The Bankers Are Right
If Nixon can go to China, then I can darn well compliment the American Bankers’ Association when it makes a good point. That is what I am doing today. Besides, if the bankers succeed in getting a petition approved the Federal Communications Commission (FCC), credit unions will benefit as well.
We all know that identity and data theft prevention are all the rage. Suppose that you are approached by a vendor with a great new system that will send out automated voice messages to a member’s cell phone anytime there is an indication that fraudulent activity may be taking place. Given the volume of potential fraud alerts, as well as the speed at which hackers can do their damage, using automated voice messaging and texting is the quickest, most cost effective way of getting the word out. In addition, since the cell phone has become an adult umbilical cord, it makes perfect sense to send the message right to the smart phone, provided that a member has given the number to the financial institution.
However, these services have run up against a compliance speed trap. The Telephone Consumer Protection Act (TCPA) generally prohibits companies from calling cell phones using an automatic dialer telephone system or artificial pre-recorded voice unless the call is “made with the prior consent of the party called.” See 47 USC 227(b)(1).
The problem is that Congress never defined prior expressed consent. As a result, banks and businesses fear that using pre-recorded voices to notify cell phone users of problems with their accounts may result in class action litigation. They have a point. There has already been litigation in this area and even though I think the courts would ultimately rule that a person who has provided financial institutions with a cell phone number has consented to these notifications, nobody should have to go through litigation to find out.
To resolve this issue, the American Bankers’ Association submitted a petition to the FCC, which enforces the TCPA. In the petition they are asking for the authority to send the following messages using either automated phone calls or text messages to a cell phone:
- Fraud and Identity Theft Alerts;
- Data and Security Breach Notices;
- Money Transfer Notifications and notifications of actions needed to arrange for receipt of pending money transfers; and
- Messages informing consumers of “steps they can take to prevent or remedy harm caused by data security breaches.”
Presumably, if the bankers’ petition is successful, credit unions would have the same authority. So in reality, this is a win-win. The proposal makes good sense: we should all be able to reach out and touch someone when doing so protects their assets.