In the early 1990s, telemarketing became a national problem, and telemarketers were designated as “public enemy number one.” Congress responded by enacting laws designed to regulate the activities of telemarketers.  In today’s post, we review the Telephone Consumer Protection Act (TCPA) and its impact on consumer finance companies.

Telemarketing conjures images of warehouses with thousands of cubicles staffed by miserable employees trying to sell knick-knacks to innocent people at dinnertime. So, why should a finance company worry about the TCPA?  There are two reasons: The first reason is that many finance companies telemarket without even knowing it.  If you call consumers to let them know about new loan products or offers, you could be telemarketing.  The second reason is that the TCPA covers many non-telemarketing calls as well.

The Federal Communications Commission (FCC) is responsible for administering and interpreting the TCPA.  From time to time, the FCC issues new interpretations or guidelines, and over the years, the FCC has expanded the scope of the TCPA.  For example, as we have discussed in a previous post, provisions of the TCPA now apply to text messages.

To highlight key provisions of the TCPA:

  • The primary purpose of the TCPA is to regulate solicitation and telemarketing calls, and the law establishes numerous restrictions and requirements for these types of calls. For example, a telemarketer may only call during specific hours. Also, telemarketers must maintain company-specific do-not-call lists and cross check the National Do Not Call Registry.
  • A company must have prior express consent before placing calls (not just telemarketing calls) to a mobile phone, using an automated telephone dialing system (ATDS) or an artificial or pre-recorded voice (known as robocalls). If the purpose of the call is non-telemarketing (e.g., account maintenance or debt collection), the consent can be oral or written, but if the purpose of the call is telemarketing/solicitation, the consent must be in writing.
  • A company must have prior, express written consent before making a telemarketing robocall to a residential landline.
  • The TCPA also lists restrictions on sending advertisements by facsimile.

Consumer finance companies need to be sure that calls to consumers are in compliance with the TCPA.  Ignoring the TCPA is a bad call.