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Telemarketers to Target Cell Phones

posted Apr 27, 2012, 1:48 AM by Resty Manapat

A new bill introduced into the U.S. House of Representatives seeks to let businesses contact cell phone customers using an auto dialer, a move that highlights increasing regulatory attention on consumers’ shifting mobile use.

The “Mobile Informational Call Act of 2011″ proposes that businesses can use an automatic dialing system to contact cell phone customers for “informational purposes.” This practice, commonly called “robocalling,” gives businesses the ability to call a list of numbers at great speeds and broadcast pre-recorded messages across many telephone numbers at once.

Supporters of the bill include financial institutions, air transporters, utility companies, and loan servicing organizations, among others. Proponents state that current cell phone regulations have not kept pace with technology, and hope to gain greater accessibility to consumers who may not have a land line and to bypass current regulations that require customers to “opt in” before they can receive autodialed calls.

Those in favor say passage of the bill would open an easy channel for companies to convey critical information to customers, such as flight cancellations, data breaches, account changes, or fraud alerts.

On the other hand, consumer advocates have raised concern that the proposed bill would also open a new avenue for telemarketers. The Federal Trade Commission banned telemarketers from “robocalling” cell phones in 2009 and subjected them to high fines if they did so.

Under the proposed bill these rules would be relaxed, allowing debt collection agencies authority to contact customers with automated calls on their cell phones. These calls are the source of more complaints to the FTC than any other industry.

Right now, businesses are allowed to contact mobile phones by manually dialing the number and can only use an automatic dialing system with prior consent from the cell phone customer. Past email hoaxes have urge cell phone customers to put their mobile devices on the national “do not call list,” but most telemarketers were in reality banned from calling consumers on their cell phones already.

Current FTC regulations regarding autodialing were passed when most cell phone customers also had landlines and many paid a high price-per-minute for incoming calls. The regulation now on the House floor takes into account that most mobile users today have flat-rate plans, so they argue the cost burden of autodialing would be less for the consumer.

Consumer advocates will continue to put pressure on regulators to make sure there are provisions that minimize potential abuse in the proposed bill, but the change in regulations may also provide an opportunity to update debt-collection and telemarketing laws to ensure that cell phone users maintain their rights in a changing communications landscape.