No one appreciates telemarketers, but a 27-year old law designed to protect consumers against unwanted autodialers may be detrimental to mortgage servicers. The 1991 Telecommunications Consumer Protection Act (TCPA), originally passed to combat a rise in telemarketers using autodialers, prohibits the use of autodialers to contact any consumer via cell phone without first receiving consent.
However, according to the Urban Institute and a report from the US Treasury, these “robocall” laws may be preventing mortgage servicers from reaching customers when that contact could be helpful. For example, a servicer may not be able to inform borrowers about mortgage relief options or warn about scams, reach thousands of borrowers with time-sensitive information during natural disasters such as hurricanes, especially when landlines may be down and cell phones are the only option.
TCPA fines can cost anywhere between $500 or millions of dollars, adding onto the already high costs of servicing a mortgage, keeping more servicers from reaching out to borrowers via cell phone. Even if a borrower consents to receive calls from a borrower, the Act does not account for a transferred number.
Fintech may be the answer, though Urban Institute notes that the mortgage servicing industry has been slow to adopt these technologies. According to the J.D. Power consumer survey, only 20 percent of customers use fintech from the servicers, while mortgage servicers’ use of fintech has declined two percent since 2016.
However, Urban notes that consumers who actually consented to receive alerts to their cell phones reported an average of 11 percent higher satisfaction rankings than the average. Urban states that although the TCPA should continue to address telemarketer and fraudulent robocall concerns, there needs to be a rework to the nearly 30-year old Act that reassesses its treatment of mortgage servicers and adapts to changing times.
In a letter addressed to the Federal Communications Commision (FCC), the National Mortgage Servicing Association (NMSA) outlined their suggestions for changes to the Act. One suggestion made by the NMSA includes a re-examination of the definition of an autodialer. For example, it should be made clear the definition of an autodialer does not include dialing from a list and that the technology used must include both generating a phone number in random or sequential order and calling the generated number.
In addition, the NMSA supports the FCC's creation of a reassigned number database as well as a "safe harbor" for businesses to check the database. The NMSA also supports the integration of a more structured process in order for consumers to revoke consent to receive calls from a company, giving consumers peace of mind while reducing the headache for businesses to trying to comply with regulations.
Exempting servicers from the Act would give servicers the opportunity to reach out when it would benefit the borrower, and allow borrowers to identify numbers that have been transferred. Another option would be to temporarily exempt servicers from from Act requirements specifically during natural disasters in order to send out time-sensitive information.