The D.C. Circuit Court’s ruling in favor of ACA International is one of the many big decisions that came out this year. Collector magazine counts down the most influential rulings for the accounts receivable management industry.
12/18/2018 13:30
In 2018, numerous significant court cases affecting the accounts receivable management industry made it through the system.
ACA International supported participants in several of these cases through the association’s Industry Advancement Fund.
Here are a few examples of the most noteworthy cases in 2018 as reported by Tim Dressen, communications consultant and former editor of Collector magazine. ACA International’s Vice President and Senior Counsel Karen Scheibe Eliason and Compliance Analysts Andrew Pavlik and Laura Dadd also contributed to this article.
The Telephone Consumer Protection Act
ACA International v. Federal Communications Commission, et. al.
In the pivotal ACA Int’l v. FCC case, the D.C. Circuit Court of Appeals focused on the key issues ACA presented in its challenge to the 2015 Telephone Consumer Protection Act Declaratory Ruling and Order, including the definition of an autodialer, the meaning of a “called party” in the reassigned number context along with the one-free-call exemption, and the any-reasonable-manner approach to revocation of consent.
On its first two challenges to the broad reach and draconian penalties of the TCPA that hurt responsible businesses, the second-highest court in the land delivered ACA the win. It did so by completely setting aside the FCC’s unreasonably expansive interpretation of what equipment constitutes an ATDS and rejecting the FCC’s entire approach to reassigned numbers and the one-call safe harbor.
On the topic of consent revocation, the federal appellate court sided with the FCC by upholding the portion of the 2015 TCPA Order that allows called parties to revoke consent at any time and through any reasonable means.
Although the D.C. Circuit Court left many things unresolved, the court’s decision did offer some guidance on these issues, setting the stage for the FCC to write new rules to address those portions of the 2015 TCPA order the court set aside.
The court indicated that the FCC should provide workable rules in this area for legitimate businesses that need to communicate with customers.
ACA remains hopeful that the commission will create clear and reasonable rules that will help businesses understand how they can comply with the TCPA without fearing predatory class-action litigation.
ACA’s Position
Until the FCC provides a rule, debt collectors should review their dialing strategies and make any changes necessary to comply with the D.C. Circuit Court’s ruling. ACA members may want to: look into relevant case law to determine how the courts are currently interpreting the TCPA’s definition of an autodialer; obtain permission to contact a consumer’s cellphone with an autodialer before using any dialing system; consider manually dialing any numbers that may have been reassigned; and document revocation of consent quickly, removing those numbers from any call lists.
The Fair Debt Collection Practices Act
Lavallee v. Med-1 Solutions, LLC
In Lavallee, a consumer accused a collection agency of failing to comply with the Fair Debt Collection Practices Act’s requirement that a debt collector “send the consumer a written notice containing” statutorily required information about the debt, even though the agency transmitted a proper validation notice to the consumer by secure email attachment.
The consumer claimed she did not receive the emails and, therefore, the agency failed to provide her with a timely validation notice containing the mandatory disclosures required under the FDCPA. The agency’s records confirmed that the consumer did not open the email attachment. The agency argued that it had met its obligation by sending the email attachment, regardless of whether it was opened.
Granting the consumer’s motion for summary judgment, the Southern District of Indiana court said the agency did not meet its obligations because it easily could have determined that the consumer never accessed the attachments. The court also found that documents transmitted as email attachments cannot be deemed as reliable as U.S. mail.
With the case now under appeal, the Seventh Circuit Court of Appeals has received amicus briefs from both ACA and the Bureau of Consumer Financial Protection raising several questions related to the use of electronic delivery of validation notices. ACA asked the Seventh Circuit to reverse the district court’s decision and establish that email can serve as written notice in the same way as postal mail.
The BCFP argued that the collection agency could not use email to comply with the FDCPA’s written validation notice requirement if it did not satisfy the requirements of the E-SIGN Act, including making certain disclosures to a consumer about the use of electronic records and obtaining the consumer’s prior consent to such use.
ACA’s Position
Until the Seventh Circuit addresses the arguments at issue in Lavallee, or the bureau issues rules clarifying the requirements for alternative forms of communication, including email messages and text messages, debt collectors should err on the side of caution by sending the consumer’s initial validation notice via traditional first-class U.S. mail. Additionally, debt collectors who wish to communicate with consumers by email should obtain consent to do so, and such communications should also comply with the E-SIGN Act.
Read more on the Top 10 Cases of 2018 in the December issue of Collector magazine.
If you are interested in sharing articles and analysis on legal cases, industry laws and regulations or other relevant topics for possible publication with ACA International, email our Communications Department at [email protected].
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