Posts tagged ‘auto dialer’

Why This TCPA Case Matters To Your Credit Union

The Supreme Court yesterday heard a case challenging the constitutionality of the Telephone Consumer Protection Act (TCPA). If press reports are accurate, the justices seem as confused about the TCPA as every business and credit union that has struggled with its restrictions. It’s possible, just possible, that this case will result in giving you more flexibility to reach out to your members.

The TCPA generally prohibits businesses from calling, emailing or texting consumers using auto-dialers without first getting their permission. The statute contains an exception however for calls involving the collection of federal loans. For example, the statute doesn’t bar lenders from pestering former students with robocalls about repaying their delinquent college loans. In addition, as I have explained in many a blog, the statute not only applies to robocalls but to any call made using a system capable of making robocalls.

In Barr v. American Association of Political Consultants Inc. the Association argues that these exceptions demonstrate that the statute violates the First Amendment since its restrictions are based on the content of the robocaller’s message. A lower court agreed but refused to strike down the entire statute. Instead, that court eliminated the exception in the statute that allows Federal debt collectors to make unsolicited phone calls. In the case before the Supreme Court, the consultants are asking the court to confirm that the statute violates the First Amendment. According to the Court watchers, most justices seem inclined to agree that the statute violates the First Amendment.

The exciting part for our purposes (yes I get excited easily) is that the Court may find that its only remedy is to strike down the statute in its entirety. This is no minor issue. The TCPA has become the single most litigated consumer protection law in the country. Its broad interpretation has exposed many a credit union to a potential class action lawsuits and made it more difficult than it should be for the industry to reach out to its members.

 

May 7, 2020 at 9:55 am 1 comment

Why Robocall Crackdown Is Hurting Your Credit Union

Contrary to popular belief the biggest obsession in DC right now isn’t the impeachment trial; it’s auto dialing. While it’s hearting to see that the Democrats and Republicans can agree to something, the result of this bi-partisan obsession is that it’s trickier for your credit union to legally communicate with its members than it should be.

First we have yet another decision– Glasser v. Hilton Grand Vacations Co., LLC, No. 18-14499 (11th Cir. 2020)- interpreting what an auto dialer is for purposes of the Telephone Communications Protections Act. Remember, whether or not your credit union is subject to the TCPA is totally dependent on whether or not it is using an auto-dialer when it reaches out and touches someone. Law 360 is reporting that the 11th Circuit refused to allow an individual to go forward with this class action lawsuit claiming a violation of the TCPA.

The case got my attention because the court agreed with an earlier decision by the Court of Appeals for the D.C. Circuit which I have blogged about – ACA International v. Federal Communications Commission- which rejected an expansive interpretation of auto-dialer championed by our friends on the West Coast. The split between the circuits increases the likelihood that the Supreme Court will have to decide how to interpret the TCPA.

Of course, the more logical step would be for Congress to amend the TCPA to make sure that it outlaws abusive telemarketing as opposed to acting as a tripwire for class action lawsuits. But the odds of anyone in Congress voting for a bill which could be attacked as weakening the TCPA are about as good as Donald Trump being removed from office by the Senate.

All this is happening against the backdrop of heightened regulatory vigilance of auto dialers. For example, the DOJ is seeking to shut down two auto dialer companies that facilitated auto dialer operations based in New York and Arizona, which the government claimed specialized in ripping-off the elderly. In addition, regulators are continuing to review whether even more TCPA regulations should be amended. As a matter of fact, it was this comment letter from CUNA last night that got me thinking about this subject for today’s blog.

There is a reason I am providing you with this parade of horribles. No one likes robocalls, or has sympathy for companies that facilitate shams intended to pressure people into giving up their money. But there are legitimate businesses, such as credit unions, which use this technology every day to communicate with their members about legitimate topics. The current frenzy has regulators using a hatchet to deal with legitimate issues when they should be using a scalpel. I don’t see this ending any time soon. So for those of you who haven’t done so already, take a good look at the type of technology you are using and start thinking of ways that you can avoid getting caught in the regulatory dragnet.

 

January 30, 2020 at 9:43 am Leave a comment


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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