4 Things Lenders Should Know to Mitigate TCPA Risk

SAN DIEGO – One question Buckley LLP Partner John Redding often hears from his auto lender clients is: What is the status the Telephone Consumer Protection Act?

“The state of TCPA is a complete mess, let’s not kid ourselves,” was his answer last week at the Auto Finance Risk Summit during a presentation titled “TCPA Compliance in the Era of Mobile Communication.”

The compliance challenge for lenders stems from the fact that elements of the rule have yet to be fully defined. For instance, rules remain unclear around what constitutes an autodialer, how to treat calls to reassigned numbers, and dealing with customers who flip-flop on consent.

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The Federal Communications Commission — which oversees the TCPA — started working toward a new rule since ACA International, a trade group for debt collection agencies and creditors, sued the FCC over rules proposed in March 2018, Redding said. Since then, there have been some regulatory advancements. What follows is a list of TCPA-related issues that lenders should watch:

Reassigned Phone Number Database

In December 2018, the FCC created a “Reassigned Phone Number Database” designed to give clarity on recycled numbers as they relate to TCPA consent.

“The idea behind it is that a party looking to use an autodialer will have the ability to go in prior to dialing, check the database, and see if they, in fact, have the right number for the person they are trying to call,” Redding said. “We’re still figuring out how it’s going to work, but you will be able to go in to see if a number you currently have in your system for a customer for whom you’ve got consent is still with that person, or if that number has been reassigned by the telecom.”

From an operational standpoint, institutions using an autodialer will need a process in place to check the database to verify that the number was not reassigned. “That’s something operationally we’re all going to need to think about,” Redding said. He suggested keeping the notification that the database search produced no results, so you can demonstrate later that it was checked.

Robocalling and Spoofing

These two topics, Redding said, are under heightened scrutiny. As Congress and the FCC work to solve them, lenders who get penalized for robocalling and spoofing may see increased fines. The fine for robocalls may increase to $10,000 per call from $1,500 currently, he noted.

Manual Intervention

The crux of the confusion surrounding an autodialer is whether it is defined by its use or its capacity. “The problem for all of us right now is both yes and no, it just depends on the court we’re in,” Redding said. “That’s what’s made this particularly difficult.” He noted that manual intervention — which could entail a person physically dialing a number displayed on a screen or a person hitting the “Dial” button — may be the key to mitigating autodialer risk.

Redding urged lenders to understand the technology they use to call people and to understand how much manual intervention, if any, is involved in the process.

Customer Consent

With the FCC’s rule, which was upheld in the ACA International case, customers have the right to withdraw consent to be contacted by autodialers by any reasonable means. From a practical perspective, that means that any lender employee who interfaces with customers — whether at a branch, a call center, or receiving customer support emails — should be trained on how to process the withdrawal of consent, Redding said.

More than that, lenders need a feedback process to capture that withdrawal of consent, “because as soon as you have a withdrawal of consent and you don’t honor it, start running the clock and getting your checkbook ready,” Redding said.

Looking ahead, Redding advised the Risk Summit audience to watch the FCC closely, as it will likely be the body to make TCPA rule changes.