This article first appeared on the Ontario Systems Blog and is republished here with permission.

If you have not memorized Reyes, Jr. v. Lincoln Automotive Financial Services by chapter and verse, you have some homework to do. In Reyes, the Court applied a theory of common law called “bargained-for exchange of consideration” to its interpretation of an auto lease agreement. This theory applies when the consideration or promise from one party (promisor) is used to induce the other party to a contract (promisee) to incur a legal detriment and/or provide a legal benefit to the promisor. If a court determines the terms of a contract were bargained for and exchanged in good faith between the parties, it will hold the parties accountable to the terms of the agreement and enforce those terms.

In Reyes, the consumer promised– among other things – to agree to various forms of communications, and keep their contact information current throughout the term of the credit/loan/repayment agreement. Because the defendant extended credit in exchange for the consumer’s promise to pay and to keep his contact information current; the Court explained, the consumer could not unilaterally revoke his consent to receive autodialed calls on his cell. The result? Bargained-for consent cannot be revoked without the consent of the other party to the contract. Let’s check the score: Calling party 1; consumer 0.

The common law theory of bargained-for consent also resurfaced in Barton v. Credit One Financial. In this case plaintiff Barton alleged Credit One violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”), when it called his cell phone after he opened a credit card account with Credit One. As a condition to obtaining the credit card, Mr. Barton had agreed to the terms of the Visa/Mastercard Cardholder Agreement, Disclosure Statement and Arbitration Agreement, which provided in part: “by requesting and receiving, signing or using your Card, you agree:

“[y]ou are providing express written permission authorizing Credit One Bank or its agents to contact you at any phone number (including mobile cellular/wireless, or similar devices) or    email address you provide at any time, for any lawful purpose. The ways in which we may contact you include live operator, automatic telephone dialing systems (auto-dialer), prerecorded message, text message or email.”

After receiving what Mr. Barton claimed were harassing phone calls, he asked Credit One to cease and desist communications. The defendant did not comply with Barton’s request and the lawsuit ensued. The district court decided in favor of the defendant credit card company because the consumer had agreed to the terms and conditions of his credit card application, including consent to be contacted on his cell, as an inducement for the credit arrangement. Therefore, as a matter of law Barton could not claim he had unilaterally revoked consent and subsequently sue for having been contacted on his cell in violation of the TCPA.

These two decisions do more for our industry than most people realize. In essence, they provide a legal basis for you to work with your creditor clients, government clients and healthcare provider clients to include bargained-for consent terminology in their contracts, court orders, restitution agreements and admission documents. For example, the following script may be used – only upon the advice of legal counsel – to mitigate risk of a complaint or lawsuit when contacting a consumer:

*This is a template. Use only upon the advice of legal counsel.

You have provided us with the following cellular number__________ and the following email address __________.

By signing below, you understand and agree you are providing [COMPANY] and its affiliates, agents and service providers with your express consent to use written, electronic or verbal means to contact you.

This consent includes, but is not limited to, contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems about the [extension of credit/loan/services] provided to you today or in the future.  

You may revoke consent for us to contact you by any of these methods or otherwise restrict your permissions as provided in this form by simply calling us at ______________ between the hours of ____________, Monday through ___________, or visiting our business office any time you are at our facility, or on our website at _____________.

How would bargained-for consent give you an edge in your contact strategy? Take a minute or two to think about it, and talk it over with your executives and legal counsel. It’s just one more way you might be able to strengthen your compliance program, avoid risk, and continue moving your operation on the progressive trajectory you’ve already established for yourself and your agents.


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