Follett Higher Education Group (FHEG), a business that provides educational products, services and technology, has agreed to settle a class action lawsuit for $3.5 million. FHEG allegedly violated the Telephone Consumer Protection Act (TCPA) by sending nonemergency text messages to approximately 1.8 million consumers using an automatic telephone dialing system. It is estimated that class members will receive between $10 and $105. It is important to remember that under the TCPA, text messages are treated like phone calls. Marketers should never send out text messages without first getting the proper consent. While an unsolicited text message might seem less intrusive or serious than an unsolicited phone call, plaintiffs will still go after companies that break these rules.
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The American Collections Association, along with 7 other companies and trade associations, all filed suit against the FCC in 2015 following the FCC's July 2015 Order "clarifying" the definition of an autodialer, who the "called party" is, and how to revoke consent.
All 7 suits were consolidated in the D.C. Federal Circuit Court of Appeals. The arguments were fully briefed in writing earlier this year and the panel of federal judges held an oral argument (hearing) on October 19, 2016. During the hearing, which lasted several hours, the FCC asked tough questions of both sides, but especially seemed to grill the FCC about the problematic way in which they had interpreted the TCPA. For example, the judges pressed the FCC's attorney about how companies could fully comply with the reassigned number rule when there still existed no comprehensive list of such numbers.
The FCC admitted they were aware of no perfect solution, but they believed the industry would be forced to come up with one, like it did for ported wireless numbers. The FCC stated they were aware of at least 5 companies who offered reassigned number scrubbing, some of whom claimed to be 95-99% accurate. The contact center industry anxiously awaits the Court's ruling on these important issues.
Dun & Bradstreet Creditability Corp., a business credit report firm, has agreed to a $10.5 million settlement in a class action case in which plaintiffs allege violations of the Telephone Consumer Protection Act (TCPA).
The class consisted of approximately 1.1 million individuals. It is estimated that each settlement award will be between $60 and $120. Plaintiffs claimed that between April 28, 2011 and January 31, 2016, Dun & Bradstreet used autodialing software to call cell phones without prior express consent. Jeffrey Thomas, who initially filed the suit in Oregon, claimed that Dun and Bradstreet continued to call him even after having asked to be added to their do-not-call list.
While Dun & Bradstreet disputed these claims throughout the lawsuit, they agreed to the settlement to “avoid the expense, risk and inconvenience of further litigation”, as stated in the settlement. In addition to the monetary compensation of the settlement, Dun & Bradstreet have agreed to implement changes to their telemarketing practices that will ensure increased compliance with the TCPA.
This case is a good reminder for companies that engage in telemarketing to ensure that their practices are 100 percent compliant with the TCPA. Scrubbing state and federal Do-Not-Call lists, providing proper opt-outs, and avoiding non-compliant dialing software are some of the most important practices for telemarketers to put in place before they make any calls.
In the case of Aranda v. Caribbean Cruise Line, Inc., the group of cruise and vacation companies agreed to a $76 Million Settlement on April 18 in the TCPA class action. The class action centered on the accusation of illegal telemarketing calls made from August 2011 to August 2012.
Plaintiffs alleged that Caribbean Cruise, Vacation Ownership Marketing Tours, and the Berkley Group, a time share company, participated together in a robocalling campaign in which marketing calls were disguised as political satisfaction surveys.
Recipients of the calls were told that they could win a free cruise by completing the survey, although call representatives still had to collect credit card numbers as recipients would be responsible for port fees, taxes, and any upgrades or special amenities during the trip.
Calls were made to over 1 million cell and landline phones.
Members of the class who submit a valid claim could each receive as much as $500. If the $76 million cap is reached, then members will receive a pro rata share of the fund.
Members of the class eligible for the settlement include any person who received:
(1) one or more telephone calls made by, on behalf of, or for the benefit of the Defendants,
(2) purportedly offering a free cruise in exchange for taking an automated public opinion and/or political survey,
(3) which delivered a message using a prerecorded or artificial voice,
(4) between August 2011 and August 2012,
(5) and your (i) telephone number appears in Defendants’ records of those calls and/or the records of their third party telephone carriers or the third party telephone carriers of their call centers or (ii) your own records prove that you received the calls—such as your telephone records, bills, and/or recordings of the calls.
Potential members of the class are instructed to follow this link to learn if their number appears on the defendant’s phone records.
Companies that choose to use telemarketing should not only ensure that their own practices are compliant with the TCPA, but also that any affiliate or third party marketers they choose to do business with are also compliant.
Plaintiffs’ Attorneys Seeking $24.5 Million in Fees
Since this is one of the largest TCPA settlements ever, attorneys for the plaintiff are seeking as much as $24.5 million in fees.
