Two TCPA Updates Auto Finance Companies Need to Know About | McGlinchey Stafford
Excellence in Automotive Financing – March 17, 2021
The Telephone Consumer Protection Act (TCPA) and the deluge of litigation that arises from its various interpretations are still relevant today. In fact, there are so many changes that it’s often difficult for a casual follower to filter the news from the noise. For example, court cases dealing with the constitutionality of the TCPA following the public debt relief have come fast and furious.
But will lenders update their compliance policy after each decision? Is it even possible to do this, given that the TCPA was ripe for circuit splits?
The answer is no. Although a consumer compliance management program incorporates monitoring of key disputes and legal updates, it is often difficult to determine what information is relevant to particular practices or what events may require a compliance program change.
Here are two high-level concepts to watch out for that are particularly relevant to auto financing:
1. Rules of the TRACED Act
The Automated Telephone Call Abuse and Crime Prevention and Deterrence Act (TRACED Act) ordered the Federal Communications Commission (FCC) to issue rules to codify the TCPA exemptions for calls to wireless numbers to clarify these exemptions and to modify the TCPA exemptions for artificial or pre-recorded voice calls made to residential telephone lines. This is to meet TRACED requirements to identify who can call, who can be called, and whether any limits are placed on the calls themselves.
Auto finance companies should be aware that the FCC has adopted limits for commercial and non-commercial calls to a residence that are not advertising or telemarketing. Additionally, the FCC has clarified the prior limits for calls made by a financial institution regarding fraudulent transactions, security data breaches, and identity theft.
- For business calls that do not constitute telemarketing to a residential line and that are made under an exemption, a business may make three calls using an artificial or pre-recorded voice within a 30 consecutive days. Consumers must be given the opportunity to opt out of these appeals.
- For non-commercial calls to a residential line, which could include research, market research, or similar non-commercial activities performed under an exemption, a business may make three calls using an artificial or pre-recorded voice during a consecutive period of 30 days. Consumers must be given the opportunity to opt out of these appeals.
- In addition, the FCC clarified that its prior guidance to financial institutions is in accordance with the TRACED Act, which exempts a financial institution from the TCPA to place calls to wireless numbers for certain events, such as fraud or theft. identity, data security breach or event resulting in the need for corrective action. For calls made under an exemption for any of these events using an automatic telephone dialing system or artificial or pre-recorded voice, the FCC has limited the number of calls to one maximum of three calls within a three-day period from a single financial institution to the affected account owner.
2. The Supreme Court could rule on Facebook v. Duguid from one day to another
facebook v. Duguid is a landmark United States Supreme Court case that will hopefully finally provide clarity on TCPA compliance nationwide. The Supreme Court will consider whether an automatic telephone dialing system encompasses any device that can “store” and “automatically dial” telephone numbers, even if the device does not use a random or sequential number generator. The Supreme Court recently issued opinions that were debated in late 2020, and we expect to see an opinion before the end of the term in June 2021.
This article first appeared on Auto Finance Excellence, a sister service to Auto Finance News, and is reprinted with permission. McGlinchey is pleased to be the Official Compliance Partner of Auto Finance Excellence, providing insight and thought leadership through webinars, podcasts and monthly columns.