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From Antitrust Law Daily, August 23, 2013

TCPA permits consumers to revoke consent to be contacted at any time

By Tobias J. Gillett, J.D., LL.M.

Under the Telephone Consumer Protection Act (TCPA), a consumer may revoke her prior express consent to be contacted on her cellular phone by an automated dialing system, and can revoke that consent at any time, the U.S. Court of Appeals in Philadelphia has ruled (Gager v. Dell Financial Services, LLC, August 22, 2013, Roth, J.). The court also found that the TCPA does not permit debt collection calls made to cellular phones, and that a consumer’s contractual relationship with a creditor did not exempt the creditor from the TCPA.

In December 2007, Ashley Gager applied for a line of credit from Dell Financial Services, LLC to purchase computer equipment. She provided a telephone number in her application, but did not indicate that it was for a cellular telephone or that Dell should not call the number with an automated dialing system. Gager defaulted on the debt, and Dell began calling the number using an automated dialing system. Gager sent Dell a letter asking Dell to stop calling the number, but again did not indicate that it was a cellular number. Dell continued placing calls to the number with an automated system.

Gager filed suit, alleging that Dell’s conduct violated the TCPA, but the district court dismissed her complaint. Gager appealed.

The appellate court stated that the case presented the issues “(1) whether the TCPA allows a consumer to revoke her “prior express consent” to be contacted via an automated telephone dialing system on her cellular phone and (2) if a revocation right exists, whether there is a temporal limitation on that right.” The court noted that no appellate courts had yet addressed either issue.

Revocation of consent. The court concluded that the TCPA permitted a consumer to revoke his or her prior express consent, rejecting Dell’s argument that the absence of an express consent provision in the TCPA, coupled with the presence of such provisions in other federal consumer protection statutes, demonstrated that Congress did not intend to provide a revocation right. The court explained that its decision was “consistent with the basic common law principle that consent is revocable,” and concluded that “Congress did not intend to depart from the common law understanding of consent because the statute does not treat the term differently from its common law usage.” Moreover, its decision was “in line with the purpose of the TCPA,” according to the court. “The TCPA is a remedial statute that was passed to protect consumers from unwanted telephone calls,” and as “a remedial statute, it should be construed to benefit consumers.”

Finally, the court found that providing a right to revoke consent was also consistent with the Federal Communications Commission’s declaratory ruling in In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Soundbite Communications, Inc., 27 FCC Rcd. 15391 (Nov. 26, 2012), in which the FCC held that a one-time text message confirming a consumer’s opt-out request that revoked consent to receive text messages was permissible under the TCPA. The FCC noted “that consumer consent to receive . . . messages is not unlimited,” and stated that a consumer could “fully revoke” prior express consent by transmitting an opt-out message. The court found the FCC’s analysis to be “clear: consumers may revoke their prior express consent to be contacted by autodialing systems.”

Temporal limitation. The court also concluded that a consumer’s right to revoke consent was not temporally limited. In In the Matter of Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991, 7 FCC Rcd. 8752 (Oct. 16, 1992), the FCC had stated that autodialed calls were lawful as long as the recipient had granted “permission to be called at the number which they have given, absent instructions to the contrary.” Dell contended that the FCC’s language meant “that instructions to the contrary may only be given at the time the consumer consents to receive autodialed calls.”

The court disagreed, noting that the legislative history “supports our view that express consent is revocable at any time because the TCPA was intended to protect consumer rights, not restrict them.” Moreover, as in its previous discussion, the TCPA’s status as a remedial statute favored reading the statute to benefit consumers. The “common law understanding “ of consent also supported the court’s decision, because “an individual should be allowed to withdraw consent at any time if she no longer wishes to continue with a particular course of action.” Finally, the FCC’s Soundbite decision “cut strongly against Dell’s position because the consumer’s revocation of consent was effective well after the consumer consented to be contacted by an autodialing system.”

Debt collection calls. The court also rejected Dell’s argument that Gager did not state a claim under the TCPA because Dell made the calls for debt collection purposes. Although the TCPA contained provisions allowing certain types of autodialed calls, including those for debt collection purposes, those exemptions only applied to calls made to landlines, not cellular phones, according to the court. The provision under which Gager brought her claim prohibited the use of “any automatic telephone dialing system” to call “any . . . cellular telephone service.”

Equity. Finally, the court rejected Dell’s arguments that Gager should not be allowed to revoke her consent under the principles of equity and contract law. Although “the level of contact that a debtor will consent to may be relevant to the negotiation of a line of credit, the ability to use an autodialing system to contact a debtor is plainly not an essential term to a credit agreement.” Moreover, Gager’s contractual relationship with Dell did not exempt Dell from the TCPA, and she retained the right to revoke her consent. The court also rejected Dell’s contention that the court’s decision could make contacting a borrower regarding credit “difficult, if not impossible,” because Dell would only be prohibited from using an automated dialing system, and could still make live, person-to-person calls.

The case is No. 12-2823.

Attorneys: Cary L. Flitter (Flitter Lorenz, P.C.) for Ashley Gager. Anthony L. Gallia (Duane Morris LLP) for Dell Financial Services, LLC.

Companies: Dell Financial Services, LLC

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