Telephone Consumer Protection Act (TCPA)

I. Understanding TCPA

What is the Telephone Consumer Protection Act (TCPA)?

The Telephone Consumer Protection Act (TCPA) is a federal law enacted in 1991 to protect consumers from unwanted telemarketing calls, automated dialing systems, and prerecorded messages. The law restricts how businesses can contact consumers by telephone, text message, and fax.

The Federal Communications Commission (FCC) implements and enforces TCPA regulations. Key amendments include 2012 rules requiring prior express written consent for marketing calls using autodialers or prerecorded messages.

What communications does TCPA regulate?

TCPA regulates calls made using automatic telephone dialing systems (autodialers), artificial or prerecorded voice messages, and text messages. The law distinguishes between calls to residential landlines and wireless numbers, with stricter requirements for wireless communications.

Following the Supreme Court's 2021 decision in Facebook v. Duguid, an autodialer must have the capacity to store or produce telephone numbers using a random or sequential number generator. Text messages are considered "calls" under TCPA.

What types of businesses must comply?

All businesses making telemarketing calls, sending marketing text messages, or using autodialers or prerecorded messages must comply with TCPA. This includes telemarketers, debt collectors, financial services companies, and any entity contacting consumers about commercial matters.

Credit providers, servicers, and collection agencies fall within TCPA's scope. Even internal communications from creditors to existing customers may trigger TCPA requirements if they use prohibited technologies or lack proper consent.

Who enforces TCPA requirements?

The FCC has primary regulatory authority over TCPA and can impose forfeitures and cease-and-desist orders. State attorneys general can bring civil actions on behalf of state residents. The Federal Trade Commission administers the National Do Not Call Registry.

TCPA provides a private right of action allowing consumers to sue directly for violations. Consumers can file individual lawsuits or class actions in federal or state court. This private enforcement mechanism has generated substantial litigation, with plaintiffs' attorneys actively pursuing TCPA cases.

II. Key Requirements

Prior express consent requirements

TCPA prohibits autodialed calls, prerecorded calls, or text messages to wireless numbers without prior express consent. For telemarketing calls, prior express written consent is required. Consent must be given by the individual being contacted.

Prior express written consent requires a written agreement clearly disclosing that the consumer agrees to receive autodialed or prerecorded calls or texts. The agreement must include the telephone number to which calls may be placed. Consumers can revoke consent at any time through any reasonable means.

National Do Not Call Registry

The National Do Not Call Registry allows consumers to opt out of telemarketing calls. Telemarketers must scrub their calling lists against the registry at least every 31 days.

Certain calls are exempt, including calls from organizations with established business relationships. However, debt collection calls are subject to registry restrictions if they contain telemarketing messages.

Calling time restrictions

TCPA prohibits telemarketing calls to residential numbers before 8:00 AM or after 9:00 PM at the recipient's local time. Businesses must determine and respect the called party's time zone.

Credit providers should implement systems to track time zones and prevent calls outside permitted windows, particularly when operating across multiple time zones.

Identification and opt-out requirements

All prerecorded or artificial voice messages must identify the calling entity at the beginning and provide the entity's telephone number or address. Text messages must clearly identify the sender and provide opt-out instructions. Standard language like "Reply STOP to unsubscribe" satisfies this requirement.

Special rules for debt collection

Debt collection calls using autodialers or prerecorded messages to wireless numbers require prior express consent. A 2015 amendment created an exception for government-backed debt, but the Supreme Court struck this down in 2020. The TRACED Act limits debt collectors to three prerecorded or autodialed calls per debt to residential landlines within 30 days.

III. Compliance and Common Violations

Common TCPA violations

{emphasize}

Creditors create TCPA liability through these operational oversights:

• Calling without proper consent when using autodialers or prerecorded messages to reach wireless numbers, particularly when relying on dated consent or assuming consent based solely on prior business relationships.
• Ignoring do-not-call requests by continuing to call consumers after they've requested removal from calling lists, or failing to implement and honor internal do-not-call preferences.
• Calling outside permitted hours, either by neglecting to track consumer time zones or using systems that don't automatically block calls outside 8:00 AM to 9:00 PM windows.
• Contacting reassigned numbers where the current subscriber never provided consent, creating liability even when the original number holder had consented to calls.
• Failing to provide opt-out mechanisms in prerecorded messages or text communications, or making opt-out processes unreasonably difficult or ineffective.

{emphasize}

Penalties and enforcement consequences

TCPA violations carry statutory damages of $500 per violation, trebling to $1,500 for knowing or willful violations. With no cap on damages, violations accumulate rapidly. A single campaign violating TCPA across thousands of calls can generate millions in potential liability.

Class action lawsuits pose particular risk. Plaintiffs' attorneys actively seek TCPA violations, and notable settlements have exceeded $100 million. Regulatory enforcement adds another layer, with the FCC imposing forfeitures and state attorneys general bringing civil actions.

How lenders can ensure compliance

Successful TCPA compliance requires careful attention to consent, calling practices, and documentation. Credit providers must obtain and document proper consent before using autodialers or prerecorded messages to contact wireless numbers.

Maintain accurate internal do-not-call lists and honor opt-out requests immediately. Implement systems to scrub calling lists against the National Do Not Call Registry regularly. Technology solutions can enforce time restrictions, apply do-not-call preferences, and track consent and calling history.

IV. Bottom Line

TCPA compliance protects consumers from unwanted calls while helping credit providers avoid severe penalties and litigation. With statutory damages per violation and active plaintiff attorneys, even minor compliance gaps create substantial risk.

{emphasize}

LoanPro's platform includes features specifically designed to support TCPA compliance. 

• Do not disturb windows prevent calls and messages during prohibited hours, automatically respecting time zones and consumer preferences. 
• Opt-in tools automatically track and update SMS enrollment status, maintaining records of consumer consent and opt-out requests. 
• Safe-harbor templates for SMS messages ensure communications include required identification and opt-out language. 
• Agent walkthroughs guide call center staff through compliant communications, providing scripts personalized to borrower and account data while staying aligned with TCPA requirements and your internal policies.

{emphasize}

If you're looking to strengthen your TCPA compliance program and reduce litigation risk, reach out to us. We'd love to discuss your communication strategy and what's worked well for our clients.