Someone Needs to Tell TCPA That it’s 2017
When Laws exist before the technology they govern
The Telephone Consumer Protection Act of 1991 was a groundbreaking and game-changing piece of legislation. But it has not been without its shortcomings, legal challenges, and the unclear or confusing scope of its reach.
The TCPA remains an important piece of legislation, though it is one that has failed to keep up with both the growing pace of technology as well as more modern sales and marketing practices.
Litigation On the Rise
The TCPA was intended to protect consumers from unwanted calls from telemarketers. For any consumer who ever received a call at dinnertime, this was a blessing. But, the act has been extended to several industries for which it was not originally intended. The results have been less than ideal for businesses engaging in seemingly routine business practices.
These industries, who are not engaging in what would be called “telemarketing” include healthcare, financial services, education, hospitality, and utilities. Every industry has been affected by the act (and supporting pieces of legislation such as The Do-Not-Call Implementation Act of 2003 which gave rise to the “Do Not Call List”) and litigation is on the rise.
Since 2010, there has been a near 1,000% increase in TCPA-related lawsuits, with class action lawsuits fetching payouts ranging into the 10’s of millions of dollars. Wells Fargo was found in violation and settled for $15.7 million. Caribbean Cruise Lines is in the middle of a $76.0 million settlement as well.
That’s not to say that some companies don’t legitimately violate the act. They do. However, the law is being applied to industries and practices beyond its intended purpose. Part of the reason for this is the outdated language it uses, which is vague and open to broad interpretation.
What started as a well-intentioned piece of legislation that provides consumer protection against unscrupulous and bothersome businesses has turned into a cash cow for law firms. In fact, in 2014 the average cost of attorney’s fees in a TCPA class action suit were $2.4 million. The individual consumer represented by the suit could expect to receive, on average, $4.12. That’s not a typo. While the attorney’s are making millions, the consumer bringing the complaint to court isn’t making enough to purchase a grande latte on their way home from the courthouse.
This leaves a plethora of money to be made for litigators and not much leftover for the consumers they’re supposed to be representing.
Broad Interpretations
One of the issues with the TCPA is the broad interpretation of the law. Written before the cellphone explosion of the early 2000’s the law does not make a clear distinction between landlines and mobile phones.
Specifically, the law was intended to prevent automatic dialing systems (or robo-dialers as they are often called). The problem is that the language of TCPA defines an “automatic dialing system” as being:
…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.
While this language may have been appropriate in 1991, a lot has changed in the last twenty-six years. The FCC has further interpreted “automatic dialing systems” to include: “equipment that has the potential to be modified in the future to have the statutory elements (of the law).”
In other words, a system that dials phone numbers doesn’t have to be designed for, or even used as an automatic dialing system. The possibility that it might be used for that purpose in the future would cast doubt on its legality under TCPA.
Every business that communicates with customers on a mass scale utilizes some form of digital contact directory. Often, that system is also capable of making calls. If the system itself might be interpreted as being an “automatic dialing system” because it might be upgraded; are all these systems an “automatic dialing system?”
This leaves businesses and consumers in vague territory as modern technology of all kinds, from online phone and answering services to an ordinary iPhone can be lumped into that group. Cellphones present a difficult situation due in large part to the rise in text messaging.
Who Defines Texting?
When TCPA was first enacted in 1991, it would be another year before the first text message was sent. Part of the law focuses on whether or not the customer has consented to be contacted by the business. However, the law has not been updated to define that consent as it relates to text messaging. This is both irresponsible and dangerous from a legal perspective.
Text messaging is one of the most effective methods of communication, particularly with the millennial generation which recently overtook Baby Boomers as America’s largest living generation. The generation is now also the largest labor force in America (by generation).
This means that a law intended to protect consumers has not been updated to define, clarify, and address the methods of communication used (and preferred) by the largest generational population in the country.
When Intent Makes No Difference
Finally, while the intent of TCPA was to provide protection to consumers, “intent” has no place in the language of the law. The Act focuses on the systems being used to make the calls and ignores the reason for the call in the first place.
In the Wells Fargo example above, the phone calls in question were being made to secure payments on auto loans that had not been satisfied. The financial company argued they had received consent for contact from one of the principals involved in the lawsuit. Producing signed agreements did not qualify as a defense for Wells Fargo, even though prior consent to contact is an applicable defense to a claim under TCPA.
A similar lawsuit settled by JPMorgan Chase Bank for $34 million centered on calls and automatic alerts that were intended for existing Chase Bank customers and cardholders.
The focus of that suit was again not on the intention of the communication, the method being used to communicate. It makes no difference that many of the persons in the case were existing Chase Bank customers and cardholders receiving legitimate communications about their accounts. The focus rested on the technology used to perform that communication.
The Need for Change
As technology grows and becomes more ingrained in everyday life, the legal statutes that provide clarity (and protection for consumers) need to keep pace. As well-intentioned TCPA may have been, it is an outdated law in desperate need of an update for 2017.
The broad interpretations of the law have led to a revolving door of lucrative, though often frivolous litigation that has served more to line the pockets of private law firms than protect the consumers it was designed to serve.
Telemarketing may have been stifled by the act, but several legitimate businesses seeking to engage in non-hostile and commonplace businesses practices have been snared in the broad web of TCPA litigation. TCPA still matters, but it needs modernization to fulfill its intended purpose in 2017.
Stay Tuned for Next Steps
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