This article was republished in insideARM on February 21, 2017.
On January 22, 2017, several parties filed a petition for rulemaking and declaratory rulings regarding the Telephone Consumer Protection Act (TCPA) and Fair Debt Collection Practices Act (FDCPA) before the Federal Communications Commission (FCC). The petitioners are requesting that the FCC issue a rule that, if passed, would eliminate the "prior express consent" standard for non-solicitation calls to cell phones using an autodialer or pre-recorded message.
Currently, the prior express consent standard for non-solicitation calls to cell phones has been interpreted by the FCC to include consent resulting from a party's providing a telephone number to the caller. Consumers can therefore provide prior express consent to receive what are often urgent and highly important calls and text messages, by including their cell phone number on an application or other form, or by providing the number to the caller orally.
There are certain exceptions. For instance, Congress amended the TCPA to exempt autodialed calls "made solely to collect a debt owed to or guaranteed by the United States." For financial institutions, the FCC's current TCPA rule exempts time-sensitive calls and text messages (including messages and notifications of fraud, identity theft, data security breaches and remedies, and money transfers). However, even this exemption includes a consent requirement—calls and text messages must be sent "only to the wireless telephone number provided by the customer of the financial institution." Moreover, the calls or messages must be limited in number (no more than three) and length (one minute/160 characters). The calls or messages are restricted to the exempted purpose, and must include an opt-out option that must be honored immediately.
In place of the current standard, the proposed rule would require "prior express written consent," the same standard that solicitation calls require. The prior express written consent standard presents a much higher compliance hurdle—for example, the FCC's Enforcement Bureau has indicated that, for prior written consent to be effective:
- The agreement must be in writing;
- The agreement must bear the signature of the person who will receive the advertisement/telemarketing calls/texts;
- The language of the agreement must clearly authorize the seller to deliver or cause to be delivered ads or telemarketing messages via autodialed calls or robocalls/robotexts;
- The written agreement must include the telephone number to which the person signing authorizes advertisements or telemarketing messages to be delivered; and
- The written agreement must include a clear and conspicuous disclosure informing the person signing that:
- By executing the agreement, the person signing authorizes the seller to deliver or cause to be delivered ads or telemarketing messages via autodialed calls or robocalls/robotexts; and
- The person signing the agreement is not required to sign the agreement (directly or indirectly) or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.
Creditors, loan servicers, debt collection companies, and other financial institutions that communicate frequently with consumers are highly exposed to TCPA and often FDCPA liability, as well as various state laws that impose restrictions on calling. Banks and other large financial institutions can also be exposed to liability indirectly through their vendors. The new rule may have a crippling effect on businesses relying on the current rule. The FCC has issued a public notice seeking comments by March 10, 2017.