Industry efforts to persuade the Federal Communications Commission (FCC) to clarify its rules under the Telephone Consumer Protection Act (TCPA) recently received support from a group of 15 members of the U.S. House of Representatives.

In a letter to the FCC, the lawmakers urged the agency to act on the Petition for Rulemaking filed by ACA International, an international trade organization of credit and collection companies, in January 2014 asking the FCC to clarify several issues under its TCPA rules. In their letter, the lawmakers observed that legal uncertainty about the rules has fueled the explosion of TCPA consumer class actions in federal and state courts that the industry is now facing. (TCPA penalties are draconian, with violations potentially yielding damages of $500 per violation or actual damages—whichever is greater—and a tripling of damages for willful violations and unlimited class action liability.)

The TCPA prohibits autodialed or prerecorded non-emergency calls to cell phone numbers unless the call is made with “the prior express consent of the called party.” In its petition, the ACA asked the FCC to:

  • Confirm that all predictive dialers are not necessarily “automatic telephone dialing systems” (ATDS)
  • Confirm that for purposes of the TCPA’s definition of ATDS, which looks to the “capacity” of equipment to perform certain functions, “capacity” means the equipment’s “present ability” to perform such functions
  • Clarify that “prior express consent” given for debt collection calls attaches to the person incurring a debt, and not the specific wireless telephone number provided by the debtor at the time the debt was incurred
  • Create a safe harbor for non-telemarketing calls made to a lawfully obtained number (such as a wireless number obtained with prior express consent) when, without the caller’s knowledge, such number is no longer maintained by the party intended to be called, or when the caller has no way of knowing that the called party would be charged for the call

The formal comment period on ACA’s petition closed in March 2014. Among the leading financial services industry groups that filed comments in support of the petition were the American Bankers Association, the American Financial Services Association, and the National Council of Higher Education Resources.

Ballard Spahr has created a TCPA Task Force to assist clients in navigating the complex and challenging issues that arise under the TCPA. The task force, which comprises regulatory attorneys and litigators, assists clients by providing counsel on avoiding TCPA liability, including reviewing policies and practices and helping to design mobile text message and prerecorded and autodialed call campaigns. It also assists clients in handling scrutiny from regulators, including preparing for examinations, responding to investigations, and defending against enforcement actions. Task force members also defend clients against TCPA class or individual actions.

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).

For more information, please contact CFS Practice Leader Alan S. Kaplinsky at 215.864.8544 or kaplinsky@ballardspahr.com, John L. Culhane, Jr., at 215.864.8535 or culhane@ballardspahr.com, or TCPA Task Force Chair Mark J. Furletti at 215.864.8138 or furlettim@ballardspahr.com.


 

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