If someone owes your business money, the expectation of payment would seem reasonable. One would assume it is equally reasonable for a business to contact a debtor via their telephone number in an attempt to collect a debt. That is, unless you are the debtor.
In a recent Telephone Consumer Protection Act case that was pending in the Middle District of Florida, Soulliere v. CFI Resorts Management Inc., the plaintiff, a debtor, alleged that he “revoked” his consent by telling the callers “please don’t call my cell phone.” The jury wasn’t buying it.
Debt collection calls are a necessary evil employed by businesses to ensure payment for services rendered and their very survival. As one may imagine, few consumers appreciate receiving debt collection calls because they are usually coupled with more general and serious financial issues. As a result of this conflict, a variety of laws have been created that are intended to both ensure a business’s legitimate need to collect debts and a consumer’s right to avoid abusive and harassing measures in connection with debt collection efforts.
One such law is the TCPA. The TCPA makes it illegal for a company to call a customer’s cellular telephone using an automatic telephone dialing system without prior express consent. 47
U.S.C. § 227(b)(1)(A)(iii). While consumers typically consent to a business calling their cellular telephone at the outset of the relationship, they may choose to revoke their consent at any time and often try to do so when the calls relate to the collection of a debt. Because of the substantial amount of statutory damages available under the statute, $500 to $1500 per call, consumers (and their counsel) have tremendous incentive to allege that they “revoked” the consent previously given. What constitutes “revocation of consent” has become a hotbed of legal activity as courts struggle to decide whether the revocation of consent, if any, was effective.
Traditionally, consumer protection laws are interpreted in ways that benefit the consumer. The TCPA is no different, and as a result, businesses have been subjected to damage awards in excess of six figures because they failed to stop calling the consumer after being told by the consumer to “stop calling.” Three primary issues have become prevalent. The first being the expanding definition of automatic telephone dialing systems (ATDS). The second being the narrowing definition of “consent” under the TCPA. The third, what is required to constitute valid “revocation” of the consent previously given?
The argument follows that it is not a violation of the TCPA for a business to call its customers’ cellular telephone, even repeatedly, without prior express consent so long as those calls are made manually and with a live agent, as opposed to with an ATDS and/or prerecorded messages. Said another way, when consenting to receive telephone calls pursuant to the TCPA, the consumer is very specifically consenting to the receipt of telephone calls to their cellular telephone using an ATDS and/or prerecorded messages. Consequently, what is considered an ATDS, what is considered “consent,” and what is considered effective revocation of consent previously given is central to determining liability under the TCPA.
On June 18, 2015, the FCC held its Open Meeting where, among other things, the commission voted 3-2 to the issuance of an order intended to “clarify” the TCPA. What the order will actually do, however, is create law that did not otherwise exist and open the floodgates to increased TCPA litigation. Because the order continues the gradual trend of expanding the reach of the TCPA, it will require an increasing number of businesses to make sure they have consent under the TCPA before calling their customers’ cellular telephones to collect a debt.
The TCPA will now be interpreted so that most businesses’ phone systems fall under the gambit of ATDS. Originally, an ATDS pursuant to the TCPA was limited to technology that randomly or sequentially generated and dialed telephone numbers. Now, however, an ATDS includes technology able to call from a pre-loaded list or even just capable of autodialing. The FCC appears to take the position that almost any device that is capable of dialing numbers at random (even with some modifications) will be considered an ATDS and potentially subject any person or entity utilizing such a device to liability.
What is considered consent under the TCPA is restricting. Consistent with case law around the country, the Commission confirmed that consent is a moving target that subjects businesses to increased risk of litigation. That is, consent must be given by the actual called party or actual user of the telephone number, and not just the subscriber to the telephone number. As a result, it does not matter if the “intended recipient” of the call consented under the TCPA if the person actually called did not consent. The only exception to this rule applies to reassigned telephone numbers. Specifically, the Commission explained that a business will get 1 “free pass” to call a reassigned telephone number and be subjected to TCPA liability to the new user of the telephone number after that 1 “free” call.
The Commission also discussed revocation of consent, concluding that any revocation conveyed in a “reasonable” way may be effective to preclude a business from making further calls to that consumer. The Commission, however, did not provide detailed examples of what amounts to a “reasonable” conveyance of revocation under the TCPA.
Case law provides a hint of the current uncertainty regarding what may be required to effectively revoke consent under the TCPA. In the Soulliere case, for example, Mr. Soulliere sought over
$200,000 in damages for receipt of debt collection calls to his cellular telephone using an automatic telephone dialing system over the course of three years. Throughout the trial, Mr. Soulliere urged that he told the Defendant CFI Resorts Management, Inc. (“CFIRM”) representatives to “stop calling his cellular telephone.”
The jury returned a defense verdict finding that Mr. Soulliere not only consented to receive the telephone calls, but that he never effectively revoked the consent given. In essence, the jury did not believe that Mr. Soulliere conveyed his revocation in a “reasonable” way. It did not believe that simply telling the representative to “stop calling his cellular telephone,” conveyed revocation of consent because calling a cellular telephone line, in and of itself, is not violate of the TCPA. Rather, what is violative of the TCPA is calling someone’s cellular telephone line using an ATDS without consent, and because Mr. Soulliere did not revoke that specific consent, the CFIRM did not know or have reason to know that consent was revoked.
Despite the Soulliere case, what is considered a “reasonable” conveyance of revocation under the TCPA appears to be restricting. As the Commission dissent warned, the “reasonable” standard for effective revocation under the TCPA may allow consumers to “revoke” consent orally to a teller or cashier at a bank or store they frequently visit, subjecting the business to liability if the store’s billing department calls the consumer based on consent previously given. Essentially, the dissent recognized that because what is considered “reasonable” is subjective, it becomes next to impossible for a business to know when it can no longer call its customers under the TCPA.
With the FCC’s clear trend toward expanding the scope of the TCPA, businesses must ensure compliance at every level, including ensuring that their personnel are kept up to date on the most current standards applied to the TCPA so effective revocation can be properly recognized and acted upon.
About the Authors:
Jeffrey A. Backman, Esq.
Jeffrey Backman is a shareholder in Greenspoon Marder Law’s Complex Business Litigation group in Ft. Lauderdale and focuses his practice on class action defense and commercial litigation. He defends clients in federal courts throughout the country, is at the forefront of legal issues affecting the telemarketing industry, advises clients in legal compliance matters and defends clients before all regulatory state and federal bodies.
Scott M. Wellikoff, Esq.
Scott M. Wellikoff is an associate in Greenspoon Marder Law’s Complex Business Litigation group in Ft. Lauderdale and assists clients with legal compliance and litigation involving highly regulated industries such as debt settlement, debt collections, telemarketing and timeshares. He also litigates state and federal claims involving breach of contract, fraud, copyright infringement and other business related torts.