TMCnews Featured Article

If you do any kind of outbound telephone marketing, you may believe you know the rules quite well. Those rules are mostly put in place by the Telephone Consumer Protection Act (TCPA), which governs the practice of outbound telemarketing, both in person or using automated outbound telephone calls.

So, let’s test your knowledge on the TCPA. Can you call a customer’s cell phone using pre-recorded auto-dialed outbound messages? If you say, “I’m not sure,” then no one would blame you. The TCPA is an often revised and even more often litigated ruling, and there are many gray areas that even the FCC (News - Alert) – the agency that enforces it – do not seem to understand. Depending on your industry, the answer changes.

The answer is that while it’s generally a no-no to call cell phones, for debt collection purposes, it’s OK, according to a revised ruling in 2008 by the FCC, collectors may use predictive auto-dialers and prerecorded calls to contact consumers on their cell phones.  When consumers provide their cell phone to a company, it’s considered “consent,” and that consent is, by definition, passed onto a third-party debt collector along with the business.

This latter rule – that debt collection companies accept the debt with “good faith” that the debtor had attained express consent – was recently clarified in a lawsuit filed by Pamela Chyba, who brought a TCPA action against First Financial Asset Management, Inc. Chyba claimed that FFAM made repeated calls to her cell phone using an auto dialer and without her permission, according to David Kaminski of law firm Carlson & Messler LLP and writing for the Web publication InsideARM.

Defendant FFAM, which was collecting on behalf of Enterprise Car Rental, said that since the plaintiff voluntarily gave her cell phone number to the car rental company in writing, it had a good faith belief that it had the right to call the number at issue. The district court agreed, noting that FFAM produced evidence that plaintiff provided her cell phone in the home phone number field in a document provided to Enterprise.

“This is the first time, to my knowledge, a court relied on a ‘good faith’ exception to a TCPA consent dispute based on a debt collector’s reliance on documents provided to it by a creditor,” said Kaminski. “In support of its ‘good faith’ holding, the district court relied on the 9th Circuit decision in Clark v. Capital Credit.  In Clark, the 9th Circuit held that with regard to ‘verification’ of a debt, a debt collector can rely on information provided to it by the creditor and has no independent duty to verify the accuracy of the information.”

This doesn’t mean credit collections companies are off the hook, however. There is a lot of room for error here. The cell phone number may be have been reassigned to someone else; if this is the case, it’s the debt collectors responsibility to cease calling. In addition, “good faith” means just that: third-party collections agencies should demand proof that their client was indeed given permission by the debtor. Finally, if a debtor tells you to stop calling their cell phone, any calls you make after that are in direct violation.