September/October 2011

In this issue:

  • The FTC has raised its charge for the national “do-not-call” list from $55 to $56 per area code with a maximum fee of $15,503 for a nationwide list. The revised fees become effective on October 1, 2011.
  • The United States Supreme Court will hear a case to determine whether federal courts have jurisdiction over TCPA actions. There is currently a division in the circuits with some federal courts holding that they can hear TCPA actions and others holding that such actions can only be brought in state court. Mims v. Arrow Financial Services.
  • An Illinois court has ruled that a debt collector is entitled to call the plaintiff’s mobile telephone number which he provided pursuant to an agreement with the debt collector. Because he provided the telephone number to the debt collector, the judge ruled that the debtor expressly consented to calls to his cell phone at that number. Frausto v. IC Systems.

Federal Trade Commission
The FTC has stepped in regarding the bankruptcy of Borders Bookstores with regard to how consumer personal information in possession of the bankrupt company will be treated.  Because the company expressly represented to customers that their information would not be rented or sold to third parties except in rare circumstances, the FTC intends to enforce this agreement even though the company is now in bankruptcy.

The FTC has sought public comment regarding proposed amendments to the Children’s Online Privacy Protection Rule.  Comments are due on November 28, 2011.

The FTC has raised its charge for the national “do-not-call” list from $55 to $56 per area code with a maximum fee of $15,503 for a nationwide list.  The revised fees become effective on October 1, 2011.

United States Supreme Court
The United States Supreme Court will hear a case to determine whether federal courts have jurisdiction over TCPA actions.  There is currently a division in the circuits with some federal courts holding that they can hear TCPA actions and others holding that such actions can only be brought in state court.  Mims v. Arrow Financial Services.

California
Governor Gary Brown has signed Senate Bill 24 which amends the State’s security breach notification rules.  Any breach notification sent to more than 500 California residents is also required to be sent to the Attorney General.

A California court has ruled that the defendant’s initial offer to settle with the plaintiff did not prevent that plaintiff from bringing a class action for wireless “spam” against the defendant. Gomez v. Campbell-Ewald Co.

Illinois
An Illinois court has ruled that a debt collector is entitled to call the plaintiff’s mobile telephone number which he provided pursuant to an agreement with the debt collector.  Because he provided the telephone number to the debt collector, the judge ruled that the debtor expressly consented to calls to his cell phone at that number.  Frausto v. IC Systems.

In another debt collection case in Illinois, a federal judge ruled that a consumer who owned the telephone number of another consumer could bring a cause of action under the TCPA because that person did not consent to the calls.  Soppet v. Enhanced Recovery Co.

Comment:  This is one more example of how a business needs to ensure its database is accurate when it calls that database using a predictive dialer if the database includes cell phone numbers.

Missouri
Debra K. Lumpkin has been appointed to head Missouri’s No-Call Enforcement Division in St. Louis.  From her first month on the job, I expect that office to continue to be active with regard to enforcement of Missouri’s No-Call law which contains many exemptions, sometimes not recognized by the state when it evaluates consumer complaints.

New York
A New York court has affirmed the FCC standard for express consent for calls to cell phones under the TCPA.  Moore v. Firstsource Advantage, LLC.  In that case, a debt collector could not prove that it obtained the plaintiff’s cell phone number from that plaintiff.

Comment:  It is extremely important for TCPA compliance that you maintain records showing express consent if you intend to rely on that exemption.  If you do not have the appropriate records, substantial or even catastrophic liability could result under the TCPA.

Ohio
An Ohio court has declined to certify a class action brought by the recipient of an unsolicited fax advertisement.  Miller v. Painters Supply & Equipment Co.  The court ruled that the trial court did not abuse its discretion when it found that an individualized inquiry would need to be made regarding each individual recipient to determine whether or not that person expressly consented to receive the fax from the sender.

The Ohio Senate is considering a bill (SB 223) which would give the Attorney General investigative powers regarding telemarketing fraud and make fraud with damages greater than $150,000 a felony.  Fraud against elderly persons would also be subject to greater penalties.

Texas
A Texas court has ruled that its state law regarding calls to cell phones was not preempted by the TCPA.  Tex. Bus. & Com. Code § 35.47.  First National Collection Bureau, Inc. v. Walker.  It ruled that the state statute was not more restrictive than the TCPA and, therefore, was not preempted.

Comment: Preemption is the doctrine that federal law applies, and varying state law does not. While the FCC has said the TCPA would “almost certainly” preempt differing state law, several courts have not agreed, resulting in a “patchwork quilt” of regulation for interstate telephone calls. When I heard the Supreme Court was going to take a TCPA case, I hoped it would answer the question of preemption- a question much more important for compliance that the question of which court, state or federal, has jurisdiction over TCPA claims.

Vermont
The state of Vermont has initiated several investigations involving allegations that the state’s written notification of sale statute was violated by telemarketers.  The law requires disclosure of the date of transaction and a notice of the consumer’s right to cancel as well as other information.

Comment: Many states require written notification of telemarketing sales and often include the requirement that the state’s cancellation period be disclosed. These requirements are often ignored and seldom enforced, but at least one state will sue if it receives complaints from consumers.

Washington
A Washington class action lawyer will review complaints filed with the State’s Attorney General regarding prerecorded messages in an attempt to generate more class action plaintiffs for his firm.  You need to treat Attorney General complaints seriously and realize that they can cost more than the time needed to send a brief response.

Wisconsin
The Wisconsin Senate is considering a bill (SB 185) which would include unsolicited text messages within the definition of “telephone solicitation” subject to the state “do-not-call” list.

Comment: Unsolicited text messages are already illegal under the TCPA and can subject the sender to massive class action liability under that statute.  This law, if passed, would be redundant.

Commentary

TCPA Statute of Limitations & Class Actions

Debt collection calls to cell phones