Read the follow-up article about the Millions in Attorneys’ Fees granted in this case.
A court in Washington DC has ruled that the structure of The Consumer Financial Protection Bureau (CFPB) is unconstitutional. Unlike other federal agencies, the CFPB is headed by a single chair who cannot be removed at the President’s discretion. Federal regulatory agencies are usually headed by three to five commissioners that work together to run the agency or by a single commissioner that can be removed by the president.
Two of the three judges on the appeals panel agreed that too much unchecked authority had been given to the CFPB Director relative to other agencies. The judgement states: “The director enjoys significantly more unilateral power than any single member of any other independent agency. By ‘unilateral power,’ we mean power that is not checked by the President or by other colleagues.”
The court ruled that the director’s job could now be supervised or changed by the president at any time. The mission of the CFPB is to “make consumer financial markets work for consumers, responsible providers, and the economy as a whole. We protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law. We arm people with the information, steps, and tools that they need to make smart financial decisions.” The CFPB has recently been thought of as a regulatory agency that will play a large role in the future of the telemarketing industry. It is always nice to see a large agency like this be checked by the courts.
Calls with a prerecorded message or made using an automated telephone dialing system to a Voice-over-Internet number with limited minutes should be treated the same as calls to a cellphone under the Telephone Consumer Protection Act, a New York federal court has ruled.
Reny Rivero sued America's Recovery Solutions alleging violations of the TCPA based on three calls to his phone number, which had a greeting that directed callers not to leave a message unless in an emergency. Representatives from ARS nonetheless left a voicemail message on each occasion, stating their name and requesting that Rivero return the call to the representative.
Proceeding pro se, Rivero sought damages under the TCPA as well as the Fair Debt Collection Practices Act and state law. Although ARS initially appeared in the action and answered the original complaint, its counsel withdrew after the complaint was amended and then failed to respond to the amended complaint. Plaintiff subsequently moved for a default judgment.
U.S. District Court Judge Eric N. Vitaliano granted the motion and referred the matter to Magistrate Judge Lois Bloom to consider the issue of damages.
The court began by noting that the Federal Communications Commission created a limited exemption for calls between debt collectors and consumers with an established business relationship that extends only to calls made to a "residential line," and not a cellphone or other service.
Rivero's VoIP service from Vonage offers him 300 minutes per month, routing calls through his Internet connection to his phone line. Although little guidance exists in the Second Circuit Court of Appeals on the issue of whether a VoIP intermediary connection alters the nature of the receiving telephone under the TCPA, Magistrate Judge Bloom turned to an opinion from the Fourth Circuit involving a plaintiff that subscribed to a VoIP service that charged her a set amount per call.
In that case, Lynn v. Monarch Recovery Management, the federal appellate panel held that because the plaintiff was charged for each of the defendant's calls, the calls were made to "a service for which the party is charged for the call," which is prohibited under the TCPA at Section 227(b)(1)(A)(iii). This conclusion aligned with Congress's intent that automated calls not add expense to annoyance, the Fourth Circuit wrote.
"Plaintiff's VoIP service is not an unlimited calls/flat fee plan as the TCPA presumes is generally the case with a traditional residential telephone line," the court said. "Rather, it is 'a service for which the party is charged for the call' described under Section 227(b)(1)(A)(iii), because each call by Defendant depletes Plaintiff's store of limited minutes. There is no regulatory exemption to this provision because the TCPA permits the FCC to create limited exemptions only to the prohibition of calls to certain cell phones (under subsection (A)) and to residential lines (under subsection (B)). Accordingly, Defendant's calls to Plaintiff's VoIP phone line violated the TCPA."
Turning to damages, Magistrate Judge Bloom denied Rivero's request to treble his statutory damages for the calls and instead recommended he receive just $500 per call. "Had Plaintiff used a traditional residential line, Defendant's calls would have fallen within the established business exemption and would not have violated the TCPA," the court said. "Given the lack of evidence that Defendant knew Plaintiff would be charged for its calls, treble damages are inappropriate."
The court added $750 to Rivero's damages for FDCPA violations (with another $423.50 for costs) but held he could not recover on his New York consumer protection law claim, for a total of $2,673.50.
Reviewing the report and recommendation, Judge Vitaliano found it "to be correct, well-reasoned, and free of any clear error," and adopted it in its entirety with an order to close the case.
To read the report and recommendation in Rivero v. America's Recovery Solutions, click here.
To read the order, click here.
