ACA International staff and members discussed concerns with text message blocking on a recent ACA Huddle. Editor’s note: This article is available for members only.
2/22/2021 9:00
In recent months ACA International and member companies like Solutions by Text, which works with clients on building text messaging communication platforms, learned that cellphone carrier T-Mobile’s Code of Conduct update in September 2020 now prohibits debt collection text messages (Section 5.2 Disallowed Content).
“The misconception of the carriers is that this is an inconvenience of some kind,” said Mike Cantrell, president of Solutions by Text, during a recent ACA Huddle discussion on the issue for members.
Cantrell, who was joined by and Amanda Payton, vice president of compliance and risk management at Solutions by Text; Rick Perr, co-managing partner of Kaufman Dolowich Voluck; Leah Dempsey, ACA’s vice president and senior counsel of federal advocacy in Washington, D.C., and Colin Winkler, ACA’s corporate counsel, reviewed the risks of text message blocking, what ACA members can do and how ACA is approaching the issue from a policy standpoint during the ACA Huddle. A recording is available here.
Essentially, the issue comes down to T-Mobile’s decision to not allow text messages between companies in certain industries, including debt collection, and consumers after Sept. 1, 2020.
Cantrell said debt collection was not the only industry impacted by the change.
Auto and mortgage lenders are also impacted.
Payton also noted that Sprint customers, even after the merger with T-Mobile in 2020, are reportedly not currently impacted by the change in text message allowances.
“T-Mobile is preventing companies from getting access to the gateway altogether and isn’t approving short codes for certain industries,” Payton said. “They have almost complete authority to control whatever goes over their networks.”
Companies use SMS short codes, five- or six-digit numbers, to send automated messages to consumers who opt-in.
These messages can contain payment reminders and notifications from debt collectors. Payton said each message, pursuant to current regulations, contains the option for recipients to automatically reply “STOP” to opt-out of receiving messages.
“This is impacting clients’ new accounts even if consumers opt-in to receive messages,” Payton said. “If a client was issued a short code before September 2020, we are not seeing any impact on the ability to send messages.”
What Can Companies Do?
When T-Mobile released the code of conduct, it said companies in the impacted industries could apply for an exception to send text messages. Cantrell said Solutions by Text was recently granted preliminary approval from T-Mobile for future debt collection use cases.
It is unclear how the exception process will work for other companies or if exceptions will even be available.
Payton said she recommends companies and any impacted consumers reach out to T-Mobile directly to get more information and continue to follow all laws related to compliance when sending texts.
“We want this industry to have the opportunity to send text messages to consenting consumers,” Payton said. “I really feel like this will result in misinformation.”
Policy Considerations
The fact that consumers have opted-in to these messages and that the Consumer Financial Protection Bureau has recognized a consumer preference for this form of communication raises serious public policy concerns, Dempsey said.
ACA’s advocacy team has been meeting with legislators and regulators in Washington, D.C., to discuss the issue and will be leading outreach among many stakeholders.
“We’d really like to get a clear picture of the blocking that is happening,” Dempsey said.
Under the CFPB’s debt collection rule, Perr said, electronic communications, including text messages, are permissible.
Despite T-Mobile’s decision to not allow messages under the new code of conduct, companies should continue to work with their compliance teams, SMS providers and attorneys on compliant text messages plans, he said.
“You also have to consider the content of the message,” Perr said. “If you’re texting, you have to make sure you comply with state and federal laws and certain written requirements. The good news, in short, is all of these groups of people that are stakeholders are very bullish on text messaging and it will be the wave of the future.”
Remember, in the CFPB’s final rule section on text messages, a debt collector may communicate with a consumer via text message to a given telephone number if it has the consumer’s express or implied consent to do so, ACA previously reported.
“If you’re getting the consumer’s consent because they texted you or verified their number, for T-Mobile to come in and block the message, they are prohibiting consumers from having that communication channel that they want,” Winkler said.
In either case, the debt collector must take steps to ensure that the telephone number remains assigned to the consumer, which means the debt collector must ensure that within the last 60 days either:
(1) the consumer has texted the debt collector using the telephone number and has not since opted out of text messages;
(2) the consumer has provided or renewed consent for the debt collector to send text messages to the number; or
(3) the debt collector has “confirmed, using a complete and accurate database, that the telephone has not been reassigned from the consumer to another user since the date of the consumer’s most recent consent [i.e., implied consent via text message sent from the consumer to the debt collector or express consent given directly to the debt collector] to use that telephone number to communicate about the debt by text message.”
The rule also sets forth “procedures” for electronic communications (email and text message) and provides that if a debt collector adopts and documents conformance with those procedures, it will be deemed by regulation to have “maintain[ed] procedures that are reasonably adapted to avoid a bona fide error” and designed to avoid third-party disclosures otherwise prohibited by Section 1006.6(d)(1) and Fair Debt Collection Practices Act Section 805(b).
If you are currently experiencing text message blocking, email Leah Dempsey at [email protected] to share your information.
Thank you to ACA Huddle sponsors Connect International, Solutions by Text, Pay N Seconds and QBE.