Advertising Law Blog

On November 15, 2016, the Federal Communications Commission (FCC) decided that mortgage servicing companies are not exempt from the prior express consent requirement of the Telephone Consumer Protection Act (TCPA). The ruling came in the form of an Order issued in response to a petition filed by the Mortgage Bankers Association.

Generally speaking, the TCPA prohibits robocalls to wireless telephone numbers and a few other specified recipients except when the robocalls are made: (1) for an emergency purpose; (2) solely to collect a “debt owed to or guaranteed by the United States”; (3) with the prior express consent of the called party; or (4) pursuant to an FCC-granted exemption. The term “robocalls” refers to calls placed using an automatic telephone dialing system (autodialer), to prerecorded or artificial-voice calls as well as to short message service (SMS) text messages and text messages sent made using Internet-to-phone technology.  

The Mortgage Bankers Association sought an FCC-granted exemption that would have allowed their members to make service (non-telemarketing) calls to mortgage holders, calls about delinquencies or to determine if the mortgage holder has abandoned the property. 

The FCC denied the petition for two reasons. One, the proposed mortgage service calls were not, in the opinion of the FCC, emergency in nature. Therefore, there is not a sufficient basis to set aside the privacy interest of the call recipients. Second, in reasoning that could affect TCPA litigation in federal courts, the FCC ruled that the proposed robocalls were unacceptable without prior consent because the Mortgage Bankers Association “has not demonstrated it can make these calls free to the end user… [it] fails to show that exempted calls would not count against any plan limits on the consumer’s voice minutes or texts.” 

TAKEAWAY: The notion that a call counts against a consumer’s limit of minutes or data on their cell phone plans could be important to plaintiffs in private TCPA lawsuits. A recent Supreme Court decision, Spokeo, Inc.  v. Robins, held that the violation of a statute alone may not be enough to support a lawsuit if the plaintiff did not also suffer some type of injury. That case did not involve the TCPA, but TCPA defendants have sought to apply its logic to unwanted call cases with limited success. Now plaintiffs will be able to further point to the FCC’s reference to loss of cell phone plan minutes as an injury that constitutes a basis to maintain a TCPA suit.