If You Call Your Members, This Case May Impact You

April 11, 2019 at 9:19 am Leave a comment

There is an important case pending before the Court of Appeals for the 11th Circuit which will have a direct operational impact on the type of technology your members can use to reach out to potential members. It also underscores just how unhinged the TCPA has become from Congress’ original intent and why Congress should do something to restore commonsense.

First, a primer/refresher on the issue I am talking about. The Telephone Communications Protection Act (TCPA) was passed in 1991. Its Senate sponsor, Senator Ernest Hollings of South Carolina who passed away recently, described the emerging use of automated telemarketing campaigns as “the scourge of modern civilization. They wake you up in the morning, they interrupt our dinner at night, they force the sick and elderly out of bed; they hound us until we want to rip the telephone out of the wall.” While the Senator may have slightly overstated the case, the reality is many consumers continue to feel harassed by these non-stop calls and their frustration has made TCPA litigation one of the hottest areas of consumer class-action lawsuits. Credit unions have not been exempt from this trend.

The legislation he sponsored was codified as 47 USC §227. This law makes it unlawful for any person to make any call other than for emergency purposes using “any automatic telephone dialing system or an artificial prerecorded voice unless the person has an established business relationship with the recipient.” Seems simple enough except the statute defines an Automatic Telephone Dialing System (ATDS) as equipment “which has the capacity–(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

Melanie Glasser was upset enough by her marketing phone calls from Hilton that she agreed to be the named plaintiff in what she hopes will become a class-action lawsuit. Glasser v. Hilton Grand Vacations Co., LLC., 341 F. Supp. 3d 1305, 1306 (M.D. Fla. 2018), This case does not deal with whether or not she gave Hilton consent to call her. Instead it centers on the type of equipment the company used when it made the allegedly offending phone calls. The company openly admits to using a new computerized telephone calling system specifically designed to comply with the TCPA in a way that allowed it to automate much of the calling process. Its Intelligent Global Connect dialing system uses software to determine who is going to get called but requires an employee to press a button before each call is completed. The plaintiff argues that this is a distinction without a difference but the case was dismissed by the federal district court. It concluded that because “human intervention is necessary for the numbers to be dialed, the equipment and consequently the calls being made is not covered by the TCPA.” The case is now up on appeal and the briefs read more like patent applications than an examination of appropriate marketing practices.

Although this case is only binding in the 11th Circuit,  If this ruling is upheld it will give businesses including credit unions clear-cut guidance as to what type of equipment does and does not comply with the TCPA.

It is also another great example of why all sides need to come back to the table and fix this out-of-control statute once and for all. Personally, I feel that the goal of the statute is worthwhile. People shouldn’t be inundated with unsolicited offers for things they don’t want. The problem is that, as drafted, the trigger for TCPA compliance is the equipment being used and not how it is being used. As a result, almost all businesses including all but the smallest of credit unions either use or will be using equipment that makes them subject to the TCPA even if they never use that equipment for the type of mass marketing, computer generated automated calls the statute was designed to prevent.

We also need some more commonsense guidance as to what constitutes consent but I’ve run out of space for today’s blog.

Entry filed under: Advocacy, Compliance, Legal Watch. Tags: , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, 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. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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