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White House defends controversial debt collection measure

Oct 10, 2011 Mike Garretson

The Obama administration is pushing for a controversial measure that would allow private debt collection agencies to contact delinquent consumers via cellphone in cases of funds owed to the government. The measure is part of the president's proposed $3 trillion deficit reduction plan and aims to leverage revenue from outstanding student loans and other debts. Consumer groups and some Democrats have already expressed hesitation over the measure, as they argue it will lead to more abusive tactics by private debt collectors. "Enabling robo-calls (to cellphones) is just going to lead to more harassment and abuse, and it's not going to help the government collect more money," Lauren Saunders of the Boston-based National Consumer Law Center told ABC News. "People aren't paying their student loans because they can't find a job." Proponents have been advocating for the bill in light of the dwindling use of landline telephones and, hence, reduced contact channels. However, as debt collection activity has been on the rise in recent months in response to recession-era debts, scrutiny of debt collection tactics has also been mounting.