A federal court in Wisconsin held that calls made using Voice over Internet Protocol (VoIP) apps may result in liability under the Telephone Consumer Protection Act (TCPA) where the called party incurs a charge for the call or a deduction of credits from the recipient’s account.

The dispute centered on the TextMe app, which allows users to send and receive calls and text messages via the Internet. John Baemmert claimed he received more than 60 calls over 12 days from Credit One Bank vendors attempting to collect credit card debt. Baemmert did not have a Credit One card and repeatedly informed the callers they had the wrong number. He eventually sued under the TCPA.

The defendant moved for summary judgment, arguing that the plaintiff failed to show that the calls were made to a number “assigned to a … cellular telephone service” or that he incurred a charge for the call, as required by section 227(b)(1)(A)(iii) to recover damages under the statute.

U.S. District Court Judge James D. Peterson agreed with Credit One that the plaintiff’s number was not assigned to a cellular telephone service.

To receive calls, Baemmert downloaded the TextMe app, which allowed him to use his cellphone only when connected by Wi-Fi to the Internet. The app used a credit system in which use of the app’s various functions depleted a user’s credits. For example, Baemmert received some credits for free when he downloaded the app and then obtained more credits by purchasing them or by watching advertisements.

So while the plaintiff’s smartphone was a device capable of receiving cellular service, the calls were not made to a number assigned to a cellular service, the court explained.

However, the court found that the TextMe app satisfied the second prong of section 227(b)(1)(A)(iii), as Baemmert was charged for the calls. Although the U.S. Court of Appeals for the Seventh Circuit hasn’t weighed in on whether the call-charged provision applies to VoIP apps, courts in Massachusetts, New York, and Pennsylvania have found that it does.

During his deposition, the plaintiff testified that “TextMe gave him only a limited amount of credits when he downloaded the app and that he had to pay money to get more credits,” Judge Peterson wrote. “He testified that he had to pay for the credits he spent on the phone calls he received from Credit One’s vendors … So Baemmert has presented admissible evidence to show that he incurred charges for the collection calls made for Credit One.”

Denying the defendant’s motion for summary judgment, the court said the case should proceed to trial for a determination of the number of calls made by Credit One that violated the TCPA.

To read the opinion and order in Baemmert v. Credit One Bank, click here.

Why it matters: The Wisconsin court’s opinion provides an important reminder that new and evolving technologies may be subject to the TCPA. This decision adds to the growing number of courts that have recognized that calls made using VoIP apps may trigger liability under the TCPA if the called party incurs a charge for the call or a deduction of credits from the recipient’s account.