Telephone Consumer Protection Act (TCPA)
Signed into law in 1991, the Telephone Consumer Protection Act (TCPA) is an outdated consumer protection statute restricting telemarketing calls, junk faxes and the use of automated telephone equipment. Much has changed since 1991. While the wireless marketplace and consumer use of this technology has rapidly evolved in the last twenty years, the TCPA has not. Plaintiffs’ lawyers are now exploiting the law’s outdated language and using conflicting federal court rulings to bring abusive and costly class action lawsuits against businesses. Reform is needed to clarify interpretation of the law and to protect businesses from these lawsuits. read more...
The TCPA allows consumers to sue companies for statutory damages of $500-$1,500 (depending on if the violation was willful) for each prerecorded call, specified autodialed call and unsolicited facsimile they did not consent to receive. At the time the TCPA was created, its sponsor, Senator Ernest “Fritz” Hollings (D-SC), explained the law was intended to facilitate actions in state small claims courts, which involve smaller sums and often do not require (or even allow) the participation of attorneys.
Today, however, TCPA cases are anything but small. Trial lawyers have used the law to file large class action lawsuits. The defendants in these cases are no longer just abusive telemarketers; they are businesses, big and small alike, forced to choose between settling the case or spending significant money defending an action where the alleged statutory damages may be in the millions or billions of dollars. Further, many of these companies are being sued for reasons outside of their control, such as dialing a number provided by a customer that was later reassigned to another party, or because an unaffiliated third party mentioned their products via phone call or text in an advertisement sent to consumers. One wrong call can be the basis of a class action lawsuit alleging millions of dollars in statutory damages and seeking discovery into every single call placed by that company to its customers going back four years. The risks of financial and reputational ruin strong-arms businesses into entering sometimes massive settlements even where there is no evidence of wrongdoing.
The growing trend of TCPA litigation already has caused many companies to consider discontinuing the provision of helpful information to customers, such as prescription availability, credit card fraud alerts or airline changes or cancellations.
Modernization of the TCPA is critical to resolving these issues. Businesses should not be faced with an untenable decision: whether to curtail communications with their customers because of the severe risk of class action litigation caused by the manipulation of an out-of-date statute by plaintiff attorneys.