One thing that telemarketers and other companies that communicate with their customers by calling their customer’s cellphones crave is clarity under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227.  The Sixth Circuit recently shed some light on the meaning of “prior express consent” under the TCPA in connection with calls by a creditor to its debtor’s cellphone in the case of Hill v. Homeward Residential, Inc., No. 14-4168 (6th Cir. August 21, 2015).

Stephen Hill obtained mortgage loan in 2003 and provided his home and work numbers to his lender.  Three years later, he cancelled his home phone and replaced it with a cellphone.  After his loan was transferred to Homeward, he contacted them and told them his primary phone was now his cellphone and gave them the number.  Hill eventually fell behind on his mortgage.  Hill worked out a loan modification with Homeward and again listed his cell phone on that document.  After Hill again fell behind on his payments, Homeward began calling him at work and on his cellphone.  Hill instructed Homeward to stop calling his work number and to call his cellphone instead.  Hill continued to provide his cellphone number to Homeward on subsequent attempts to modify his loan to save his home.  In all, Homeward called Hill 482 times from 2009 to 2013.  Of those calls, Hill alleged that at least 176 were made using “Praire,” a device “capable of autodialing a phone number.” 

Hill subsequently sued Homeward in federal court for violating the TCPA by allegedly making calls to his cellphone using an automatic telephone dialing system which is prohibited by the TCPA if  the calls are made without the recipient’s prior express consent.  The TCPA provides for damages of at least $500 for each call found to be a violation, and up to $1,500 if the violation is found to be wilful. The case was tried to a jury, which returned a verdict for Homeward after one day.

Hill appealed.  The primary issue on appeal was whether the jury instructions on “prior express consent” were overly broad.  The instructions read as follows:

"'Prior express consent' means that before Defendant made a call to Plaintiff’s cellular telephone number, Plaintiff had given an invitation or permission to receive calls to that number.

Autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the 'prior express consent' of the called party."

Hill argued that this jury instruction was improper because it left out a small excerpt from an FCC ruling – that “prior express consent is…granted only if the wireless number was provided…during the transaction that resulted in the debt owed.”  In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 F.C.C. Red. 559, 564 (2008). Hill argued that this ruling limits valid consent to consent given when the loan is originated, not consent given at some later point in time.

The Sixth Circuit disagreed, explaining that the FCC, unlike Hill, never uses the words initial or original before “transaction.”  Instead, the FCC says that the debtor has given his consent when he gives his number “during the transaction” that involves the debt.  23 F.C.C. Red. At 564-65, 567.  This includes giving a number in connection with the debt after his initial signing of the loan.

Finally, the Sixth Circuit also held that a debtor does not need to give specific consent to received calls from an autodialer because, at least in the creditor/debtor context, general consent suffices.  As the Sixth Circuit noted, this is in contrast with FCC regulations for telemarketers, which now require that a party consent, in writing, to being called by an autodialer, but those regulations specifically do not apply to calls between creditors and debtors.  47 C.F.R. 64.1200(f)(8); 23 F.C.C. Red. at 565.

As a result, the Sixth Circuit affirmed the jury’s verdict in favor of Homewood.