‘When Can I Call My Customer?’

By Jonathan Thessin

A 25-year old statute called the Telephone Consumer Protection Act has spawned a confusing set of rules about customer contact. But banks ignore TCPA at their peril: each unlawful phone call can cost up to $1,500 in damages.

TCPA prohibits, with limited exceptions, telephone calls to cell phones using an automatic telephone dialing system—better known as an “autodialer”—unless the caller has the prior express consent of the called party. TCPA was enacted in 1991, at a time when cell phones were not widely owned. Those who owned one were charged by the minute. Congress sought to protect these cell phone users from incurring charges from (unwanted) telemarketing calls.

TCPA goes beyond restricting telemarketing calls. It also restricts informational calls, such as a bank’s call to advise a customer of a low balance or fraud on the customer’s account.

In sum, these are the rules:

  • Telemarketing calls. TCPA requires prior express written consent to make (a) telephone calls using an autodialer or a prerecorded voice to deliver a telemarketing message to a wireless number; and (b) prerecorded telemarketing calls to a residential line.
  • Informational calls. TCPA requires prior express (oral or written) consent to make informational calls to a wireless number using an autodialer. No consent is needed to make informational calls to a residential number (i.e., a landline).

Text messages are treated the same as calls to a cell phone.

What is an autodialer? That question does not have a clear answer. The statute defines an autodialer as equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator” and “to dial such numbers.”

The Federal Communications Commission has stated that predictive dialers—equipment that dials a list of telephone numbers and connects each answered call to an agent—meets the definition. But the FCC has also ruled that an autodialer includes any equipment that has the “potential ability” to function as an autodialer. The FCC has even suggested that any phone more advanced than a rotary phone could be an autodialer—including an ordinary smartphone.

Bankers need to assess whether the phones they use could be considered autodialers and, if so, whether calls made from these phones comply with TCPA. If calls are made with the consent of the called party, bankers need assess whether that consent is documented sufficiently to withstand a lawsuit.

Compliance with TCPA became even more difficult when the FCC held that a business is liable for calling a wireless number for which the caller has obtained consent but which has been reassigned to another user. The FCC included a safe harbor for the first call made to a reassigned number, but a caller may not learn of the reassignment during that initial call. Nonetheless, the caller is liable under TCPA for any subsequent calls made to that number.

TCPA authorizes the FCC to exempt certain categories of calls from TCPA’s consent requirements. At ABA’s request, the FCC last year exempted four categories of calls made by financial institutions, including calls made to advise customers of suspicious activity on the customer’s account or of a data breach. The FCC attached several conditions to the exemption, including that exempted calls be made only to a number provided by the customer. ABA has asked the FCC to remove this counterproductive “provided number” condition from the exemption.

Nine parties have challenged the FCC’s interpretation of TCPA, and ABA filed a friend-of-the-court brief in support of that challenge. Although that legal action, if successful, may provide some relief for banks, compliance officers will need to continue to understand their bank’s telephone technologies and calling practices to avoid lawsuits and enforcement actions.

Jonathan Thessin is senior counsel in ABA’s Center for Regulatory Compliance.