Debt collectors claim that a new federal regulation being proposed could drastically cut their auto dialing activities -- and, in the end, hurt consumers, an article revealed.

The new rule, proposed by the Federal Communications Commission will work to control the use by telemarketers of pre-recorded, automatically dialed "robocalls." For the first time, debt collectors and others could potentially be prohibited or substantially restricted from using auto dialers, to contact credit card holders and other consumers through their cell phones.

Representatives of debt collectors think this is idea could cause more harm than good, for example if you owe money you forgot about, or if there's a problem with your credit card or account and you can't be reached, bad things will continue to take place while you are completely unaware.

Many consumers nowadays no longer possess land lines and instead rely dominantly on cell phones. Within this, lies the problem of being able to contact those consumers in a quick period of time when an issue arises.

"First of all, consumers are using their cell phones more and more, and most want to know if there's a problem or if their account is overdue," said Mark Schiffman, executive director of the ACA International Education Foundation, a group that represents and serves credit and collection professionals. "If a debt collector calls and it's legitimate, and they can't get a hold of you, there could be a negative impact on your credit rating; you might go into default, and so on."

"It is true that more and more consumers are moving away from land lines and depending only on their cell phones," said David Jones, president of the Association of Independent Consumer Credit Counseling Agencies. "Therefore, the collectors have a point."

Each year, the Federal Trade Commission works to create a list of top consumer complaints. Debt collectors almost always predictably come in at No. 2 on the list, right after those who commit identity theft. Debt collectors were responsible for 119,549 complaints in 2009, according to the FTC (News - Alert).

In February 2011, Consumers Union and the East Bay Community Law Center reported that debt collectors were harassing a rising number of consumers about unsubstantiated debts. The groups urged federal and state regulators and lawmakers to find ways to better protect consumers, the article stated.

"The fly in that ointment is the poor reputation that collectors have -- in many cases, well-deserved," Jones said. "That is one reason why the FCC (News - Alert) wants to restrict their access. However, creditors have every right to contact debtors who are delinquent, and delinquent debtors should expect to be so reminded."

The fact that Americans currently owe around $800 billion in credit card debt, represents this point, according to Schiffman: "We have to be able to reach the consumer to have that conversation."

The proposed FCC action will be designed to integrate its robo-call regulations with those issued separately by the Federal Trade Commission.

"Because of recent rule changes by the FTC, businesses now operate under different robo-call requirements depending on whether they are subject to both the FTC's and the FCC's rules, or only to the FCC's," FCC Chairman Julius Genachowski (News - Alert) said when his agency's revisions were proposed in January 2010. "For consumers, this may be confusing."

Under the proposed partnership, both the FCC and the FTC would outlaw robo-calls by telemarketers to land lines and cell phones, even when the caller has previously established a business relationship with the consumer, unless that consumer specifically opts in to receive such calls, the article stated.

The regulation would also make it easier for consumers to opt out of future robo-calls. Certain exemptions will remain, including those for tax-exempt charities, health care organizations, political campaigns, etc.

Robo-calls by true telemarketers already are prohibited to cell phones in almost all situations. Until now, however, debt collectors were allowed to make robo-calls to cell phones, according to Schiffman, if they had written permission from the consumer.

A crucial point however in this argument, is the requirement of written permission was once considered to be met if the debtor had written the cell phone number on his or her credit application, contact information or any other document related to the account, according to Schiffman.

Under the FCC's proposed rule, this would be a thing of the past. If the regulation is adopted, debtors would have to specifically provide written permission, before they could be contacted by auto-dialers through their cell phone.

The debt collection industry considers this a huge obstacle that it may not be able to overcome.