Why it matters: The Rivero case provides companies that place unsolicited calls to consumers with something new to think about before dialing, specifically, what kind of phone service does the consumer have. Although the defendant elected not to mount a defense in the case, the court found the VoIP plan subscribed to by the plaintiff was "a service for which the party is charged for the call" under Section 227(b)(1)(A)(iii) of the TCPA, triggering liability on the part of the defendant. The magistrate judge declined to treble the plaintiff's damages, however, recognizing that the defendant had no way of knowing that Rivero subscribed to a VoIP plan – had he used a traditional residential line, the calls would have fallen within the established business exemption in the statute and would not have violated the TCPA. A different outcome might also have been possible had Rivero's Vonage plan featured unlimited minutes. Each call from the defendant reduced the plaintiff's 300 minutes per month, the court explained, leaving room for a defendant to distinguish a situation where a VoIP subscriber had no limit on his calls and would not have been charged for them.
March 25, 2016 - reported by Christine M Reilly at Manatt, Phelps & Phillips, LLP
Manatt also has a good summary of the other major VoIP Case to date in Lynn v. Monarch Recovery Management: TCPA “Call-Charged” Provision Applies to VoIP Service, 4th Circuit Affirms
Fortunately, Contact Center Compliance has a VoIP TCPA scrub that can be used to identify VoIP numbers for TCPA compliance that can be combined with their wireless and TCPA litigator scrubs for a one-stop shop for TCPA risk mitigation.
The Federal Communications Commission held its first meeting of the Robocall Strike Force, with more than 33 companies and organizations represented for the concerted effort to strike out robocalls.
An industry-led Strike Force group committed “to developing comprehensive solutions to prevent, detect, and filter unwanted robocalls” answered the call of FCC Chairman Tom Wheeler to meet twice a week through October to tackle the issue. Participants include representatives from Apple, Comcast, and a group led by AT&T CEO Randall Stephenson, among others.
Specifically, the group will focus on authentication standards for VoIP calls including gateway verification, tools to allow third parties to develop call filtering solutions, and cross-carrier and multi-carrier efforts to detect and prevent unwanted and fraudulent calls.
Three of the Commissioners spoke at the first meeting, with Chairman Wheeler opening the gathering by reminding participants of the scope of their opponent. “Robocalls are a scourge,” he said. “It’s the number one complaint that we hear from consumers at the Commission. We receive more than 200,000 complaints a year.”
Urging the group to “get creative” and implement cross-carrier joint efforts, the Chairman suggested the possibility of a “Do Not Originate” list. Commissioner Ajit Pai also spoke at the meeting and offered some potential solutions. He wondered if the FCC should encourage Congress to pass the Anti-Spoofing Act of 2015, intended “to crack down on foreign callers that prey on Americans using spoofed Caller ID for their robocalls,” or if the Commission should take more enforcement actions against robocallers.
Commissioner Pai also asked the Strike Force to consider how to make it easier for consumers to tell the FCC about robocalls and for the Enforcement Bureau to track down and stop the operations of fraudulent robocallers. Other potential ideas: the creation of a reassigned numbers database to give callers the ability to avoid dialing wrong numbers by mistake as well as carving out a safe harbor for telephone companies seeking to provide call-blocking services to their customers in an attempt to encourage experimentation.
To read the statements of the Commissioners at the Robocall Strike Force meeting, click here.
Why it matters: By October 19, the Strike Force will report to the FCC on “concrete plans to accelerate the development and adoption of new tools and solutions,” the group’s chair said, including answers to the Commissioners’ questions.
September 20, 2016 - reported by Manatt, Phelps & Phillips, LLP
Representatives from the Federal Trade Commission, Federal Communications Commission, the US Senate, and various industry attorneys and private brands converged in Washington D.C. last week to learn from each other about compliance hurdles and solutions surrounding multi-channel marketing in a highly regulated environment. Topics included the TCPA, TSR and other privacy-related laws and regulations. Among other topics important to CCC and its clients, panels addressed TCPA lawsuits and the pending PACE/ACA appeal in the DC Federal Circuit Court, scheduled to undergo oral arguments in a few short weeks. A representative for the FTC stated, when asked, that she was very concerned with certain new technology, including both avatar ("soundboard") and ringless voicemail messaging, and that we can expect new action regarding avatar technology in the very near future.
On September 22, members of the U.S. House of Representatives (Communications & Technology Subcommittee of the Energy & Commerce Committee) convened a meeting to discuss desperately needed, common sense TCPA reform. The tide of TCPA lawsuits and class actions appeared to be the primary concern. Committee members agreed that common-sense solutions were needed both to protect businesses and consumers. Whether the TCPA will actually be amended any time soon is yet to be seen, but the fact that our national Congress is discussing the issue is encouraging.