Untangling the TCPA

Collector, Mar 2008 by Hayes, Valerie, Cherner, David D

FCC issues declaratory ruling regarding dialing wireless numbers.

Almost all federal laws governing the credit and collection industry grant authority to various federal agencies to impose additional rules and regulations implementing such laws. These agencies also have the authority to interpret their own rules and regulations. A significant amount of resources is necessary to request and obtain such interpretations as they are rarely issued. Most importantly, however, these interpretations assist to further explain how federal rules and regulations impact our industry. Recently, the Federal Communications Commission (FCC) issued an interpretation regarding how debt collectors and creditors place autodialed and prerecorded calls to a consumer's wireless number.

The Telephone Consumer Protection Act of 1991 (TCPA) prohibits the use of any autodialers and predictive dialers or an artificial or prerecorded voice to place calls to any wireless number except for emergency purposes or with the called party's express consent. Since the TCPAs inception, the FCC, charged with rulemaking authority over the TCPA, implemented regulations and provided guidance over the application of the TCPA. In an effort to clarify how the TCPA applies to the credit and collection industry, ACA International submitted a petition to the FCC in 2005 requesting the FCC publish an order explaining the TCPA prohibition against autodialed or prerecorded message calls to wireless numbers does not apply to creditors and debt collectors when initiating such calls to wireless numbers for debt collection purposes. The FCC issued a declaratory ruling in response to ACAs request on Jan. 4, 2008.

In particular, the FCC ruled that autodialed and prerecorded message calls to wireless numbers provided by the called party in connection with an existing debt are permissible because such calls are made with the prior express consent of the called party.

The FCC's recent ruling is by no means an absolute clarification on the TCPA and the application of the prior express consent provision toward creditors, debt collectors and asset buyers. The ruling does, however, provide significant clarity on a number of issues. As an overview, the FCC's ruling clarifies the following:

1. A creditor, debt collector or asset buyer is not prohibited by the TCPA from manually placing a call to a consumer's wireless number in connection with a debt.

2. A creditor, debt collector or asset buyer is permitted to make autodialed and prerecorded message calls to a consumer's wireless number in connection with an existing debt so long as the consumer provides prior express consent to that calling party.

3. A consumer provides prior express consent to be called at her wireless number via autodialer or prerecorded message if she knowingly releases her wireless telephone number to the calling party. Such consent does not have to be in writing.

4. A consumer who gives prior express consent to the creditor similarly gives such consent to the debt collector calling on behalf of the creditor.

Plain Language of the TCPA

The TCPA, specifically 47 U.S.C. section 227(b)(l)(A)(iii), prohibits a person from making "any call using any automatic telephone dialing system or an artificial or prerecorded voice" to any wireless telephone number. However, the statute explicitly permits making autodialed or prerecorded message calls to a wireless number under two circumstances: (1) if the call is made for an emergency purpose; or (2) if the call is made with the prior express consent of the called party.

Thus, the prior express consent exception to making autodialed and prerecorded message calls to a wireless number has always been an exception to the TCPA prohibition on making autodialed or prerecorded message calls to a consumer's wireless number.

In 2003, the FCC published rules and regulations to implement the requirements of the TCPA. Among other things, the FCC acknowledged that exceptions exist to the prohibition of the placement of autodialed and prerecorded message calls to wireless numbers.

As a result of the plain language of the TCPA and the FCCs acknowledgement that exceptions exist regarding the making of autodialed and prerecorded message calls to wireless numbers, any person, including creditors, debt collectors or asset buyers, are permitted to make autodialed and prerecorded message calls to a consumer's wireless number so long as the consumer gave prior express consent to do so. It's important, therefore, to underscore that the recent FCC ruling does not concern the prior express consent exception under the TCPA that has always existed. Moreover, neither the TCPA nor the FCC's recent ruling prohibit a creditor, debt collector or asset buyer from manually calling a consumer's wireless number.

The FCC's declaratory ruling clarifies that "autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with a preexisting debt are permissible as calls made with the 'prior express consent' of the called party." The FCC again acknowledges the plain language of the TCPA, namely that autodialed and prerecorded message calls are permitted if the calling party has the prior express consent of the called party