TCPA Case Appeal Against Debt Buyer Addresses Express Consent on Cell Numbers

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A debt buyer last week lost its appeal of a ruling in a case where a consumer is seeking class action status over claims that the ARM firm auto-dialed cell phone numbers without express prior consent. The appeals court wrote that consent is given for cell numbers only at the credit application stage of the relationship.

The U.S. Court of Appeals for the Ninth Circuit in Pasadena, Calif. affirmed a lower court decision granting an injunction to the consumer and provisional class action status to his lawsuit.

The case, Meyer v. Portfolio Recovery Associates, explored whether the debt buyer was allowed to use an automated dialer to contact cell phone numbers it obtained in the skip tracing process. A district judge said that the company was not allowed, and issued a preliminary injunction against the process. The judge also granted Meyer’s suit provisional class certification.

In writing their decision, the three-judge appellate panel used language from a declaratory ruling issued by the FCC in 2008 as justification for determining whether a consumer has given express prior consent to reach them on a cell number under the Telephone Consumer Protection Act (TCPA). The language states that consent is considered given only when a consumer provides the cell number at the time of transaction:

The Federal Communications Commission (FCC) issued a declaratory ruling clarifying the requirement for consent in the context of the TCPA that defeats PRA’s argument. Pursuant to the FCC ruling, prior express consent is deemed granted only if the wireless telephone number was provided by the consumer to the creditor, and only if it was provided at the time of the transaction that resulted in the debt at issue. Thus, consumers who provided their cellular telephone numbers to creditors after the time of the original transaction are not deemed to have consented to be contacted at those numbers for purposes of the TCPA.

The company also argued that the specific consumer might not be eligible for lead class representative due to prior convictions for “deceptive conduct.” But the appellate opinion (PDF file:  Meyer-v-PRA-appeal) noted that the convictions were a long time ago and that the consumer had “since taken positive steps in his life.”

The district court did consider PRA’s argument that Meyer’s criminal record included convictions for deceptive conduct, but it also considered that Meyer’s convictions were from 1998 and 2001, more than 10 years ago, and that Meyer had since taken positive steps in his life, including his graduation from the University of California. On this record we cannot say the district court abused its discretion by accepting Meyer as a provisional class representative.

The case was argued on May 10 in Pasadena before a panel comprised of circuit judges Dorothy W. Nelson, Raymond C. Fisher, and Morgan Christen.

Editor’s Note: Do you have questions about this case as it relates to debt collection? Sign up for insideARM’s first Ask the Attorney session on Thursday, October 25 to submit this question to a panel of ARM experts.

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Posted in Collection Laws and Regulations, Debt Buying, Debt Collection, Dialers, Featured Post, TCPA .

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Continuing the Discussion

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  • avatar Joe Potter says:

    When will common sense have a place in our legal system? When will our government modernize? Anyone know where the two presidential candidates stand on these two questions or issues related to the ARM indusrty? Indusrty leaders need to do more to address the underlying issues in this case and soon or calling a borrower and asking them to live up to their obligations will become as ancient as the old account card file system for records management and the cost of credit not to mention its accessibility will skyrocket and being a debtor will become a desired label.

  • avatar Jill Garance says:

    I keep wondering what the intent is behind the cell phone consent laws in this age of unlimited calling plans and one-in-five individuals only having a cell phone (no land line). There are two results from this: 1) collections departments/agents will eaither heavily invest in technologies to capture, store, and track consents or go to completely manual dialing for cell phones as we have seen some of recently. This will significantly increase costs for companies extending credit and will affect the availability of credit to those who need it.
    2) Collections departments/agencies will only call a cell phone through an auto dialer for the portion of the debt that is delinquent after the consent was given. Then the agent will go “on break” and manually dial the cell phone immediately back to collect on the prior debt. This will seriously annoy the end consumer.

    I am waiting for the next story in this saga to explode… expiration of cell phone consents.

  • avatar Patrick Lunsford says:

    @ Joe: Obama did have a proposal that we covered last year. Here is the link to the article and the first paragraph: http://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/obama-proposal-loosens-restrictions-on-cell-phone-calls-for-debt-collection/

    Buried in President Obama’s deficit reduction plan unveiled Monday was a provision that would allow cell phone calls for the purpose of debt collection. But the brief proposal seemed to cover only debt owed to, or guaranteed by, the Federal Government.

  • avatar Collection Veteran Since 1964 says:

    The Ninth Circuit again made an incorrect decision. Now a mad rush to at least the 10 states in the 9th Circuit by collection entities. According to a researcher there is 1 in 10 that only have landlines and that keeps grwoing smaller. I suppose that now credit contracts that a consumer signs allowing contact by cell phone becomes meaningless and will require written consent to call a cell phone by a third party servicer and that is if you can reach out by a landline phone to ask! If there is a failure, and if there was no ability to first identify if the cell phone belonged to the debtor(s), and if so there was already a written authorization signed by the debtor to contact via cell phone, then no attention was given to the FCC ruling in 2008. Be assured attention to this decision will be coming to all in the industry from other regulators as well.

