Federal Court Rules All Debt-Collection Calls Exempt from TCPA

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Don Maurice

Don Maurice

A federal judge in Pennsylvania has ruled that the Telephone Consumer Protection Act does not apply to debt-collection calls, even calls made to cellular telephones. A copy of the decision in the case, Roy v. Dell Financial Services, is available here.

Noting that Congress enacted the TCPA to address telemarketing, the decision relied upon a portion of the Eleventh Circuit Court of Appeals’ decision in Meadows v. Franklin which stated, “the [Federal Communications Commission] has determined that all debt-collection circumstances are excluded from the TCPA’s coverage.”

The decision is certainly in the minority as nearly all courts examining the issue have determined that debt-collection calls made to cellular telephones using an automatic telephone dialing system or a pre-recoreded voice violate the TCPA if the called party has not provided their “prior express consent” to receiving such calls. The Federal Communications Commission, which issues TCPA rules, has also considered debt collection calls within the scope of the TCPA1.

The decision in Roy v. Dell Financial Services is on appeal to the Third Circuit Court of Appeals and we expect a decision within the year.

Roy Adds to a Growing List of Confusing TCPA Decisions

Roy joins several decisions over the past six months that have reached extraordinary conclusions, confusing interpretations of the TCPA. In May, a federal judge in the Southern District of Florida ruled that a consumer providing a cell phone number to a creditor is insufficient to establish the TCPA’s prior express consent. That case, Mais v. Gulf Coast Collection Bureau, Inc., rejected the argument it was bound by an FCC ruling, which found that “the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.” The Mais decision is on appeal to the Eleventh Circuit Court of Appeals.

A federal court in Wisconsin ruled in March that “preview dialing,” a form of automated dialing that requires human intervention to initiate the call, fell within the TCPA’s coverage (Nelson v. Santander Consumer USA, Inc.). Relying on a 2003 FCC ruling that predictive dialers constitute an automatic telephone dialing system, the court found that the telephony system here, although it did not use the predicative dialer, still had the capacity to perform “predictive dialing.” The decision was later vacated by the court and the case dismissed.

For assistance concerning TCPA issues, contact the attorneys at Maurice & Needleman who regularly defend and provide counsel on TCPA matters. The Consumer Financial Services Blog also provides a re-broadcast of its June 2013 webinar Hot Topics in TCPA Litigation, available here.

1 – See, FCC Declaratory Ruling, FCC 07-232, para. 11 (January 4, 2008) (“We also reiterate that the plain language of section 227(b)(1)(A)(iii) prohibits the use of autodialers to make any call to a wireless number in the absence of an emergency or the prior express consent of the called party. We note that this prohibition applies regardless of the content of the call, and is not limited only to calls that constitute ‘telephone solicitations.’ However, we agree . . . that calls solely for the purpose of debt collection are not telephone solicitations and do not constitute telemarketing. Therefore, calls regarding debt collection or to recover payments are not subject to the TCPA’s separate restrictions on ‘telephone solicitations.’”)


Continuing the Discussion

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  • avatar Sisko says:

    I’m happy for this decision, not because it’s a win for the good guys, but because I’m hopeful that this will force some higher courts to debate the issue and establish a clear decision. The TCPA situation is becoming far too confusing.

  • avatar Brian Moore says:

    Unfortunately, the judge in Roy v Dell and his colleague James Spencer in eastern Virginia, who made a similar ruling in Clayton v Aaron’s (Civ.A. No. 3:13-CV-219, 2013 WL 3148174 ) are rare birds indeed. Not many attorneys I have spoken with expect these rulings to survive their appeals.

    If we don’t get the TCPA modernized, pretty soon we will be reduced to making field calls as our only option for contacting debtors.

    All the more reason to get to DC the first week of October for the ACA’s Fall fly-in. http://www.acainternational.org/news-aca-international-announces-fall-washington-dc-fly-in-27743.aspx

  • avatar Time For Change says:

    I agree Sisko. So this article is saying that only in PA. this is the rule? Does every state have to make a ruling on it before we can move forward and not live in fear? Or can we consider this a ruling except in WI? Where can I find rulings by each state? Thanks.

  • avatar bill-mack says:

    Whoa whoa who! Don’t get too excited folks.

    Mr. Maurice failed to mention that, less than two months later, the Third Circuit Court of Appeals issued a slap-in-the-face ruling in a different TCPA case, captioned: Gager v. Dell Financial Services, (No. 12-2823). That appeal involved the same defendant, same argument, same District court. One of the issues on appeals was that the “District Court determined that, because calls regarding debt collection are not subject to the TCPA and because Dell’s calls were for debt collection purposes, Gager failed to allege a violation of the TCPA.”

    In its ruling, the Third Circuit directly addressed the issue, “Looking to the provisions of the TCPA that apply to autodialed calls to cellular phones and the exemptions promulgated by the FCC, it is clear that Dell’s argument is without merit.”

    It continued, “At first glance, Dell’s argument appears correct: the FCC regulations implementing the TCPA permit certain types of autodialed debt collection calls, including calls similar to the ones at issue in this case. See, e.g., 47 C.F.R. § 64.1200(a)(2)(iii), (iv) (exempting calls “made to any person with whom the caller has an established business relationship” and calls “made for a commercial purpose [that do] not include or introduce an unsolicited advertisement or constitute a telephone solicitation”). However, Dell fails to recognize that these exemptions do not apply to cellular phones; rather, these exemptions apply only to autodialed calls made to land-lines. See 47 C.F.R. § 64.1200(a)(2). Therefore, the debt collection exemption invoked by Dell is not applicable in this case.”

  • avatar Ron Williams says:

    Errr… not trying to rain on the parade here, but the headline to this story is highly misleading.

    If you read the decision, no where does it say calls placed to cell phones are exempt from the TCPA just because they’re debt collection, only that calls placed to wirelines (in this case, Dell was calling the debtor’s 1-800 number which caused him to incur cost per call, but it was a wireline number). If you read the other cases the court cites as precedent, they all refer to cases involving non-cell-numbers. This decision just reaffirms what we already know, that debt collection calls are not “telephone solicitations” and are exempt from the TCPA’s restrictions on calling wireline numbers.

  • avatar Steve Gold says:

    Is this a news article or advertisement for Maurice & Needleman?

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