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Congress Targets Robocalls: How Will It Affect Borrowers and Mortgage Service Providers?

The increase in robocalls in the U.S. has been so extreme that lawmakers are taking drastic measures with new legislation. According to the latest figures, the Federal Trade Commission received over 3.7 million robocall complaints in 2018, and the FCC received another 232,000 complaints.

While there remains a Do Not Call Registry that citizens can join to prevent certain calls, many robocalls are coming from fraudulent sources that don't care about the law. If the new legislation does pass, it won't have much of an impact on the businesses, such as mortgage service providers, that continue to act within legal guidelines.

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The Growing Problem of Robocalls and Spoofing

Most Americans today carry a smartphone or at least have a landline phone with caller ID. While these are meant to keep us in touch with people and businesses we know, these devices are becoming a burden thanks to the soaring number of automated calls.

According to Seattle-based software company Hiya, Americans received 26.3 billion robocalls last year alone, which was a stunning 46 percent increase from the prior year. According to the FTC, advances in technology have allowed robocallers to target thousands of phone numbers per hour. People mistakenly believe that they are protected by registering with the Do Not Call Registry, but when the robocallers are criminals, this isn't very effective.

One tactic that is common is called "spoofing," where the robocallers make it appear as if the call is coming from your neighborhood (same area code and prefix). This increases the chance that a caller will answer the phone. These nuisance callers are often scammers who pretend to be representatives of the IRS, charities, or debt collection agencies.

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Addressing Robocalls Through New Legislation

Sen. John Thune (R-S.D.) and Sen. Ed Markey (D-Mass) are co-sponsoring the TRACED Act, which is meant to cut down on robocall scammers. This new law is intended to give regulators more time to locate scammers as well as increase the penalties for those who are caught.

The legislation broadens the FCC's authority to impose civil penalties of up to $10,000 per call for scammers that intentionally break the law, and it directs the FCC to help consumers to avoid calls from unwanted numbers.

Additionally, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) has sponsored a bill that closes an often exploited legal loophole by scammers and robocallers. It requires that telecom companies block any services coming from "spoofers" for free.

Will a New Law Affect Borrowers and Mortgage Service Companies?

One thing new legislation won't do is impact companies that are using the nation's phone lines legally. The laws in place regarding who a business is able to call and for what purpose aren't likely to change.

Currently, businesses that are attempting to collect a debt can make both live and pre-recorded calls. Businesses can remind customers about appointments but are not permitted to make pre-recorded calls that offer to sell services or reduce debt.

Even if a client is registered on the Do Not Call Registry, you can lawfully call them for up to 18 months after their last payment or purchase. If a consumer makes an application or inquiry with your company, you are permitted to call them for three months afterward. However, if a consumer asks you not to call, you will need to honor that request.