  • avatar todd-bean says:

    And the beauty is a TCPA violation is a FDCPA per se violation.

    Under the FDCPA, there is not a “requirement” “right” or “entitlement” for a debt collector to communicate with consumers, and/or leave voice mail messages for consumers.

    “Calling automated telephone messages is an inherently risky method of communication and debt collectors use such a mode of communication at their peril.” See, Berg v. Merchants Assoc. Collection Div.,Inc., 586 F. Supp. 2d 1336, 1344 (S.D. Fl. 2008).

    This is not the courts restricting the police and giving more rights to criminals. There is no “right” to contact consumers just because you own a debt or you allege a debt is due another. You’re crying like public safety has just dealt a huge blow by some crazy court ruling that will now allow thousands of convicted felons out of prison.

    In my lawsuits I always argue the debt collector came into my home, uninvited, via my cellphone and violated (then list the numerous violations). It’s true, you’re uninvited. We have courts of law and the United States Postal Service if you want to communicate with me.

  • avatar Debt Guy says:

    At some point logic will prevail and our laws will be updated to reflect reality. The pendulum has swung far in the consumers favor to the point of absurdity. I’m definitely suing a lot more often these days than I used to but I can’t imagine that this is the preferred outcome for the courts or consumers.

  • avatar Jill Garance says:

    @todd-bean – There is regular business and then there are extremes. We hear a lot about extremes through high profile court cases, consumers rants on websites, and any other media. The extremism gets the attention. The regulation hinders regular business. I have no issue with regulation as long as it is reasonable and considers both extremes.

    If my bank, my credit card company, mortgage holder, is not allowed to contact me quickly and efficiently to let me know that they have not received my payment this month, I will not know know that I accidentally forgot, the bill pay I set up had a transmission issue, or whatever the reason. As a consumer, I would be frustrated that these companies did not reach out to me on whatever numbers I have to alert me so I could address the issue. Maybe I only gave them a cell phone number. That delay could cost me fees and finance changes. As a consumer, I could even mistake their delay in contacting me as attempt to collect more fees out of me. My point is that there are good reasons to be calling phone numbers, even cell phones, on auto dialers. Excluding this altogether is unreasonable.

  • avatar todd-bean says:

    Jill,

    Come on, we all know we are not talking about one missed payment that got lost in the mail. We are talking about accounts that are so far delinquent that all parties know, or the account has been sold off. Sue or go away on those accounts, don’t bother me by phone. Letter is okay to a certain extent but you start ringing the phones and you’re just asking for problems, as you can clearly see by the courts decisions.

  • avatar Ken Wilson says:

    I’m a collection attorney. I sue consumers regularly for unpaid account balances. We also send letters and make calls (which we always manually dial if the call is to a cell phone number and go to great lengths to insure the receipient is not inconvenienced by the call). Todd-Bean suggests creditors only letter or sue accounts that are seriously delinquent because calls – especially those to cell phones – invade a consumer’s privacy. I could not disagree more. The FDCPA and many similar state laws and regulations provide a simple, low cost solution to consumers who want no telephone calls – a Cease Communication Request. We receive many such requests each day an honor every one of them. To advocate that consumers prefer to be sued (potentially resulting in the entry of a judgment against them and a potential negative on their CRB) as opposed to receiving a call about the account is, in my professional opinion, short sighted.

  • avatar ca peterson says:

    the creditor/servicer has the right to collect and the debtor can choose to answer the phone or not

  • avatar todd-bean says:

    Ken,

    You’re 100% correct when you say “provide”. What it seems like I see a lot of is a mentality there is a “right”

    And I understand the C&D. I sent a refusal to pay, which as you know acts as a C&D, which of course was promptly violated. I’m four months into a federal lawsuit as I went straight to the courthouse and did not beg them to pay for their violations.

    Send a letter, if you have to, and then sue. If not you’re going to keep getting hit with what your industry sees as debtor abuses of the system.

  • avatar Debt Guy says:

    There is no mentality more ridiculous than the one you’ve just displayed, Todd. “How dare you try to talk to me about a debt that I owe and haven’t paid!” When this constitutes abuse there is something laughably wrong with our system. It defies logic and decency.

  • avatar todd-bean says:

    Look, despite what you guys preach, a very, very minimal amount of people just wake up one day and say, you know what, I’m done paying bills. I know if I have a past due bill or a sold off account. I don’t need somebody calling me. If you want to send me a letter or two and let me know my options, fine.

    However, I’m fully aware of my financial situation. I don’t need six calls a day. I’ll either pay or I won’t. You then do what you deem best based on my decision and let’s be done with it.

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