Regulations proposed by the Federal Communications Commission (FCC) to implement the Truth in Caller ID Act of 2009 (TCIDA) lack exemptions for legitimate telephone calls, such as calls from creditors and debt collectors. Unless consumer financial services providers work with counsel to urge the FCC to include appropriate exemptions, such providers could be exposed to the TCIDA’s draconian forfeiture penalties for legitimate calls involving no legally false information.

Comments on the proposal are due by April 18, 2011, and reply comments are due by May 3, 2011. The FCC has until June 23, 2011, to issue final regulations. In a webinar on April 12, 2011, Ballard Spahr attorneys will provide an overview of the Telephone Consumer Protection Act (TCPA), Federal Trade Commission and FCC regulations and declaratory rulings; key case law developments; the TCIDA; the FCC’s proposed TCIDA regulations; current “hot button” issues giving rise to TCPA litigation; and tips and strategies for successfully defending individual and class action TCPA cases. Click here for more information or to register.

Enacted on December 23, 2010, the TCIDA amended the Communications Act of 1934 to prohibit any person within the United States, unless excepted by FCC regulations, “to cause any caller identification service to knowingly transmit misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value.” The prohibition applies to calls made using any telecommunications service or Internet protocol-enabled voice service. It does not define the phrases “misleading or inaccurate caller identification information,” “cause harm,” or “wrongfully obtain anything of value.”

The FCC’s proposal would similarly leave these phrases undefined and merely parrot the statutory prohibition. In its discussion of the proposal, the FCC requests comment on whether this approach “provides sufficiently clear guidance about what actions are permitted.” It also asks whether the terms used in the proposed rules “are sufficiently well understood concepts that the public reasonably should know which actions are prohibited.” The obvious answer to the FCC’s questions is that more guidance is needed. Without further definition, there will be a substantial risk of the TCIDA snaring calls by creditors and debt collectors that do not involve legally false information simply if the person called can allege some breach of privacy, emotional distress, or a mistake or technical deficiency of some kind as to any amount paid as the result of the call.

The FCC’s proposal would define caller ID information to include “any (i) telephone number; (ii) portion of a telephone number, such as an area code; (iii) name; (iv) location information; or (v) other information regarding the source or apparent source of a telephone number.” As a result, the TCIDA could apply to collection calls in which a local number is displayed for a call made from a different area code or a foreign country, even if the caller owns the local number, the call is routed through the local number, or the caller may be contacted through the local number. In fact, in its discussion of the proposal, the FCC labels as “potentially misleading” calls in which the displayed phone number is “not geographically associated with [the caller’s] location,” and requests comment on whether an exemption is needed to avoid stifling “innovative new services, such as call back services, or services that involve manipulation of area codes or location.” Other circumstances not mentioned by the FCC in which collection calls could potentially be deemed “misleading or inaccurate” under the TCIDA include those where a registered name under which the caller does business is displayed, rather than the caller’s legal name, or an abbreviated version of the caller’s legal name is displayed, rather than the caller’s complete legal name.

Although the TCIDA does not include a private right of action, it authorizes state Attorneys General and any other state officers authorized to bring actions on behalf of state residents to bring parens patriae civil actions in federal court to enforce the new prohibition, or to impose draconian civil forfeiture penalties of up to $10,000 per violation, up to $30,000 per day for each day of a continuing violation, or up to $1 million for any single act or failure to act. Civil actions may be filed whenever a state Attorney General or other officer “has reason to believe that the interests of the state’s residents have been or are being threatened or adversely affected” by a TCIDA violation or the FCC’s implementing regulations. The TCIDA also provides that violators are subject to criminal fines and imprisonment.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its ability to fairly and effectively present industry concerns in comment letters addressed to state and federal regulatory agencies, 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). The litigators in the Group regularly defend all manner of TCPA and Fair Debt Collection Practices Act cases. For more information, please contact Group Chair Alan S. Kaplinsky, 215.864.8544 or; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or; John L. Culhane, Jr., 215.864.8535 or; Martin C. Bryce, Jr., 215.864.8238 or; Keith R. Fisher, 202.661.2284 or; Barbara S. Mishkin, 215.864.8528 or; or Mark J. Furletti, 215.864.8138 or




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