Group of professionals discuss finance

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Banking and Finance Law Daily, August 22, 2013

PRIVACY—3rd Cir.: Telephone Consumer Protection Act permits later withdrawal of consent to autodialed calls

By Richard A. Roth, J.D.

A consumer who consented to receiving automated telephone calls on her cell phone when she applied for a line of credit could later revoke that consent, the U.S. Court of Appeals for the Third Circuit has decided. The Telephone Consumer Protection Act (TCPA) gives consumers the right to revoke consent and does not restrict when that revocation can happen, the court said (Gager v. Dell Financial Services, LLC, Aug. 22, 2013, Roth, Circuit Judge).

The facts set out by the consumer indicated that she included her cell phone number on an application for a line of credit to buy computer equipment. The application form asked for her home telephone number, but the consumer listed her cell phone, without identifying it as such and without saying that the creditor could not use an automated dialing system to call her.

When the consumer later defaulted on the loan, the creditor began calling her at the number she provided, using an automated dialing system and leaving prerecorded messages on her voice mail. Eventually, the consumer wrote the creditor to tell it to stop calling the listed number. The calls did not end, and the consumer sued under the TCPA.

Trial court dismissal. The consumer claimed that under the TCPA the creditor had an obligation to stop the automated calls because she had withdrawn her consent. The trial court, however, dismissed the suit on three bases:

  • the TCPA did not allow a consumer to revoke her previously-given consent;
  • the consumer’s instructions not to use an automated dialing system had to be given at the same time she provided her telephone number, not at a later time; and
  • the TCPA did not apply to debt collection telephone calls.

The consumer appealed the dismissal, and the appellate court reversed the trial court’s ruling.

Right to revoke consent. To begin with, the TCPA prohibits automated telephone calls to a consumer’s cell phone number without the consumer’s prior express consent, the court noted (47 U.S.C. §227(b)). The statute says nothing about whether the consumer’s consent, once given, can be revoked.

The creditor asserted, and the trial court agreed, that the TCPA’s silence meant that consent could never be revoked. The appellate court disagreed.

Under the common law, consent is revocable, the court first said. Consent is given voluntarily and lasts only as long as the consumer is willing. There was nothing in the TCPA that indicated congress intended anything else, the court said.

Moreover, the TCPA was enacted to protect consumers from unwanted telephone calls, according to the court. It should be interpreted in a way that was consistent with that goal, and allowing a consumer to withdraw consent was consistent.

A Federal Communications Commission ruling issued in the context of text messages implied that the FCC, which was charged with adopting regulations to implement the TCPA, agreed that consent could be revoked, the court also said.

Time to revoke consent. The appellate court then decided that the consumer was not required to refuse consent when she furnished her telephone number; rather, she could revoke her consent later. The legislative history of the TCPA did not argue on favor of the rule proposed by the creditor, the court said, and the common law understanding of consent did not support it, either.

Also, as noted above, the TCPA was a consumer protection law that should be construed in a way that benefitted consumers, according to the court.

Debt collection calls. The court also rejected the creditor’s contention that the TCPA and the FCC’s rules did not apply to debt collection calls because they arose from an existing business relationship. The rules did permit autodialed debt collection calls, the court said, but only to land-line telephones. Autodialed calls to cell phones were prohibited, with only two exceptions—emergency calls and calls made with prior express consent.

The case is No. 12-2823.

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

Companies: Dell Financial Services, LLC

LitigationEnforcement: DebtCollection Privacy DelawareNews NewJerseyNews PennsylvaniaNews VirginIslandsNews

Banking and Finance Law Daily

Introducing Wolters Kluwer Banking and Finance Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.

A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.