The U.S. Court of Appeals for the Eleventh Circuit has ruled that a debtor may not provide the “prior express consent” required by the Telephone Consumer Protection Act (TCPA) for autodialed collection calls to be made lawfully to another person’s cell phone number unless the debtor is acting as the other person’s agent when doing so.

The Eleventh Circuit’s further ruling in Osorio v. State Farm Bank, FSB that consent under the TCPA may be revoked orally appears to represent the first appellate decision on this issue. The court also ruled that the TCPA prohibition on autodialed or prerecorded non-emergency calls to cell phone numbers unless the call is made with “the prior express consent of the called party” is not limited to calls for which the called party is charged.

The collection calls were made to a cellular phone number given by the debtor during the process of applying for car insurance and a credit card to pay for the insurance. The evidence reflected a dispute as to whether the debtor, before the calls were made, had asked the bank to change its records to reflect the called number as an emergency number belonging to the non-debtor rather than as the debtor’s work number. In addition, the non-debtor testified that he had twice told the bank to stop calling him.

The district court had ruled that the calls did not violate the TCPA because the debtor could provide “prior express consent” for the calls to be made to the non-debtor’s cell phone number. According to the district court, the debtor had authority to consent even if the called number actually belonged to the non-debtor because she lived with the non-debtor, was raising a son with him, and shared a phone plan with him that was listed in his name.

The Eleventh Circuit rejected the bank’s argument that for purposes of the TCPA’s consent requirement, “the called party” who can provide consent is the “intended recipient” of the call. Concluding that the necessary consent could only come from the subscriber, either directly or through an authorized agent, the Eleventh Circuit held that the bank needed to show that it had the non-debtor’s consent to call his phone number. The court rejected the argument that the bank could use the debtor’s “common authority” over the called number to demonstrate such consent and indicated that the bank could do so by showing:

• The existence of an agency relationship allowing the debtor to consent to the non-debtor receiving the calls
• The debtor’s exercise of that authority by giving the non-debtor’s phone number in connection with her debt

The court then ruled that because the key facts regarding agency were in dispute, the agency issue could not be decided on summary judgment. Specifically, the court noted that based on the debtor’s claim that she gave the non-debtor’s number only for emergencies, a jury could find that she was exercising only a limited scope of agency and not the agency to consent to collection calls to that number.

In ruling that consent under the TCPA may be revoked orally and does not require written notification, the Eleventh Circuit criticized the district court for “conflat[ing] apples and oranges” in deciding the TCPA issue by relying on cases that have held consent to collection calls cannot be revoked verbally under the Fair Debt Collection Practices Act. The Eleventh Circuit further ruled that because there was a factual dispute as to whether the non-debtor had told the bank to stop calling him, the issue of whether any consent given to the bank had been revoked could not be resolved on summary judgment.

The Eleventh Circuit also rejected the bank’s alternative argument that because the TCPA prohibition on making autodialed or pre-recorded calls without “prior express consent” applies only to calls for which the called party is charged, and it was undisputed that the debtor and non-debtor had not been charged, the bank was entitled to summary judgment. The TCPA prohibition covers calls “to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call.” The Eleventh Circuit concluded that the modifier “for which the called party is charged for the call” only modified “any service” and not the other services listed.

Finally, the Eleventh Circuit reversed the district court’s grant of summary judgment in favor of the bank on its claim that the debtor had negligently represented to the bank that the non-debtor’s cell phone number was her own. The district court had determined that the bank’s reliance on this representation caused it to incur significant legal expenses and awarded the bank approximately $132,000 in legal fees. The Eleventh Circuit would not rule on the reasonableness of that award, observing that the issue was intertwined with the merits of the bank’s claim.

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.