by Elva M. Coffey-Sears, CRCM, CRP
The TCPA was originally passed in 1991 to protect consumers from telemarketing calls. At that time, cellular phones were rare, texting was not an option, and users were billed by the minute for calls – both incoming and outgoing. In general, the TCPA prohibits making telemarketing calls using an artificial or pre-recorded voice to residential telephones without prior express consent and making any non-emergency call using an automatic telephone dialing system or an artificial pre-recorded voice to a wireless telephone number without prior express consent. If the call includes or introduces an advertisement or constitutes telemarketing, consent must be in writing. Since then, the FCC has issued multiple Declaratory Rulings, a number of courts have issued related decisions, and technology has significantly changed.
A 2015 Declaratory Ruling by the FCC clarified that calls (and texts) from financial institutions to cell numbers provided to them by customers were exempt from the prohibitions and restrictions IF the communication was intended to limit potential harm to the customer in cases of fraud, suspicious activity, identity theft, data security breaches, or to complete arrangements for funds transfers AND the communications did not contain telemarketing, sales, debt collection or advertising messages of any kind. Under this exemption, financial institutions are required to limit the length and frequency of such messages and to allow customers an opportunity to opt-out of specific categories or all types of communications. This was good news for our industry!
However, the 2015 Ruling also clarified the FCC’s definition of “auto-dialer” and included liability for calling a number that had been reassigned. The FCC’s definition was so broad that most modern telephones are classified as auto-dialers. With respect to reassigned numbers, callers were provided a one call or text safe harbor. This was not such good news for us!
The ABA recently reported that on March 16, 2018 the D.C. Circuit Court of Appeals issued a decision on the FCC’s Ruling and had considered a friend-of-the-court brief submitted by the ABA in reaching its decision. In its decision:
- The Court agreed that the FCC’s definition of auto-dialer in the Ruling was too broad, but did not specifically define the term. This leaves the door open for the FCC to issue a new definition in the future.
- The Court disagreed with the FCC’s interpretation that the “called party” protected under the TCPA was the “current subscriber to the number” rather than the “intended recipient of the call.” The one-call safe harbor was also challenged by the Court as being seemingly arbitrary. Unfortunately, the Court’s decision removed the safe harbor, but did not impose a specific definition of “called party,” thus leaving it open to future interpretation.
- The Court also affirmed that a consumer may revoke consent through “any reasonable means.”
With significant uncertainty surrounding the TCPA, institutions are advised to implement procedures that support the types of communications (marketing, informational, debt collection, etc.) and equipment used by the institution. These procedures should address, at a minimum, what type of consumer consent is required, how it is obtained, the opt-out process and controls to avoid contacting consumers that have opted out.