows consumers to learn about their accounts
and arrange payments. |
Avoids
unnecessary delinquencies and defaults by keeping consumers
informed about their accounts. |
Financial institutions use predictive dialers regularly,
according to the American Bankers Association and the Consumer Bankers
Association. And they don't just use them for overdue accounts.
They use predictive dialers to contact customers who have been mailed
a debit or credit card that hasn't been activated to determine if
the card was lost or stolen, or to let customers know that money
has been taken out of their checking accounts.
But more and more consumers are using cell phones
as their primary or preferred method of contact, and this has some
creditors and collectors worried. The estimated total number of
current U.S. subscribers is more than 215 million, according to
the Cellular Telecommunications & Internet Association, or CTIA.
Six percent of U.S. households use only wireless phones.
This trend is creating a problem for creditors and collectors who
say some consumers use their cell phone numbers on their credit
applications.
Verizon Communications' wireless phone unit is the
second-largest wireless provider in the country, with 53 million
wireless customers. It supports a limited order that calls for the
commission to make it clear that customers who give a creditor only
their cell phone numbers to contact them regarding their account
have provided "prior express consent" for creditors and collectors
to use automatic dialers.
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