The Federal Communications Commission (FCC) recently issued a Public Notice requesting comments on a petition by the American Bankers Association (ABA) to exempt time-sensitive informational calls to mobile devices from the Telephone Consumer Protection Act's (TCPA’s) prior express consent requirements. The initial comments are due by December 8, 2014, and any reply comments must be submitted by December 22.

The TCPA requires companies using an automatic telephone dialing system (autodialer) or sending prerecorded calls to mobile devices to obtain consumers' prior express consent before making such calls. However, TCPA Section 227(b)(2)(C) authorizes the FCC to exempt, by rule or order, calls made to a mobile device if the called party is not charged for the call. The FCC recently used this authority for the first time when it ruled that package delivery notifications could be sent to consumers without their prior express consent. In that order, the FCC permitted delivery companies to send free informational text messages to consumers without their prior express consent, but only if the message complied with certain requirements.

The ABA's petition requests that the FCC use its authority to exempt four types of informational calls from the TCPA's consent requirements:

  • Fraud and identity theft alerts
  • Data security breach notices
  • Remediation messages to mitigate identity theft
  • Money transfer notifications

The ABA states that these types of notifications and calls "are critical to financial institutions' efforts to prevent fraud and identify theft." It argues that these calls must be made in a timely manner, and sending these notices via text message increases the probability that consumers will receive and open them. The ABA also asserts that an exemption is needed because of the threat of TCPA litigation.

The ABA petition would establish requirements on these informational calls similar to ones the FCC previously imposed on the exempt package delivery notifications:

  • Calls will only be made to consumers to whom the alert is directed.
  • Calls will identify the financial institution sending the call and will include the institution's contact information.
  • Calls will not contain any telemarketing, solicitation, or advertising content.
  • Calls will be concise unless a consumer response is needed.
  • Financial institutions will send no more calls than necessary.
  • Recipients of money transfer notifications may opt out of receiving future notifications.

The FCC seeks comments on whether the requested exemptions allow the financial services industry to reduce privacy and security risks to consumers. The FCC also asks whether it should modify the ABA's proposed requirements or if additional requirements or restrictions are needed. Attorneys in Ballard Spahr's Consumer Financial Services and Privacy and Data Security Groups stand ready to assist financial institutions with submitting comments to the FCC.

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, 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, Mark J. Furletti at 215.864.8138 or furlettim@ballardspahr.com, or Daniel JT McKenna at 215.864.8321 or mckennad@ballardspahr.com.


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