Wednesday, March 22, 2017
CUNA Meets with FCC Chairman's Staff
The Credit Union National Association (CUNA) announced today that they met this week with the staff of FCC chairman Ajit Pai. During the meeting CUNA expressed concerns about how recent changes to the interpretation of the TCPA, such as the July 2015 ruling on autodialers, are making it difficult for credit unions all around the country to communicate with their members. They also expressed concern that these new rulings have opened up the doors for frivolous class action lawsuits against credit unions. CUNA has highlighted the following problems: 1) The overly broad definition of what is considered an autodialer, 2) Unclear guidance about how a consumer can revoke consent, 3) Unclear guidance about calling reassigned numbers, and 4) Problems with requiring free-to-end user calls. Read the linked article for additional information.
Monday, March 20, 2017
California Judge Dismisses TCPA Class Action
Several weeks ago, a California judge dismissed a TCPA class action lawsuit against the United Student Aid Funds (USAF). The judge determined that USAF was not vicariously liable for the actions of the third party vendors it had hired to carry out debt collection on certain student loans. The plaintiff, who had 2 defaulted student loans, sued USAF when she received unsolicited calls from Navient Solutions Inc., who had been hired by USAF to collect. The court disagreed with the plaintiff, holding that there had been no "classical agency relationship," "implied actual authority" or "ratification" under which USAF could be held vicarious liability. Click here for more information.
Several weeks ago, a California judge dismissed a TCPA class action lawsuit against the United Student Aid Funds (USAF). The judge determined that USAF was not vicariously liable for the actions of the third party vendors it had hired to carry out debt collection on certain student loans. The plaintiff, who had 2 defaulted student loans, sued USAF when she received unsolicited calls from Navient Solutions Inc., who had been hired by USAF to collect. The court disagreed with the plaintiff, holding that there had been no "classical agency relationship," "implied actual authority" or "ratification" under which USAF could be held vicarious liability. Click here for more information.
What's on the Compliance Horizon for 2017?
2016 was a tough year for companies who were victim to TCPA, TSR and state regulatory cases. There are some reasons to think 2017 and beyond may not be quite so bad. For example, with the new presidential administration having appointed Commissioner Pai as the FCC's Chairperson, and given the current Republican majority on the Commission, we have good reason to expect FCC rulings over the next several years may be somewhat more reasonable and business friendly. Regardless of your politics, you should certainly like Commissioner Ajit Pai. Commissioner Pai is of course a proponent of the TCPA and is committed to fighting illegal robocalls. However, Pai strongly dissented to many of the FCC's recent rulings, including on the FCC's expansive definition of an autodialer, for example. Pai has made clear on several occasions that he thinks the TCPA has been misconstrued and has resulted in significant TCPA lawsuit abuse.
Also on the horizon is the impending decision in ACA Int'l v. FCC, currently before the DC Circuit Court of Appeals. Recall that a combination of 9 companies and trade associations sued the FCC in federal circuit court following the FCC's July 2015 ruling on autodialers, revocation of consent, and the reassigned number problem. That case was fully briefed in writing and a live, oral hearing was held in DC last October. The case is ripe for a decision now. Based upon some of the judge's questions during the hearing, I am hopeful that the industry will win on at least some of the issues in that case. For example, will the courts strike down the FCC's insufficient "one free pass" rule on the calling of reassigned number, or the impossibly harsh "future capacity" ATDS standard? Very possible and we will know any day now.
Finally, watch the recent FCC petition by Cunningham and Moskowitz under which they want to destroy implied "express consent" for automated non-marketing calls. These two petitioners are frequent serial TCPA plaintiffs. The FCC recently solicited comments on the petition. Under the Commission's new leadership, I won't be surprised at all when the Commission denies this petition - at least we hope! Stay tuned.
2016 was a tough year for companies who were victim to TCPA, TSR and state regulatory cases. There are some reasons to think 2017 and beyond may not be quite so bad. For example, with the new presidential administration having appointed Commissioner Pai as the FCC's Chairperson, and given the current Republican majority on the Commission, we have good reason to expect FCC rulings over the next several years may be somewhat more reasonable and business friendly. Regardless of your politics, you should certainly like Commissioner Ajit Pai. Commissioner Pai is of course a proponent of the TCPA and is committed to fighting illegal robocalls. However, Pai strongly dissented to many of the FCC's recent rulings, including on the FCC's expansive definition of an autodialer, for example. Pai has made clear on several occasions that he thinks the TCPA has been misconstrued and has resulted in significant TCPA lawsuit abuse.
Also on the horizon is the impending decision in ACA Int'l v. FCC, currently before the DC Circuit Court of Appeals. Recall that a combination of 9 companies and trade associations sued the FCC in federal circuit court following the FCC's July 2015 ruling on autodialers, revocation of consent, and the reassigned number problem. That case was fully briefed in writing and a live, oral hearing was held in DC last October. The case is ripe for a decision now. Based upon some of the judge's questions during the hearing, I am hopeful that the industry will win on at least some of the issues in that case. For example, will the courts strike down the FCC's insufficient "one free pass" rule on the calling of reassigned number, or the impossibly harsh "future capacity" ATDS standard? Very possible and we will know any day now.
Finally, watch the recent FCC petition by Cunningham and Moskowitz under which they want to destroy implied "express consent" for automated non-marketing calls. These two petitioners are frequent serial TCPA plaintiffs. The FCC recently solicited comments on the petition. Under the Commission's new leadership, I won't be surprised at all when the Commission denies this petition - at least we hope! Stay tuned.
