Banks want to open cellphones to robocalls

If the nation's bankers and debt collectors have their way, robocalls could soon become as routine on cellphones as they are on household landlines.

Industry lobbyists have asked the Federal Communications Commission to exempt them from rules that largely bar computer-generated cellphone calls and texts to wrong numbers or without a recipient's permission. Their goal: to be shielded from liability, specifically lawsuits. Industry lobbyists say they have not been inundated with suits, but that possibility threatens to raise costs and chill incentives to ensure customers receive alerts about credit card fraud, identity theft or other important information.

Dozens of consumer groups, led by the National Consumer Law Center, ­­counter that the ability of consumers to sue if they have been harassed by cell calls and texts provides an effective deterrent and makes companies take greater care. They say the industry already has tools to alert customers, including by cellphone, in emergencies, such as when fraud is suspected.

Two of the biggest groups behind the push — the Consumer Bankers Association, whose members include Bank of America, Citibank, JPMorgan Chase and the Association of Credit and Collection Professionals — want to be able to call wrong numbers without reprisal, as long as a company stops once a recipient informs it of the error. The problem, says NCLC attorney Margo Saunders, is that's often difficult; letters seem to get lost or verbal requests aren't believed.

A third big lobby group, the American Bankers Association, whose member banks overlap with the Consumer Bankers, seeks an additional exemption that is related but narrower: protection from liability for calls with vital information "using an automatic telephone dialing system or an artificial or prerecorded voice without the recipient's prior express consent," ABA attorney Virginia O'Neill wrote the FCC.

Saunders says that in addition to already being able to text or call a cell in an emergency, banks have sufficient means — email, ATMs, bank websites, the U.S. mail — to ask consumers if they want alerts. Bankers say consumers often ignore requests from those venues and are much more likely to read a text. A dozen U.S. senators, led by Ed Markey (D-Mass.), aren't swayed: They wrote two weeks ago to urge the FCC to "reject" industry's requests because they would "weaken or undermine effective" rules that provide cellphone users "convenience and privacy."

At stake is industry's ability to follow consumers in their ongoing mass migration from landlines to cellphones. Households with only wireless phones have gone from just under 31% in 2011 to 44% last year, a Centers for Disease and Prevention survey found.

The push comes amid growing complaints to the FCC. "Consumers hate unwanted calls and texts," the NCLC and other consumer groups wrote the agency two weeks ago, noting that since 2003, "over 223 million Americans have attempted to preserve their privacy by putting their phone numbers on the National Do Not Call Registry," but that, even with that landline program, consumers made nearly 3.8 million complaints to the FCC about telemarketing calls, more than 2 million of which included a recorded message. Complaints specifically about robocalls doubled in two years to 100,000 in 2012.

Complaints to the FCC about unwanted wireless calls and texts totaled 73,079 in 2013, the most complete year available. In the first nine months of 2014, the number was 48,562, the agency says.

Keith Keogh, an attorney in Chicago who represents clients who allege they've been harassed by companies calling the wrong person, often because a cellphone number has been reassigned, suspects the industry's motives are broader than what they tell the FCC. "Once you give them an exemption, they'll figure out how to drive a truck through it," he says.

Keogh and the NCLC's Saunders cite several lawsuits they say show how indifferent industry can be about annoying messages. One plaintiff received 27,809 "unsolicited" text messages over 17 months from Yahoo! meant for the cellphone's previous owner, despite numerous requests to stop. Another, though not a Chase Auto Finance customer, was called by the company on "her cellphone over 80 times with pre-recorded calls relating to the debt of a third party."

The industry says such cases are the exception. Consumer groups say that's thanks to current rules and shows they should be tightened, not loosened.

Bankers, debt collectors and telemarketers have tried for years to loosen rules governing unsolicited calls and texts to cellphones. In 2011 an industry-backed bill in U.S. House of Representatives would have allowed robocalls to cellphones without recipients' permission and made it harder for states to intervene in instances of abuse. The bill's sponsors eventually withdrew it amid widespread, bipartisan criticism, including from the National Association of Attorneys General, who described "autodialed, prerecorded calls" as an intrusion whose annoyance is compounded on cellphones because "the recipient must pay for them." Financial industry lobbyists say their FCC filings differ from that legislation and speak for themselves.

The period for public comments on the requests is closed. An FCC spokesman would not comment on when the agency might make a decision.

Kathleen Day is a faculty member at the Johns Hopkins University Carey Business School. She is a lecturer with a specialty in financial crises and how they spread. Day previously taught at Georgetown University's graduate program in real estate and was a Washington Post business reporter who covered the financial services industry.