$500 for Each Violation of the Telephone Consumer Protection Act

Cell phones have rapidly become part of our everyday life.  So much so, that in Washington we had to pass legislation to restrict the use of cellular phones while driving.  Whether you agree or not that talking or texting on the phone is a distraction just like eating a bowl of chicken while you are driving, we all agree that cell phones have become a major part of our lives.  Recent studies show that 91 percent of Americans have a cellular phone.

What you may not know is the Telephone Consumer Protection Act restricts the use of automated dialer systems to contact members on their cellular phones.  This would include debt collection attempts.  The applicable part of the TCPA is:

“It shall be unlawful…to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic dialing system…to any telephone number assigned to a…cellular telephone service.”

The FCC has provided the opinion that it is evidence of prior express consent if the member provides their cellular phone number as part of a credit application.  Others have argued in court that providing the cellular number on an application is “implied consent” and not the “express consent” that is required in the regulation.  The FCC opinion could be overturned by a federal appellate court.

The FCC has also provided the opinion that the liability for violations of the TCPA would still remain with the credit union even if the calls were placed by a third party collection agency who was attempting to collect the debt on the credit unions behalf.

So, in the end this leaves use with 4 important pieces of information:

  • Making debt collection calls to the member’s cellular phone is ok if you are not using an automatic dialer.
  • You can currently call the cellular number with an automatic dialer if the member provided it on the application for the debt.
  • If a third party collection agency makes an automated call to the cellular phone without “express consent” you can also be held liable.
  • As more American households get rid of land-lines and go to sole use of cellular phones,* this could become an issue that will require careful attention to avoid paying fines ranging from $500 to $1500 per violation.**

*24.5 percent of American households no longer have land-lines.

** The penalties are $500 for each unintentional violation and $1500 for each intentional violation.  Each time the cellular number is called is a violation.

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