ACA International White Paper Shows How Outdated TCPA Only Serves to Enrich Plaintiff Attorneys
6/6/2016 12:01:00 AM
Amid increasing calls for reform of the 1991 Telephone Consumer Protection Act, research shows that the law is not protecting consumers.
Twenty-five years since the enactment of the Telephone Consumer Protection Act, plaintiff's attorneys and federal regulators have manipulated the original intent of the law, transforming it from a statute that protects valuable consumer communication with businesses into a tool for frivolous lawsuits. In its latest white paper The Imperative to Modernize the TCPA: Why an Outdated Law Hurts Consumers and Encourages Abusive Lawsuits, ACA International, the association of credit and collection professionals, outlines why the TCPA must be modernized to help consumers and allow legitimate businesses to communicate with these consumers effectively.
“To function as an effective consumer-protection measure, the TCPA must be reformed to more accurately reflect the current state of communication technology in addition to the ways both businesses and consumersuse those technologies,” writes ACA's Director of Research Josh Adams, PhD, in the white paper.
According to the white paper, the number of TCPA-related lawsuits skyrocketed 948 percent from 2010-2015. Damages in a TCPA lawsuit are set at $500 per unintentional violation and $1,500 per intentional violation.These damages add up quickly in class action lawsuits and are part of the reason why TCPA litigation has increased so dramatically in the last five years.
However, the outcome of these class action lawsuits generally benefits plaintiff's attorneys more than the consumers themselves. In 2014, the average attorneys' fees for a TCPA class action settlement were $2.4 million, while the individual consumer received just $4.12.
Another reason for the proliferation of unnecessary TCPA lawsuits is that the statute has been increasingly applied across a diverse range of industries beyond telemarketing, including necessary informational calls from legitimate debt collection companies to consumers. Debt collection professionals, as well as legitimate businesses across a wide scope of industries, must be able to send vital, non-solicitous communications to consumers in the way they want to be contacted.
“This problem has been exacerbated by the FederalCommunications Commission, the agency responsible for implementing the TCPA,whose broad interpretation of the statute has failed to provide a pathway tocompliance for businesses using modern communications,” according to the whitepaper.
“It is no wonder that there are so many businesses that rely on effective communication with their customers coming to together to call for TCPA reform,” said ACA CEO Patrick J. Morris. “This includes credit agencies, universities, retailers, banks, and utility companies. They all want relieffrom abuses of an outdated law.”
To solve these problems with the TCPA, ACA advocates in the white paper that the law must be clarified to allow for the use of modern communication technology to reach consumers in the modern marketplace. Specifically, the FCC must maintain the balance Congress contemplated in enacting the TCPA to protect consumer privacy interests without impeding legitimate business operations.
For more information contact ACA Public Affairs