The Telephone Consumer Protection Act celebrates its 25-year anniversary this year. It was introduced to address consumers “outraged over the proliferation of intrusive, nuisance calls.”1 A quarter of a century on, it’s fair to say it’s not been wholly successful. Plenty of outrage remains – and not just on the part of consumers.
TCPA litigation is now a booming business, as a Senate Committee heard earlier this year.2 With 3,710 cases in 2015, TCPA cases are the second most common type filed in federal courts. Consumer complaints to the Federal Trade Commission, the agency responsible for implementing the act, meanwhile, number hundreds of thousands a month.
For collections, the TCPA constitutes a substantial challenge: in June, one large bank agreed to a $16.3 million settlement over debt collection calls to mortgage borrowers; in May a top debt buyer agreed to pay $18 million. ACA International’s white paper notes in 2014, average attorneys’ fees for a TCPA class action settlement were $2.4 million while the average individual consumer received $4.12.
“The stark disparity in the damages received by consumers relative to the fees retained by attorneys undermines the initial purpose of the TCPA, rendering it more a tool for attorney enrichment than consumer protection,” ACA’s white paper argued.3
Part of the problem, the white paper notes, is the 1991 Act is outdated, while the FCC has taken an expansive approach to its interpretation.
“This combination, an outdated statute and impossible-to-comply-with regulations, has created an uncertain environment for businesses struggling to decipher how to communicate with consumers using modern communication technology without inadvertently exposing themselves to enormous liability risk,” the white paper stated.
Certainly the FCC’s Declaratory Ruling4 on the TCPA issued last July hasn’t helped. Far from easing the burden on businesses by bringing clarity to the rules, the FCC significantly tightened restrictions on business.
The ruling is particularly tough on calls to cell phones – a key issue since half of Americans, and most millennials, have no landline. Keeping track of cell numbers is also complicated by consumers who frequently change carriers and old numbers are reissued to new users: over 100,000 numbers are reassigned every day.5
The TCPA was updated in 2013 to require consumers’ express permission to call their cell using an automated telephone dialing system (ATDS). The FCC’s July 2015 ruling strengthened this, though, confirming that text messages counted as calls and adding burden on businesses in a number of other ways.
First it stated consumers could revoke consent in any way they find reasonable, and the business can’t limit this. A consumer may revoke consent to a bank, for example, just by asking a teller not to call anymore.
Second, the ruling refused to limit the definition of an ATDS. According to the FCC, it should include all technologies that have the “capacity” to dial numbers without human intervention – whether they have the “present ability” to do so or not. It ruled out a rotary dial telephone as an auto-dialer, but not much else.
Finally, for reassigned numbers, it gave businesses a “one-call window” to learn of the reassignment; the second call results in liability – even if the first was unanswered or the person (or voicemail) answering failed to state the owner of the number had changed.
“If you have the bad luck of inheriting a wireless number from someone who wanted all types of robocalls, we have your back,” as the FCC chairman Tom Wheeler put it.
Working Within the Confines of the TCPA
ACA launched legal action against the FCC within hours of the Declaratory Ruling being issued, and others have joined in the fight. Those collecting government debt received a pass from the TCPA in December 2015. Others probably shouldn’t count on any immediate relief, however.
Legislative help looks unlikely. Despite the case load in courts, there remains significant support in Congress for the TCPA – “one of the preeminent and most loved consumer protection statutes we have”, as one senator said during the recent committee hearing.
“[T]he idea of allowing greater access for robocalls to consumers’ cell phones without their consent is an idea that is dead on arrival with the American people,” he added.
This ignores the millions of consumers with no other way of being contacted, and who actually want to take care of their debts. Nevertheless, it indicates the political opposition to any significant relaxation of TCPA rules.
For now, therefore, businesses have little option but to try to comply, and employ best practices for working within the confines of the TCPA:
• Avoid Using ATDS with Cell Phone Numbers Alternative dialer technology that requires manual intervention – some of which courts have confirmed meet TCPA requirements – already exist. So do outsourcers that manually dial the phone number and transfer on answer. Before either, though, businesses need to ensure they’re scrubbing portfolios on a daily basis to remove cell phone numbers from their ATDS.
• Try to Ensure Reassigned Numbers Do Not Trip You Up Existing databases are not comprehensive, but scrubbing cell phone numbers for current ownership will minimize the risks. If the company only has a cell phone for a consumer, it may also be worth doing a phone search for a landline to call via ATDS.
• Companies Must Have Good Systems and Procedures to Track Revocations of Consent This will be much easier if they proactively put in place services they can offer and encourage (but not require) consumers to use for revocations by phone, email, mail, online or in person.
There is no panacea. The challenges posed by the TCPA are stronger than ever after 25 years. However, businesses that want to see the next 25 have little choice but to try to ensure their systems and controls are strong enough to meet them.
1 ftp://ftp.fcc.gov/pub/Bureaus/OSEC/ library/legislative_histories/1420.pdf
2 http://www.commerce.senate.gov/public/ index.cfm/hearings?ID=7FDEF85EBF1F- 475C-BE3F-1E011EA5A909
3 http://www.acainternational.org/files. aspx?p=/images/39929/aca-wp-modernizetcpa_ final.pdf
4 https://apps.fcc.gov/edocs_public/attachmatch/ FCC-15-72A1.pdf
5 https://apps.fcc.gov/edocs_public/attachmatch/ FCC-15-72A1.pdf