RESOURCE

Will Collectors of Government-backed Debt turn to P2P texting?

August 10, 2020

U.S. Supreme Court: Barr vs. AAPC

In the case decided by the U.S. Supreme Court on July 6, 2020, Barr vs. American Association of Political Consultants (AAPC), the issue at stake was the law that governs the use of auto-dialers to phone and text known as the TCPA (Telephone Consumer Protection Act). The AAPC argued that the law should be struck down. They posited that since autodialers could be legally used to collect government-backed debt, autodialers should also be able to be used for political speech.


The court ruled against the AAPC and upheld the TCPA. Further, the ruling immediately barred use of autodialers for the collection of government-backed debt without the express written consent of the debtor.


Government-Backed Debt Collection Disruption

The U.S. government guarantees more than $1.5 trillion in loans to more than 7 million people.  More than a million people go into default every year.  By 2023, it is projected that more than 40% of these loans will be in default.  Autodialers have historically been a very important technology used by the companies that collect government-backed debt.  

The Barr decision will require these companies to retool their processes and tech -- autodialers can no longer be used.

The Peer-to-Peer Texting Opportunity

Peer-to-Peer (P2P) utilizes technology to enable human-powered text messaging with consumers at scale. Each message is manually sent, but with the aid of sophisticated technology, the messages can be field-merged, edited and personalized, and centrally managed with full oversight and analytics. With P2P texting, a large volume of texts can be manually sent in a short period of time. Done properly, P2P texting can be an extremely effective engagement tool that will drive meaningful results.

A week and a half before the Barr ruling, the FCC’s Consumer and Governmental Affairs Bureau issued a long-awaited ruling on a petition filed (in May 2018!) by the P2P Alliance.  The P2P Alliance asked the Commission to clarify that text messages sent via peer-to-peer messaging platforms are not subject to the TCPA’s restrictions regarding prior express consent, primarily due to the fact that each message is manually sent.

The FCC ruled that the high throughput of peer-to-peer texting platforms doesn’t automatically qualify these platforms as autodialers.  Rather, the ruling focused on active and affirmative manual dialing:  

“if a text platform is not capable of storing or producing numbers to be called using a random or sequential number generator and dialing such numbers automatically but instead requires active and affirmative manual dialing, it is not an autodialer and callers using it are, by definition, not ‘evading’ the TCPA.”

Yesterday, the Supreme Court finally agreed to take on the Duguid v.Facebook case, a case that will hopefully settle the massive Circuit split regarding the definition of an autodialer. Circuits across the Country are currently split between whether the ability to dial numbers automatically from a stored list is enough to be an autodialer or whether the capability to store and produce telephone numbers using a random or sequential number generator is required.

The Future of Debt Collection?

I am not a lawyer and this is not legal advice, but my key takeaway is that while the Barr decision put a stake through the heart of use of autodialers for private collectors of government-backed debt collection, the recent FCC ruling suggests that peer-to-peer texting is a viable replacement technology for this use case.

Debt collection companies may benefit from switching their now illegal autodialer phone call technology with an industry leading peer-to-peer texting solution.


Peer-to-Peer Features

When evaluating peer-to-peer texting technology, debt collection companies should ensure that the vendors and software offer a robust, enterprise-grade solution with proven ability to scale.  The software should be “conversation first” but should also have the ability to integrate seamlessly with backend data sources. Further, the software should be able to drive action and data collection.


Moving Forward

The Prompt.io platform has every qualification and feature required to service this use case:

  • A five year track record powering messaging for leading financial services firms.
  • Enterprise-grade security and infrastructure.
  • Peer-to-peer texting technology trusted by multiple state political parties, Gubernatorial candidates, and tech-savvy politicians on both sides of the aisle.
  • Prompt.io is the only software in this space that allows for complex data collection and transactions inside a text conversation, a technology we call PromptExchange.
  • A proven team ready to dig in and move quickly -- successful deployments of peer-to-peer texting can take less than a day.


To contact us, text PROMPT to 855-950-3777 or visit www.prompt.io.


Phil Gordon

CEO and Founder