Monday, March 13, 2017
FCC Seeking Comments on Petition Concerning Fax Opt-Outs
The FCC is asking for comments on two petitions concerning the agency's rules about required opt-out language on fax advertisements. The petitioners argue that based on the Anda Order (See page 2 of this document), faxes that were sent with the prior consent of the recipients should not require the opt-out language Additional information, including instructions for how to comment on the petition, can be found here. Click to watch a video about the general concept of "Prior Express Written Consent" in the direct marketing industry.
FCC Releases Notice of Proposed Rulemaking Regarding Unlawful Robocalls
Last week, the FCC released a Notice of Proposed Rulemaking (NPRM) regarding a potential change in robocall regulations. Based on the fact sheet released by the FCC, the NPRM:
- Proposes to adopt rules that providers may block spoofed robocalls when the subscriber to a particular telephone number requests that calls originating from that number be blocked (sometimes called “Do-Not-Originate”). This proposal builds on a clarification made by the Consumer and Governmental Affairs Bureau in 2016 at the request of the industry’s Robocall Strike Force.
- Proposes to adopt rules that providers may block spoofed robocalls when the spoofed Caller ID can’t possibly be valid, including numbers that haven’t been assigned to anyone yet.
- Seeks special comment on how to address spoofing from internationally-originated numbers, where scammers often hide to avoid U.S. legal processes.
Made in the USA?
Texas-based company Block Division, Inc. is in hot water after misleading consumers with "Made in the USA" labels on their products. Many parts of the company's products, which are mostly pulley blocks and equipment, were originated in other countries. Allegedly, some material for the final products was stamped with "Made in USA" labels before it was shipped from overseas to the United States. The FTC sued Block Division, and a settlement has been reached that will require the company to halt its misleading claims. According to the FTC's rules, companies may only use the term "Made in the USA" if the product is "all or virtually all made in the United States.
Click here to learn more.
Click here to learn more.
Bill introduced that would make sending call centers overseas more difficult
A bill that would add extra steps and costs for companies that want to move their call centers overseas was introduced in congress last week. The bill requires businesses with at least 50 call center employees to notify the Department of Labor at least 120 days before moving their call center out of the country. Failure to do so could result in fines up to $10,000 per day. Also included in this bill, businesses with call centers outside of the US must require their agents to disclose their physical location at the beginning of each call. Read the text of the bill here.
Arizona business opportunity seller faces criminal charges over new state telemarketing law
An unlicensed telemarketer in Arizona has been charged with a class 5 felony for making telemarketing calls without the proper state license. Lukeroy Rose is a business owner who had gotten into trouble in May of 2016 for allegedly selling fictitious business opportunities ranging from $3,000 to $40,000. In December 2016, Rose was caught again being involved in a similar, unlawful telemarketing operation. The Arizona Telephone Solicitations Statute, which was amended in August 2016, makes it a class 5 felony for unregistered telemarketers to make unlawful calls either to or from the state of Arizona.
Rarely do we see a telemarketing case turn criminal. However, this case involves a repeat offender and a significant fraud component.
Friday, March 3, 2017
Recent TCPA Cases
Van Patten v. Vertical Fitness Group, LLC
Plaintiff Bradley Van Patten signed up for a membership at a Gold’s Gym in Wisconsin in 2009. Days after signing up, he called to cancel his membership. Three years later, Van Patten had moved to California and ownership of the gym had ended its relationship with Gold’s and become an “Xperience Fitness” franchise. Marketing texts were sent to Van Patten during the summer of 2012 trying to get him to sign up for the gym again. Van Patten filed a lawsuit alleging violations of the TCPA and arguing that when he cancelled his gym membership, his consent to receive marketing messages was also revoked. On January 30th, 2017, a panel of judges in the Ninth District Court concluded that the plaintiff had given prior express consent and did not effectively revoke it.
Wells Fargo to settle two TCPA class actions
Wells Fargo is set to settle two TCPA class actions for a total of nearly $18 million. In the first case, Prather v. Wells Fargo Bank, the plaintiffs claim that Wells Fargo called almost half a million student loan borrowers using autodialers without the prior express consent of the call recipients. Wells Fargo denies the claims, but has elected to settle the case rather than keep fighting. In the second case, Luster v. Wells Fargo, the plaintiffs allege that Wells Fargo made millions of debt collection calls to consumers using autodialers without their prior express consent. The bank has argued that Luster and the members of the class are not entitled to damages. However, after mediation Wells Fargo has agreed to a settlement that would compensate 3.38 million members of the proposed class.
Los Angeles Lakers, Inc. v. Federal Insurance Company
The Ninth Circuit Court of Appeals recently heard oral arguments in a case involving the Los Angeles Lakers basketball team and their insurance carrier. At an October 2013 basketball game, a fan sent a text message to the team with hopes of having his message displayed on the big screen at the arena. When the Lakers responded to the text, and allegedly attempted to solicit business from the fan, the fan sued the team for violations of the TCPA. The Lakers settled that lawsuit, but then sued their insurance carrier for rejecting the team’s claim for defense and indemnity. Federal Insurance successfully dismissed the case, citing the policy’s exclusion for claims "based upon, arising from, or in consequence of...invasion of privacy." The Lakers have appealed. The outcome of the appeal with be very interesting, as it deals with the issue of whether exclusions for invasions of privacy in insurance policies limit coverage for claims under the TCPA. Click here for more information about this case.
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