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July 21, 2015 Practice Points

Businesses Contacting Cell-Phone Users Face New Risks under TCPA

One of the most significant elements of a recent FCC order deals with the reassignment of cell-phone numbers, which has become a vexatious problem for creditors and other businesses.

By Robert A. Scott

Businesses that contact customers on their cell phones face new risks under the Telephone Consumer Protection Act (TCPA) in the wake of a recent declaratory ruling from the Federal Communications Commission (FCC).

One of the most significant elements of the FCC's July 10, 2015, order deals with the reassignment of cell-phone numbers, which has become a vexatious problem for creditors and other businesses.

As a general rule, the TCPA prohibits the use of an automatic telephone dialing system to call a cellular phone without the prior express consent of the "called party." 47 U.S.C. § 227(b)(1)(A)(iii). According to the FCC, the called party means the "customary user" of the cell-phone line.

But determining the identity of the "customary user" is not always easy. Cell-phone numbers are routinely re-assigned after customers close their accounts or switch to another carrier. Further, there is no reliable way for businesses to promptly find out that a customer's cell-phone number has been re-assigned. Therefore, a company may continue to call a number that is no longer being used by their customer, exposing the caller to liability under the TCPA.

The FCC's order acknowledged this problem but offered little in terms of concrete solutions. The agency rejected the argument that callers should be permitted to rely on consent of the prior user of the cell-phone number until they receive actual knowledge that the number has been reassigned.

Instead, the order provides a one-call "safe harbor" exemption that allows a caller to make a single call to a number after it has been reassigned. However, this exemption applies whether the consumer answers the call or not. Therefore, it is unlikely to provide protection to callers in many instances.

The order suggested certain steps that businesses can take to attempt to discover that cell-phone numbers have been reassigned, including periodically sending a request to consumers to update their contact information, implementing processes for allowing customer-service agents to record new phone numbers when receiving calls from customers, and keeping track of calls resulting in notices that the number has been disconnected.

But the agency acknowledged that these steps may not be sufficient in all instances: "Even where the caller is taking ongoing steps reasonably designed to discover reassignments and to cease calls, we recognize that these steps may not solve the problem in its entirety."

This language provides cold comfort to companies using automated-dialing equipment to contact customers on their cell phones. Businesses should develop and implement procedures to minimize calls to re-assigned numbers consistent with the FCC's order. Failure to do so may have severe consequences. The TCPA provides for statutory damages in the amount of $500 per call for negligent violations and $1,500 per call for willful violations.

Robert A. Scott is with Ballard Spahr LLP in Baltimore, Maryland.

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