Court Limits Use of Prerecorded Calls
Prerecorded cellular telephone calls from a debt collector aren’t allowed unless a consumer has agreed to allow them, a federal court ruled has ruled.
Those calls are covered by the Telephone Consumer Protection Act, which placed strong limits on phone and fax solicitations and. It was signed by into law by President George H.W. Bush in 1991. The law bans non-emergency prerecorded calls to a cell phone unless the call is “made with the prior express consent of the called party.”
The U.S. District Court of Northern Illinois, in its recent ruling, relied on a decision by the Federal Communications Commission that if a customer gives permission to a company to call him or her then that is an implied permission to a debt collection firm hired by the company.
The FCC ruled in 2007 that “calls placed by a third-party collector on behalf of [a] creditor are treated as if the creditor itself placed the call.”
The Financial Services Group of the law firm Ballard Spahr said there is a steady increase in litigation alleging violations of the TCPA. “We continue to see an avalanche of class actions against companies alleging TCPA violations.
In part, this is because penalties are draconian. Violations can yield damages equal to a minimum of the greater of $500 or actual damages, triple damages for willful violations, and unlimited class action liability,’’ according to an analysis.
The case was Frausto v. IC System Inc. The FTC also has enacted new rules governing debt collection from the estate of a credit union member.