Reach Out and Touch Someone At Your Own Risk

March 14, 2017 at 9:24 am Leave a comment

The long reach of the Telephone Consumer Protection Act of 1991 was highlighted last week by two Congressional hearings and a joint letter issued by our trade Associations and the bankers strongly opposing a petition to make this onerous law even more difficult to comply with. Believe it or not, this may be the single biggest compliance issue your credit union should be monitoring.  If you don’t think your credit union is impacted by the TCPA, you’re likely wrong.

The TCPA and its regulations prohibit any call to a land line or cell phone that uses an automatic dialing system, artificial or pre-recorded voice that is made without the prior express consent of the called party. According to the FCC, which administers the law, this prohibition now applies to texts.  The key to understanding the TCPA’s reach is to understand that it applies to calls made by your employees with    equipment with the capacity “to store or produce telephone numbers to be called using a random sequential number generator” and the ability to dial such numbers.  Arguably, the only phone that doesn’t meet this definition is that roto dialer wasting away in the back of your garage.  The fact that you don’t autodial your members or bombard them with prerecorded messages is irrelevant.

Traditionally, businesses such as banks and creditors could demonstrate that a member implied consent to receive calls by, for example, including their phone number on a credit application. (See In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 F.C.C. Rcd. 559, 559 (2008)).  Remember that the implied consent standard does not apply to advertisements or telemarketing.

Why has this statute become such a big issue?  Combine this level of nuanced compliance requirements with restrictions on text messages sent to an ever growing number of smart phones and you have a classic legal speed trap.  There were a mere 14 TCPA lawsuits in 2008.  This increased to more than 1,900 in 2014 followed by a 32% increase of such lawsuits to a total of 4,860, including 30 with settlements of over a million dollars.  No wonder then, as pointed out in the joint letter, the expansive definition of auto dialer has even led credit unions and other financial institutions to stop texting messages to members who previously received them.  

While some of this may ultimately be an overreaction, the issue gets even more complicated now that a petition has been filed with the FCC, which would have the effect of making it more difficult to prove that a member has consented to receive TCPA communications.  Specifically, petitioners are requesting that the FCC issue a rule requiring that all calls subject to the TCPA only be authorized with express consent from the receiving party.  The fact that a member has previously put his number on that credit application would no longer constitute consent.     

This proposal would be great for trial lawyers, but lousy for consumers for whom the cell phone has become an electronic appendage, and financial institutions which, as pointed out in the joint comment letter, often have to make live contact with members to comply with federal law.  By the way, the implied consent standards just apply to informational, as opposed to marketing, phone calls.

The good news is that the FCC is poised to take a decisive shift away from many of its more onerous interpretations, now that the Trump Administration can appoint the head of the commission.  Still, this is yet another example of how regulations have over taken the statutes that they are intended to implement.  It is time for Congress to revisit the TCPA.  The problem is that a statute was written when there was an estimated 8 million Americans using cell phones.  Today the number of cell phones exceeds the US population, with many adults having more than one cell phone.

 

Entry filed under: Advocacy, Compliance, General, Regulatory. Tags: .

One More Way CUs Could Help Local Communities Get Ready for Paid Family Leave

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 437 other followers

Archives