Top TCPA Lawsuits of 2014 and How Companies Could Have Avoided Them

Top TCPA Lawsuits of 2014 and How Companies Could Have Avoided Them

2014 has been an iconic year for class action lawsuits involving Telephone Consumer Protection Act (TCPA) violations. There is no sign that 2015 will see anything but an explosion of another streak of TCPA violations that will drain companies to settle.

The TCPA was enacted in 1991 to protect consumers from annoying solicitors and telemarketers from calling persistently. The TCPA states that companies are not allowed to call the general public unless they have expressed their consent to receive calls of non-emergency  purposes. The TCPA regulations also established the following restrictions:

  • Solicitors are not allowed to call before 8am or after 9pm local time
  • Solicitors are not allowed to call numbers that are listed in the DNC registry, and must be honored up to 5 years
  • Solicitors are not allowed to use automated or pre-recorded messages to call residences
  • Solicitors cannot make any call where the recipients would be charged
  • Telemarketing or unsolicited calls should provide an option for the recipient to opt-out of the calls
  • Telemarketers must provide toll-free call back numbers so that the recipients could register themselves in the DNC registry

With a minimum of $500 per unintentional violation and $1500 per wilful violation can climb up to multi-million dollar settlements. TCPA allegations were very active in 2014 as sophisticated plaintiffs pounced at unwary companies for TCPA violations. Here are the top 5 cases of TCPA violations in the year 2014

Lillian Franklin v. Wells Fargo

Wells Fargo, an American multinational banking and financial services was alleged of violating the TCPA in August 2014 by Lillian Franklin. The lawsuit was filed in the U.S District Court for the Southern District of California claiming that the bank repeatedly called the lead plaintiff on her cell phone to collect her credit card debt. According to the TCPA, companies are prohibited to use “auto-dialer” that calls customers with a pre-recorded message in addition to contacting individuals without their express consent. Wells Fargo was alleged to violate the TCPA making automated calls to debtors without their consent, where the calls featured a pre-recorded message. Wells Fargo settled the lawsuit for $14.5 million to avoid extensive monetary damage if it were proved that an autodialer was involved to generate calls and/or if the TCPA violations were termed to be ‘wilful’. Under the $14.5 mn settlement, $3mn will cover notice and administration charges and $3.6 mn will be paid to the plaintiffs’ attorneys, and the rest will be divided among the class members. This was a wise decision made by Wells FArgo because if they continued to battle the lawsuit in court it would have found itself paying a much higher penalty, in addition to the attorney fees.

Paul Story v. Chargers Football Company LLC

On December 2014, lead plaintiff, Paul Story filed a class action lawsuit against the San Diego Chargers in California state court for the alleged violations of the TCPA. The lawsuit states that Paul Story received multiple calls even after ignoring the first one from a phone number associated with websites operated by Chargers Football Company, LLC. Lawsuit alleges that the Chargers placed thousands of such calls to the people of the general public for advertising and marketing purposes, in addition to placing such calls without the express content of the recipients. Paul Story claims that he has not provided any signed authorization to the Football company permitting them to contact him for non-emergency purposes. While it is still unknown whether the lawsuit will be approved by a federal judge, Story’s attorneys are quite confident that the judge will rule in their favor based on the previous cases on the TCPA violations. If the defendants are found guilty, the Chargers Football company will be obligated to pay $1500 as well as treble damages, for every wilful TCPA violations to all class members (well over 40 individuals).

Robert Zani vs Rite Aid Corp.

The lead plaintiff, Robert Zani, filed a lawsuit under the TCPA against Rite Aid Corp., alleging the company for making unauthorized calls using auto dialing systems in a non-emergency situation to his cell phone. Zani alleged that the company had placed numerous pre-recorded, unauthorized calls to the mobile phones to a nationwide class of customers with an intention to market and sell its products and services including flu shots. Zani who is a former customer of Rite Aid  complained about this  to an employee of the company but no action was taken.He also alleged that the  company did not provide him and the other customers  with the option of “opting-out” of receiving any phone calls on their cellular phones from the company.

Brian Trenz vs Toyota/Sirius

A class action lawsuit was filed against Sirius XM Holdings, Inc. (“Sirius”) and Toyota Motor Sales USA Inc. (“Toyota”) in the United States District Court for the Southern District of California on 8th January, 2015. The plaintiff, a customer of Toyota, purchased a n automobile from the company in October 2014. The plaintiff alleges that Sirius violated the TCPA rules and placed unsolicited calls to his cellular phones using an automatic dialing system. Sirius, a company selling satellite radio, was alleged for attempting to sell the plaintiff a satellite radio subscription by making more than 30 telemarketing calls without the customer’s consent. During one of the calls which the plaintiff answered, he was told by the telemarketer that Sirius obtained his number from the Toyota dealership from where he purchased his  automobile. However, Toyota didn’t disclose anything regarding sharing its customers information to third-parties such as Sirius.

Plaintiff vs Kaiser Foundation Health Plan, Inc.

The plaintiff accused Kaiser Foundation Health Plan Inc.(an insurance company) of making unauthorized pre-recorded calls, under the TCPA,  to his mobile phone in an attempt to re-sell its insurance coverage. However, the United States District Court for the Southern District of California recently granted preliminary approval of a nationwide class action settlement in this case. According to which the company will pay  $5,350,000.00 into a settlement fund for the benefit of class members, plus attorneys’ fees and an incentive award to the named plaintiff/class representative. In the next phase of the settlement, a claims administrator would  provide a notice to all members of the TCPA settlement class nationwide.  After the notice and claims period, the Court will hold a final approval hearing and consider whether the settlement was fundamentally fair, reasonable, adequate and in the best interests of the settlement class.

To avoid lawsuits as such, companies should equip themselves with an intelligent predictive dialer integrated with the companies marketing campaigns that filters out numbers listed in the DNC registry. And to procure prior consent from consumers, companies can send email, voice, or text messages to the consumers to earn express consent from them. A smart predictive dialer integrated with such functionalities can place calls to only the consumers that have opted-in for telemarketing and advertising calls, eliminating the chances of facing TCPA allegations.