A recent decision of the U.S. District Court for the Western District of New York holds that prerecorded debt collection calls do not violate the Telephone Consumer Protection Act (TCPA), even if they are made to an individual who does not owe the debts triggering the calls.

In Santino v. NCO Financial Systems, Inc., issued on February 24, 2011, the District Court agreed with other federal court rulings, including by the U.S. Court of Appeals for the 11th Circuit, that such calls are protected by exemptions from the TCPA’s consent requirement found in Federal Communications Commission (FCC) regulations. (Click here to read an earlier legal alert on the 11th Circuit’s decision in Meadows v. Franklin Collection Service, Inc.)

The TCPA prohibits non-emergency prerecorded calls to a residential telephone line without the called party’s consent, unless the call is exempt under orders or rules of the FCC. Regulations adopted by the FCC include exemptions for calls made (1) to a person with whom the caller has an established business relationship, and (2) for a commercial purpose that does not include an unsolicited advertisement or a telephone solicitation. In connection with its rulemaking and in subsequent orders, the FCC took the position that debt collection calls fall within such exemptions.

In granting summary judgment in favor of the debt collector on the plaintiffs’ TCPA claim, the Court specifically refused to follow the 2006 decision of the U.S. District Court for the Eastern District of Pennsylvania in Watson v. NCO Group, Inc. That decision held that the FCC exemptions did not apply to misdirected collection calls. The Court in Santino found that Watson failed to give appropriate judicial deference to the FCC’s regulations and orders.

In addition to their TCPA claim, the plaintiffs also asserted a claim under the Fair Debt Collection Practices Act (FDCPA), which was not addressed in the decision. In Meadows, the 11th Circuit found that the debt collector was not shielded from FDCPA liability, even though its calls did not violate the TCPA.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). In addition to having vast experience in defending all manner of TCPA and FDCPA lawsuits, the Group has counseled a number of clients on establishing auto-dialing and monitoring protocols. For more information, please contact Group Chair Alan S. Kaplinsky, 215.864.8544 or kaplinsky@ballardspahr.com; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or rosenblum@ballardspahr.com; John L. Culhane, Jr., 215.864.8535 or culhane@ballardspahr.com; Barbara S. Mishkin, 215.864.8528 or mishkinb@ballardspahr.com; or Mark J. Furletti, 215.864.8138 or furlettim@ballardspahr.com.

 


 

 

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