Consumer Can Revoke Consent to Autodialed or Prerecorded Cell Phone Calls

The Telephone Consumer Protection Act (TCPA) permits a consumer to revoke consent given for autodialed or prerecorded calls to the consumer's cellular telephone number and does not limit the timing of revocation, the U.S. Court of Appeals for the Third Circuit has ruled. The Third Circuit's August 23, 2013, decision in Gager v. Dell Financial Services, LLC represents the first decision by a federal appellate court on both issues.

The TCPA prohibits autodialed or prerecorded non-emergency, non-telemarketing calls to cell phone numbers unless the call is made with "the prior express consent of the called party." (As discussed in our prior legal alert, effective October 16, 2013, the TCPA will require a signed, written agreement in which the consumer expressly consents to autodialed or prerecorded telemarketing calls to the consumer's cell phone.)

The Third Circuit was unwilling to conclude that the absence of an express statutory right of revocation in the TCPA meant that the plaintiff did not have the right to revoke her consent. As support for its decision, the court pointed to "the basic common law principle that consent is revocable." It also found its decision to be consistent with the TCPA's remedial purpose of protecting consumers from unwanted calls. In addition, it found that a 2012 Federal Communication Commission (FCC) ruling that a text message confirming an opt-out request is permissible under the TCPA supported the plaintiff's argument that the TCPA allows a consumer to revoke her prior consent.

The plaintiff had provided her cell phone number to the defendant at the time she completed her application for credit to purchase computer equipment. A 1992 FCC ruling provided that "absent instructions to the contrary,"a consumer's knowing release of a phone number constitutes permission under the TCPA to be called at that number. Based on that ruling, the defendant argued that, to revoke her consent, the plaintiff had to provide "instructions to the contrary" concurrently with providing her number to the defendant. The Third Circuit, however, was unwilling to find that any temporal limit exists on when a consumer can revoke her prior express consent.

The Third Circuit's decision cannot be reconciled with the fact that, in contrast to several other federal statutes, the TCPA does not contain any provision authorizing the revocation of consent. For example, the Junk Fax Protection Act of 2005 expressly allows for the revocation of consent. Since Congress knew how to provide for revocation when it desired, the absence of such a provision in the TCPA clearly indicates a contrary Congressional intent. Indeed, the Third Circuit noted that the 2012 FCC ruling on which it primarily relied "never articulated a rationale for deciding why the TCPA affords consumers the right to revoke their prior express consent." The Third Circuit's decision also leaves unresolved whether, as a number of federal district courts have ruled, consent may only be revoked in writing and not orally.

We continue to see a high volume of class actions alleging TCPA violations. In part, this is because the penalties are draconian. Violations can yield damages of $500 per violation or actual damages—whichever is greater—with a tripling of damages for willful violations and unlimited class action liability.

Ballard Spahr's Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). In addition to having vast experience in defending all manner of TCPA lawsuits, the group has counseled a number of clients on establishing autodialing and monitoring protocols.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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