Joint Financial Trades TCPA Statement for the Record

 

Statement for the Record

On behalf of the

American Bankers Association Consumer Bankers Association

Credit Union National Association Financial Services Roundtable

Independent Community Bankers of America National Association of Federal Credit Unions

before the

Committee on Commerce, Science, and Transportation

 

of the

 

United States Senate

 

May 18, 2016

Statement for the Record

On behalf of the

American Bankers Association, Consumer Bankers Association, Credit Union National Association, Financial Services Roundtable, Independent Community Bankers of America, and National Association of Federal Credit Unions

before the

Committee on Commerce, Science, and Transportation United States Senate

May 18, 2016

 

 

Chairman Thune, Senator Nelson, and members of the Committee, the American Bankers Association (ABA)1, Consumer Bankers Association (CBA)2, Credit Union National Association (CUNA)3, Financial Services Roundtable4, Independent Consumer Bankers of America (ICBA)5, and National Association of Federal Credit Unions6 (collectively, the Associations) appreciate the opportunity to submit a statement for the record for this hearing on the effects of the Telephone Consumer Protection Act (TCPA). As you are aware, that statute prohibits, with limited exceptions, telephone calls to residential lines and calls and text messages to mobile phones using an automatic telephone dialing system (autodialer) unless the caller has the prior express consent of the called party.

 

The Associations commend the Committee for holding this hearing. Reform of the TCPA is urgently needed. Enacted 25 years ago to limit aggressive telemarketing and secondarily, to protect the nascent wireless phone industry, the TCPA was designed to provide consumers with a right to pursue an individual claim against an unlawful caller in small claims court and without the need for an attorney. Since then, the TCPA has been interpreted by the Federal Communications Commission (Commission or FCC) to apply, potentially, to any dialing technology more advanced than a rotary phone and to impose liability for calls to numbers for which consent has been obtained but the number has been reassigned unbeknownst to the caller. With statutory damages of up to $1,500 per call, any call that is purported to have been made using an autodialer and that is inadvertently made to a wireless number without documented consent can result in a class action lawsuit with a damage claim in the millions, if not billions, of dollars. While the total dollar value of these class action lawsuits can be staggering, and frequently generate millions in fees for the attorneys that pursue the cases, these lawsuits rarely accomplish a substantial recovery for consumers.  As the attached chart of recent TCPA settlements from one financial institution demonstrates, the median amount awarded to consumers would have been $7.70 if all class members submitted a claim.

 

This risk of draconian liability has led financial institutions to limit—and, in certain instances, to eliminate—many pro-consumer, non-telemarketing communications, including calls to combat fraud and identity theft, provide notice of data security breaches, and help consumers manage their accounts and avoid late fees and delinquent accounts. The balance Congress struck between protecting consumers and allowing routine and important communications between a business and its customers to occur has been lost—and, all too often, the very consumers Congress sought to protect are harmed.

 

In our statement, we make three points:

  • The TCPA, as interpreted by the Commission, has a detrimental impact on consumers by effectively preventing financial institutions from sending important, and often time-sensitive, messages to consumers.
  • The TCPA is out of touch with current technology and consumer communication preferences and expectations and prevents financial institutions from effectively serving consumers who wish to communicate by cell phone.
  • Congress should reform the TCPA by imposing a damages cap and mandating the establishment of a database of reassigned numbers.

 

(Continue Reading)