The Ninth Circuit Amends TCPA Opinion in Meyer v. Portfolio Recovery Associates and Provides Relief to Debt Collection Industry
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The U.S. Court of Appeals for the Ninth Circuit has amended a recent decision in which it suggested that prior express consent under the Telephone Consumer Protection Act (TCPA) for telephone calls made to mobile phones for the purpose of debt collection could exist only if consumers gave their cell phone numbers to creditors at the time of the transaction giving rise to the debt.
In Meyer v. Portfolio Recovery Associates, plaintiff Jesse Meyer, on behalf of himself and a putative class, alleged that debt collection service Portfolio Recovery Associates (PRA) violated the TCPA by using an automated dialer to call debtors' cell phones without obtaining prior express consent. Meyer moved for a preliminary injunction and provisional class certification. The district court granted the motion, and PRA appealed. The Ninth Circuit affirmed (read our alert on the Ninth Circuit's October 12, 2012, opinion here).
In its opinion, the court expressed a strict interpretation of a Federal Communications Commission (FCC) opinion regarding the meaning of "prior express consent" in the context of debt collection:
Pursuant to the FCC ruling [In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, Request of ACA Int'l for Clarification and Declaratory Ruling, 23 FCC Rcd. 559, 565 (Jan. 4, 2008)], prior express consent is deemed granted only if the wireless telephone number was provided by the consumer to the creditor, and only if it was provided at the time of the transaction that resulted in the debt at issue. Id. at 564-65. Thus, consumers who provided their cellular telephone numbers to creditors after the time of the original transaction are not deemed to have consented to be contacted at those numbers for purposes of the TCPA.
These two sentences in the Ninth Circuit's opinion resulted in much discussion regarding their significance, with some legal commentators noting that the court's language was highly ambiguous and troublesome, if not potentially frightening, and flew in the face of business reality. The Ninth Circuit's opinion also raised questions about best practices in the debt collection industry, including whether creditors and debt collectors could use cell phone numbers that consumers voluntarily provide creditors and debt collectors after the date of the initial transaction but during the course of the debtor relationship. After all, transactions such as home mortgage loans can continue for years, if not decades, and consumer contact information, especially phone numbers, is likely to change over the course of the parties' relationship.
Since the court did not directly address the issue, and the court's restrictive interpretation of the FCC order was not central to the court's determination, we concluded that the Ninth Circuit's opinion left room for creditors and debt collectors to use later-provided cell phone numbers from debtors, provided they obtain subsequent express authorization from debtors to contact them at these new numbers for purposes of debt collection. For cell phone numbers later provided by debtors, however, we cautioned that creditors and debt collectors must make clear that they may contact debtors at those numbers for purposes of debt collection and that they must obtain subsequent express consent to do so in writing.
In late October, PRA filed a petition requesting a rehearing before both the original three-judge panel and the entire Ninth Circuit, arguing in part that the panel's statement that consent cannot be provided after the original transaction contradicted the FCC's 2008 ruling. The American Financial Services Association, together with the California Financial Services Association and the American Bankers Association, filed amicus curiae briefs echoing this same concern.
On December 28, 2012, the Ninth Circuit denied the petition for panel rehearing and rehearing en banc, but amended the opinion to replace the two sentences above with new language:
Pursuant to the FCC ruling, prior express consent is consent to call a particular telephone number in connection with a particular debt that is given before the call in question is placed. Id. at 564-65. PRA did not show a single instance where express consent was given before the call was placed. Id. at 565.
The court's clarification now makes clear that in the Ninth Circuit, prior express consent to call cell phone numbers in connection with a debt may be obtained from debtors at any time, so long as that consent is obtained before the call is placed. Creditors and debt collectors still should not use autodialed or prerecorded messages for numbers obtained solely through skip-tracing (the process of developing new consumer telephone, address, job, or asset information or verifying the accuracy of that information) and should use only a live operator to manually dial those numbers. Prior express consent for TCPA purposes must come from the debtor.
Prior express consent also is limited to the specific phone numbers the debtor voluntarily provides with respect to a particular debt. Debt collectors may not use mobile numbers voluntarily provided in connection with one debt to fulfill TCPA consent requirements for another debt, even if the debts involve the same creditor (e.g., debtor has two delinquent credit card accounts with the same bank but has voluntarily provided a mobile number with respect to only one account). Creditors or debt collectors must obtain prior express consent for each specific debt if they want to utilize autodialed and prerecorded messages.
Last, creditors and debt collectors should always provide clear notice to consumers that they may be contacted at the telephone numbers they provide in connection with their debts. This consent should be obtained in writing if possible, especially with respect to mobile numbers.
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