A decision this year by the Second Circuit Court of Appeals has an impact on businesses and collectors who are communicating with delinquent consumers.
Business owners and those in collections or accounts receivable are likely familiar with the Telephone Consumer Protection Act (TCPA). As technology changes, we must always keep an eye on how legislation will affect our ability to communicate with people.
This summer a court upheld an earlier decision that the TCPA “does not permit a consumer to revoke his or her consent to receive automated or prerecorded cell phone calls if the previously given consent to receive such calls is part of a binding contract,” as the ACA put it.
The case stems from a consumer who allegedly revoked his consent to be contacted by an auto lender. The consumer listed his cell phone number on his lease application; in the lease agreement he signed he agreed to be “expressly consent[ed]” by the auto lender by “written, electronic or verbal means” including “contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems.”
That meant the auto lender could contact the borrower on his cell phone. After he defaulted on his payments, the lender contacted the consumer many times. The consumer filed a lawsuit claiming he had sent a written revocation notice — one the lender allegedly did not receive.
This case address only a narrow question: whether someone can unilaterally revoke consent. The TCPA itself does not discuss the situation of revoking consent. However, the court’s ruling says the consumer had signed a contract.
In similar cases, the consumer has won because his or her consent was provided gratuitously with consumer applications. In this case, the provision was included as part of the agreement holding that “one party may not alter a bilateral contract by revoking a term without the consent of the counterparty.”
This case, once again, emphasizes the need for consent forms from the start of any business relationship.
Collectors and members of the accounts receivable industry must make sure to add provisions in their agreements with this language to limit TCPA liability.
The court noted that this type of contact may lend itself to abuse by collectors, but agreed such changes must be left to Congress. As usual, we must continue to watch these cases; this won’t be the last word on the subject.