The Telephone Consumer Protection Act (TCPA) continues to be a tool utilized by the plaintiffs' bar for class action litigation. But the Act is also being wielded in run-of-the-mill bankruptcy adversary proceedings as debtors' lawyers see an opportunity to recover potentially large damages not available under other statutory schemes. As a result, it is important to remember what exact conduct the TCPA prohibits and review a checklist of actions to help boost compliance with the Act.
The TCPA is found at 47 U.S. Code § 227 and prohibits the following:
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Making any call… using any automatic telephone dialing system or an artificial or prerecorded voice – (iii) to any… cellular telephone service…;
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Initiating any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party…; and
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Using any telephone facsimile machine… to send… an unsolicited advertisement, unless – (i) the unsolicited advertisement is from a sender with an established business relationship with the recipient; (ii) the sender obtained the number of the telephone facsimile machine through – [permissible means] and (iii) the unsolicited advertisement contains a notice meeting the requirements under paragraph (2)(D)….
The key component of the TCPA is the amount of damages available for violations. Damages range from $500 to $1,500 (if willful or knowing) per call with no cap on aggregate damages. One call, text or fax often can form the basis of a nationwide class action complaint or a more expensive settlement in a standard bankruptcy or state court case. There have been cases with the possibility of billions of dollars in exposure and settlements of up to $75 million. Even innocent TCPA violations can place companies at risk. Here are five actions to take now to help bolster compliance with the Act:
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Use opt-out messaging in all outbound calls or text messages.
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Investigate the options for mobile app notifications as an alternative form of communication.
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The ability for a customer to opt-out of inbound contact must be easy. Ensure there are opt-out options imbedded in your processes at various points in the relationship; look for opportunities available at account set up, as part of regular billing and during customer service calls.
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In addition to multiple opt-out options during the lifecycle of the relationship, consider having a specific, annual opportunity for customers to update their preferences.
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Conduct an analysis of training of front-line employees. Could your team use a refresher on the importance of validating customer contact information each time there is customer interaction?