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What credit unions must do to stay in compliance with TCPA
A case bound for the U.S. Supreme Court to resolve the issue of how an automated telephone dialing system is to be interpreted under the Telephone Consumer Protection Act was settled out of court on Feb. 15.
In September, the Ninth Circuit Court of Appeals had ruled in Marks v. Crunch San Diego, LLC that the TCPA’s definition of an ATDS was “ambiguous on its face” regarding whether the phrase “using a random or sequential number generator” modifies both “store” and “produce.” The court interpreted the TCPA to mean an ATDS is “not limited to devices with the capacity to call numbers produced by a ‘random or sequential number generator’ but also includes devices with the capacity to stored numbers and to dial store numbers automatically.”
This decision differed from the D.C. Circuit Court of Appeals in ACA International v. FCC, the Third Circuit Court of Appeals in Dominguez v. Yahoo, and the Second Circuit Court of Appeals in King v. Time Warner Cable, which ruled the term “capacity” in a more limited manner to mean a device’s present functions to dial randomly or sequential phone numbers.
The Ninth Circuit had stayed the enforcement of its decision pending petition for a writ of certiorari with the U.S. Supreme Court. With the out-of-court settlement, the Ninth Circuit’s decision stands in the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington, making it more difficult for legitimate businesses to contact consumers telephonically or by text messaging in these states or to consumers who reside in these states.
The Federal Communications Commission is expected to issue another order addressing the ATDS definition in response to requests for comment as a result of the differing Court of Appeals decisions.
TCPA lawsuits are sure to continue, regardless of the language of the FCC order. To avoid liability, credit unions and other businesses must obtain prior express written consent before making any telephone calls or text messages. This consent must (1) identify the entity making the calls/texts; (2) provide for a specific phone number to be contacted; (3) provide clear and affirmative consent (i.e., “I agree”); (4) includes language that the calls/texts may be conducted to offer products and services; (5) includes language that the calls/text may be made using automated technology; (6) provides the consumer is not required to consent as a condition of obtaining a product or service: and (7) includes the consumer’s signature. This consent must be separate from all other disclosures and advertisements, and the signature must be in addition to any other signature line on the document.
While taking these steps may not stop a TCPA lawsuit from getting filed, it could prevent your case from going to the Supreme Court.
Veronica Madsen is CEO of ESTEE Compliance, LLC in the Detroit area. Please note: The information and opinions provided on this blog are not intended to be legal advice. No attorney-client relationship is formed, nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney that is licensed in your jurisdiction.
