The Federal Communications Commission’s long-awaited changes to its rules under the Telephone Consumer Protection Act (TCPA) do not include the proposed limits on the use of prerecorded calls and automatic telephone dialing systems, or “autodialers,” by debt collectors and others not engaged in sales or telemarketing.

Under the final rule, adopted on February 15, 2012, autodialed or prerecorded collection calls and other “informational” non-sales calls to wireless numbers using such methods will not require a signed written agreement from the consumer, as had been proposed. Instead, such calls can continue to be made with only the consumer’s “prior express consent,” which can be written or oral.

Remaining in effect is the FCC’s earlier ruling that autodialed or prerecorded collection calls to wireless numbers are made with the consumer’s “prior express consent” if the consumer has given the cell phone number to the creditor for use in normal business communications, such as in a credit application.

For telemarketing calls, the final rule places new burdens on sellers and telemarketers not already subject to the Federal Trade Commission’s telemarketing rules. Entities under the FCC’s exclusive jurisdiction, such as banks, insurance companies, airlines and common carriers (including telephone companies), will need the consumer’s written agreement to make prerecorded telemarketing calls to residential telephone lines or autodialed or prerecorded calls to wireless numbers. The agreement must include a clear and conspicuous disclosure that the purpose of the agreement is to authorize autodialed or prerecorded calls, the cell phone number to which calls can be placed and the consumer’s signature. In addition, the agreement cannot be required as a condition of purchasing any good or service.

The final rule includes a requirement that all prerecorded telemarketing calls must provide an automated, interactive opt-out mechanism and modifies the existing rules for abandoned calls to require that the three percent abandonment rate be calculated for each calling campaign. There is no exception from the written agreement requirement in the final rule for prerecorded telemarketing calls to residential lines when the caller and consumer have an established business relationship. The FCC previously did not require the consumer’s “prior express consent” for prerecorded telemarketing calls to residential lines when the caller and consumer had an established business relationship.

The written consent requirement will be effective one year after the Office of Management and Budget’s approval is published in the Federal Register, with the established business relationship exemption to be phased out over the same period. The abandoned call rule and automated, interactive opt-out requirement will be effective, respectively, 30 days and 90 days from publication in the Federal Register of OMB approval.

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 lawsuits, the group has counseled a number of clients on establishing auto-dialing and monitoring protocols.

The group also produces the CFPB Monitor, a blog that focuses exclusively on important Consumer Financial Protection Bureau developments. To subscribe, use the link provided to the right.

For more information, please contact Practice Leader Alan S. Kaplinsky, 215.864.8544 or; Practice Leader Jeremy T. Rosenblum, 215.864.8505 or; John L. Culhane, Jr., 215.864.8535 or; Barbara S. Mishkin, 215.864.8528 or; or Mark J. Furletti, 215.864.8138 or

Copyright © 2012 by Ballard Spahr LLP.
(No claim to original U.S. government material.)


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