MINNEAPOLIS (Legal Newsline) —The Association of Credit and Collection Professionals (ACA) recently published a white paper calling for reform to the Telephone Consumer Protection Act (TCPA).
The TCPA was enacted in 1991, ostensibly to protect consumer communication with businesses amid the changing environment of cellular technology. However, the ways consumers communicate with businesses has dramatically changed in the last quarter-century, but the TCPA has not.
“We have found that TCPA fails to effectively function as a consumer protection measure," Cindy Sebrell, vice president of Public Affairs for the ACA, told Legal Newsline in an email.
"Rather, it relies on outdated models of communication technologies and creates an uncertain environment for businesses. Additionally, TCPA-related litigation tends to result in sizable settlements with the bulk of those funds going directly to attorney’s fees while consumers receive only nominal awards.”
According to the white paper, "The Imperative to Modernize the TCPA: Why an Outdated Law Hurts Consumers and Encourages Abusive Lawsuits," the number of TCPA-related lawsuits increased 948 percent from 2010 through 2015. Although the “damages in a TCPA lawsuit are set at $500 per unintentional violation and $1,500 per intentional violation,” consumers are not getting rich.
“As of 2014, the average attorney’s fee for TCPA-related settlements was $2.4 million while the consumer received an average of $4.12,” Sebrell said.
“Furthermore, much of this litigation takes advantage of the vague and outdated guidelines established in the TCPA itself. This results in an environment where compliance-minded businesses seeking to engage in legitimate communications are faced with an inhospitable regulatory environment with little clarity as to how they can acceptably communicate with their customers.”
The ACA is not the only organization that is coming together to call for reform to the TCPA.
“Unwanted, random calls to cell phones are a problem, but we are not seeking to loosen existing restrictions on unwanted solicitations or open the doors to scams or fraudulent businesses," Sebrell said.
"We are asking for businesses to be allowed to use modern dialing technology to efficiently contact specific consumers with whom a business relationship has already been established."
The ACA wants the Federal Communications Commission (FCC) to clarify the TCPA to allow the use of modern technology while still maintaining Congress’ intent in enacting the law. Consumer privacy interests must still be protected, but legitimate business operations should not be impeded.
“Solicitations and non-solicitations are not the same thing. We think this is an important distinction that gets lost in the discussion,” Sebrell said. “Similarly, ACA would expect that these reforms clarify the TCPA so that it truly protects consumers rather than act as a vehicle for the enrichment of trial lawyers via frivolous lawsuits.”