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The first step to understanding compliance is understanding the terminology of compliance.

What is the TILA?

First enacted into law in 1968, the Truth In Lending Act (TILA) governs the way lenders and creditors disclose information about their financial goods and services to consumers. Initially overseen by the Federal Reserve Board (FRB), the TILA has been enforced by the Consumer Financial Protection Bureau (CFPB) since 2011. 

The TILA’s provisions cover most sorts of consumer credit—such as home mortgages, car loans, credit cards, and equity lines of credit—which are the sorts of credit that can lead to debt collection.

What is the FCRA?

The Fair Credit Reporting Act (FCRA) is the primary federal law covering the rules on the collection and reporting of consumer credit information. It was passed into law in 1970. It is enforced by the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB). 

The FCRA sets rules on how credit bureaus can obtain consumer credit information, how long they can store that information, who they can share that information with, and what sort of information they can collect. The FCRA allows credit bureaus to collect the following kinds of information: 

What is the FDCPA?

The Fair Debt Collection Practices Act (FDCPA) was originally passed in 1977 but was significantly amended as a part of the legislative reforms instituted by the Dodd-Frank Act of 2010. Enforced by the Consumer Financial Protection Bureau (CFPB), the FDCPA enumerates restrictions for the behavior of third-party debt collectors who collect on debts owed to another person or entity. Debt collectors who violate the FDCPA can be sued in state or federal court for damages and legal fees within one year of the violation(s).

What is vicarious liability?

Vicarious liability is defined as an attachment of responsibility to a party for harm or damages caused by another party in a lawsuit or civil action.

It is a common practice for many businesses to market their products through the use of independent sales forces and lead aggregator websites. While these can be great sources for obtaining fresh leads, they can also be a trap for Telephone Consumer Protection Act (TCPA) litigation. 

What are co-venture calls?

If a for-profit organization is making calls or texts on behalf of a non-profit or political campaign and the calls or texts are not substantially related, they would be subject to the Telephone Consumer Protection Act (TCPA). Additionally, if there is a commercial message as any part of the communication, even if it also contains a charitable or political purpose, it is considered a “telephone solicitation” under the TCPA.

What is an automated text message?

An automated text message is a text message sent to a consumer or consumers through the use of an automated text messaging platform. Regardless of whether the message itself is manually or automatically generated, it is treated as an automated text message if an autodialer platform is used to deliver the message.

The courts have been unanimous in the viewpoint that a call is a text and a text is a call. Automated text messages should be treated exactly like calls placed using an autodialer and the same consent rules should be observed.

What is click-to-dial?

A click-to-dial system is a less automated version of a predictive dialer system. Like a predictive dialer, it operates from a list of phone numbers. However, rather than automatically placing the calls and directing them to agents like in a predictive dialer system, it sends the phone numbers to a live agent, who clicks something to initiate each individual call.

What is a predictive dialer?

A predictive dialer system operates from a list of phone numbers, automatically dials multiple numbers simultaneously and directs the calls to live agents based on predictions about when the agent will likely be available to handle the call. If the consumer answers, the system directs them to an agent. If the agent is unavailable, it often drops the call.

The Telemarketing Sales Rule (TSR) has a safe harbor provision specifically designed for predictive dialers that allows for a 3% call abandonment rate.

What is an avatar autodialer?

Also known as “soundboard technology,” avatar technology was described by the D.C. District Court of Appeals as a technology that “enables telemarketing agents to communicate with consumers over the phone by playing prerecorded audio clips instead of using the agent’s live voice. The agent can choose a prerecorded clip to ask questions or respond to a consumer while retaining the ability to break into the call and speak to the consumer directly. Soundboard also enables agents to make and participate in multiple calls simultaneously.”