The U.S. Court of Appeals for the Seventh Circuit ruled companies employing automatic dialing technology must receive the consent of cell-phone subscribers before attempting to contact them. The Court affirmed class-action status for a group of consumers who had inherited their cell-phone numbers from previous subscribers and were suing a debt collector that had called them repeatedly.
The plaintiffs in Soppet v. Enhanced Recovery Company, LLC, claimed the defendant had violated the Telephone Consumer Protection Act. Although the plaintiffs’ cell phone numbers had been previously held by other individuals who may have granted consent when they were in possession of the phone number, the plaintiffs had not granted the same consent. This provision of the Act is the same that prohibits sending text messages to cell phones without consent.
The Seventh Circuit’s May 11 ruling was based on the court’s examination of whose consent is required: the original cell phone subscriber or the subsequent one. The court indicated Enhanced Recovery could have conducted reverse look-ups to ascertain whether the person who currently holds the number is the person who originally gave consent.
The case calls into question the actions of debt collectors, which have a little more leniency under “Do Not Call” rules than other businesses. In a 2008 ruling, it was determined that a customer who gives a phone number to a merchant or service provider has given tacit approval to any debt collector representing that merchant or service provider to call that number.
“Debt collectors can be rather unscrupulous, and this situation exemplifies that fact,” said David Bakke, editor at Money Crashers Personal Finance. “I’d imagine that at some point before this lawsuit was filed, the debt company was made aware of the issue and did nothing about it. Calling reassigned cell phone numbers is one of many things that these folks need to be sued over,” Bakke said.
“There are other tactics that could have been employed by the debt collection company, aside from the ones put forth by the court,” Bakke continued. “The debt collector could have had a real person make the first phone call to verify the owner of the cell phone number, and if it were determined that it was the correct number, they could have then switched to utilizing an auto-dialer. They could have also limited the amount of time that an opt-in for consent to receive phone calls is valid. This way, by the time the number was reassigned, the opt-in would have expired.”
Significant New Expense
David Schultz, a partner with Chicago-based Hinshaw & Culbertson, who filed an amicus brief on behalf of the Association of Collection Professionals, points out making a personal call first would add a significant new expense for collection agencies. The 2008 ruling did not limit opt-in time, he said, and some debts take years to collect.
The court had also suggested using publicly available sources to attempt to verify the numbers. But Schultz says numbers change so quickly that the publicly available sources are usually outdated, so they provide little if any help. Schultz notes the plaintiffs never complained they were financially affected, as these calls fell within the plaintiffs’ cell plans, so there were no charges for the call. Yet the defendant had to pay $500 to each member of the class-action suit.
“When TCPA was first written, there were only 7 million cell phones in this country. Now there is more than one cell phone for every person. The law needs to be revised,” Schultz said.
Phil Britt ([email protected]) writes from South Holland, Illinois.
Soppet v. Enhanced Recovery Company, LLC, U.S. Court of Appeals for the Seventh Circuit, May 11, 2012: http://www.ca7.uscourts.gov/tmp/J60XFCBA.pdf
“Telephone Consumer Protection Act: 47 USC § 227—Restrictions on Use of Telephone Equipment,” Cornell University Law School Legal Information Institute: http://www.law.cornell.edu/uscode/text/47/227