Proactive Changes to the TCPA

Report
Proactive Changes to the TCPA – It’s All about
Communication
Balaji “Raj” Rajan, Ceannate Corp
James Schultz, The Sessions Firm
Timothy Fitzgibbon, NCHER
The Telephone Consumer Protection Act
How Did We Get Here And Where Are We Headed?
James Schultz
TCPA Prohibitions
• Passed in 1991, the TCPA generally has 4 distinct
requirements:
– Prohibits sending unsolicited fax advertisements
– Prohibits making telemarketing calls to landlines with a prerecorded or artificial voice
– Prohibits making calls to cellular or wireless phones without prior
express consent and with either an automatic telephone dialing
system or pre-recorded or artificial voice
– Creation of a “Do No Call” List
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
3
Frequently Disputed Issues
•
•
•
•
What is an ATDS?
Are the calls I am making subject to the TCPA?
Was there consent for the call?
So what? What are the available damages under the TCPA?
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
4
Technical Definition of an ATDS
• The TCPA specifically defines an ATDS as:
– “equipment which has the capacity to store or produce telephone
numbers to be called, using a random or sequential number
generator, and to dial such numbers.
47 U.S.C. 227(a)(1)
• What does that mean?
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
5
Dialer capacity and affect of FCC’s rule making
• FCC has broad discretion to enact implementing regulations and uses
this authority to fundamentally alter statutes.
• Initially, the FCC had concluded that calls to collect debts were not
made with an ATDS. In 2003, the FCC flip-flopped, and concluded
predictive dialers were covered. The new focus became on “human
intervention” rather than capacity to store or produce numbers.
• Effect has been to significantly broaden the types of calls that are now
subject to the TCPA – calls with theoretical “capacity” or calls made
without direct human intervention might be covered.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
6
Do various calling services fit within TCPA’s
coverage?
•
•
•
Text messages
VoIP
Call forwarded to cell phones
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
7
Preview dialing – how much human interaction is needed
• The FCC has been very broad in defining equipment as an "automatic
telephone dialing system" (ATDS) and has basically stated that if the dialer
has the capacity to make calls without human intervention, it is an
ATDS. More significant, the FCC stated "the purpose of the requirement that
equipment have the capacity to store or produce telephone numbers to be
called is to ensure that the prohibition on autodialed calls not be
circumvented." In the Matter of Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991, 18 F.C.C.R. 14014, Para. 132
(2003).
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
8
Preview dialing – how much human interaction is needed
• How will the court resolve the use of a preview dialing mode? There are 2
options - the focus can either be on:
(1) the reality of how the equipment was being used (with human intervention),
or
(2) the capacity of the equipment (calls can still be made without human
intervention, though not as operated). Clearly, if the focus is on how the
equipment is being used, the Dynamic Preview application would exempt the
calls from the TCPA as they are being made with human intervention. But
because the calls are made through a dialer, there is still the capacity to
make calls without human intervention so that the calls could be covered by
the TCPA. Though not directly on point, the reported cases generally focus
only on capacity.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
9
What is Prior Express Consent
• If the number is provided by the customer to the creditor, there
is prior express consent
• Consent must be in writing if making telemarketing calls
• If you are sued, you need to prove there was consent
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
10
Is The Consent Good Enough?
• Spouse provides the number
• Ported numbers
• Inherited numbers
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
11
Can Consent Be Withdrawn?
Yes, No or Maybe So
• 3 approaches
– Consent can be withdrawn by the consumer at any time and in any
fashion
– Consent can be withdrawn in writing only
– Consent cannot be withdrawn
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
12
Examples of the explosion of TCPA claims and
settlements
•
•
•
•
•
•
•
Alliance One
Sallie Mae
Jiffy Lube
Bank Of America
Wells Fargo
Fifth Third Bank
Discover
•
•
•
•
•
•
JP Morgan Chase
Steve Madden
ADT
Papa John’s
Domino’s
Google
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
13
How Can You Protect Yourself?
•
•
•
•
•
•
Scrub
Call manually
Do Not Leave Messages
Obtain consent through agreement with consumer
Obtain and document verbal consent
Vendor solutions
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
14
A Study on the Borrower Impact of the TCPA
Balaji “Raj” Rajan
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
16
Study Findings
• Student borrowers under the age of 49 years hold over 83 percent of all
student loans.
• The most recent report from the Centers for Disease Control study (National
Health Interview – National Center for Health Statistics released June 2013)
documents that 54.1 percent of all American households now are exclusively
or predominantly wireless.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
17
Study Findings
• Approximately 27 percent of student loan borrowers in repayment are
delinquent on their loans – the vast majority of which never speak to their
student loan servicer. If contacting them were easier, most students could
receive help entering Income Based Repayment (IBR) or Pay As You Earn
(PAYE) plans. However, it is impossible to timely contact all borrowers
needing these important services without the appropriate use of technology.
• Unnecessary defaults impose significant costs to taxpayers. Estimates
suggest that defaulted loans cost as much as 25 cents for every dollar
borrowed.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
18
Study Findings
• In FY 14, an estimated 1.3 million borrowers will default on their student
loans, in large part because their servicers are unable to use modern
technology to contact them and provide counsel on the many available
options to avoid default. Nearly 12 million borrowers could avoid the pitfalls
of default over the next ten years if their servicers could use autodialing
technology to reach them on their wireless devices.
• As the number of wireless households increases, and the corresponding
ability to efficiently contact borrowers on their cell phones declines, recoveries
of defaulted loans could drop by nearly $26.5 billion over the next ten
years.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
19
Study Findings
• Modifying the TCPA will allow the Federal government and its agents to
use automatic dialing systems when contacting wireless phones in the
servicing and collection of debt owed to or guaranteed by the United States
and will increase collections by $41.3 billion and the number of borrowers
serviced by 7.9 million. All existing consumer protections will remain in
place to safeguard consumers’ rights and privacy. The U.S. Departments of
Education and Treasury support this position.
• There are 5.9 million student loan borrowers currently in default status. Given
that total student loan indebtedness has grown by 70 percent since 2008,
this number is expected to increase without action and, conversely, could
decrease significantly if the appropriate modifications are made to the TCPA.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
20
Questions?
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
21

similar documents