No one likes junk mail, whether it’s through your mailbox, inbox or even as an incoming text message. Lucky for us, the Telephone Communication Protection Act (TCPA) was beefed up last year, bringing much needed updates to a law that was first introduced when faxing was de rigueur and the internet was still in its infancy. The TCPA of today imposes serious fines on companies that send spam without consent and the last few months have seen several major cases resolve in favor of consumers.
Capital One will now be required to enact changes to its policy for contacting customers and the use of cell phone numbers.
At the beginning of August, Capital One and three collection agencies agreed to a $75 million settlement as part of a class action lawsuit brought by customers who received automated cell phone calls. The calls were part of the companies’ attempts to collect credit card debt between January 2008 and June 2014 and were allegedly made to customers in the United States using an automatic telephone dialing system. While Capital One may have had a legitimate reason to contact customers, as well as a legitimate claim on the debts owed, the fact the calls used an automated dialer directly violated the TCPA, according to the suit.
In response to the proposed settlement, U.S. District Judge James F. Holderman called the agreement “fair, reasonable, and adequate.” Capital One will now be required to enact changes to its policy for contacting customers and the use of cell phone numbers. While sources familiar with the case admit that the bank’s actual consent defense was relatively substantial (i.e., Capital One argued that they had already gained permission to contact customers), it clearly wasn’t enough to convince the judge. Of the more than $75 million settlement, Capital One will pay $73 million into the fund.
Speaking of banks that found themselves on the wrong end of TCPA claims, Chase Bank USA was hit with a $34 million preliminary settlement last month following claims that it called and texted customers’ cell phones without consent. The suit was filed in Illinois and identified two subclasses (different groups of people who can submit claims as part of any resulting settlement): those who received unwanted text messages or voice calls, and those who received only voice calls. The preliminary settlement, which Chase and JP Morgan may accept while still denying the allegations contained in the suit, is calculated to grant every single class member between $20 and $40.
As with the Capital One case, the calls were allegedly made using an automated dialer and without customers’ permission. In an extra twist, JP Morgan has claimed that a class action waiver included in an arbitration clause signed by customers exempted the company from the lawsuit. That doesn’t seem to have convinced U.S. District Judge Gary Feinerman, however – and nor should it. Arbitration clauses continue to pose a worrying threat to consumers’ rights.
Now, it’s not just banks that fall foul of the TCPA. MetLife, Inc. just recently agreed to pay more than $20 million to end a class action lawsuit filed by customers who claimed a former MetLife employee attempted to sell insurance by sending out mass unwanted faxes. You have to wonder, in 2014, who exactly they were sending faxes to, but the fact remains that sending the messages without permission violated the TCPA. In its defense, the company pointed out that the faxes were sent from an employee's home, albeit in their capacity as a MetLife insurance salesperson, and that MetLife maintained “strict rules prohibiting unsolicited faxes.” More than 35,000 Missouri residents may have received the faxes between August and September 2012. The employee was fired by MetLife when his actions came to light.
In a fast-changing world, it’s important for both companies and consumers to ensure they know and, if necessary, enforce the rules regarding how and when contact should be made. Consumers should feel comfortable standing up for their rights – especially if unsolicited or junk communications are cluttering up your devices. Equally, companies must realize that it is both unacceptable and, in fact, illegal to send out junk advertisements without the permission and knowledge of customers or potential customers. The TCPA remains a vital piece of legislation and we can only hope that as technology advances even further the law remains up to date in its fight against the rising tide of junk.