Faced with possible fines in excess of $121 million, JPMorgan Chase agreed to a $2.25 million TCPA class action settlement. The financial services firm was accused of violating the TCPA by autodialing over 200,000 cell phones after their customers had already verbally revoked consent.
The Alleged TCPA Violation
The plaintiff alleged that JPMorgan Chase used an ATDS (automatic telephone dialing system) to make robocalls to collect on mortgages and home equity lines of credit after individuals had verbally revoked consent for the bank to call them. The plaintiff told a JPMorgan telemarketer that she only wanted to be contacted in writing, after which she claims that their ATDS dialed her at least five more times. The TCPA regulations allow for statutory damages of $500 per violation and $1,500 for any "knowing and/or willful" violation of the federal law. The represented class is estimated to be over 242,000 people.
TCPA Class Action Settlement
Under the terms of the settlement the plaintiffs each receive $5,000. The lawyers representing the plaintiff are requesting attorneys’ fees that are up to 30% of the settlement fund which would net them $675,000. The attorneys are also seeking $40,000 in costs. Based on the size of the settlement and an estimated 5% claim rate of the total members of the class, each class member would receive $101.
Why settle?
JPMorgan Chase believes they were in the right, but chose to settle based upon a financial risk assessment of fighting the battle before a judge and the possibility of losing a great deal more money. This may have been a prudent business decision, but what is the point of such TCPA lawsuits and the regulations that are supposedly being enforced? Do similar lawsuits and the resulting settlements make the lives of consumers better or do they simply enrich a few plaintiffs and their attorneys?
So how can you protect your business against costly TCPA lawsuits? What could JPMorgan Chase have done differently?
1. Marketers need to understand the channels on which they are sending telemarketing messages and the laws governing those channels. JP Morgan Chase should have run their entire campaign by a TCPA specialist who could have told them that they needed specific opt-in and opt-out language.
2. Companies must get express written consent, to make telemarketing calls or send promotional text messages. JP Morgan Chase should have obtained prior express written consent before beginning their campaign.
3. Find litigators who may be hiding in your data. Identify known serial TCPA litigators and plaintiffs in your contact lists and weed them out before any inbound or outbound campaign to reduce the risk of being targeted for a TCPA class action lawsuit. If JPMorgan Chase had scrubbed their contact lists for known TCPA litigators, this class-action suit may never have happened at all.
Bottom Line
The gap between the use of technology and the law, as well as the confusing language of the TCPA has created a new “lawsuit mill” where serial plaintiffs and litigators are bringing class action and individual lawsuits against marketers of all industries. They may already be hiding in your data. The first (and easiest) line of defense is to identify and remove known TCPA litigators from your contact lists and create each campaign using TCPA compliance best practices.
