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By enacting the Telephone Consumer Protection Act (TCPA) in 1991, Congress demonstrated its intent to protect consumers, businesses, and telecommunications systems from unwanted and intrusive calls. The linchpin of the TCPA is the prior consent requirement. Congress specifically intended to safeguard Americans from abusive calls by permitting autodialed calls to cell phones, hospital emergency lines,  and other protected lines only with the prior express consent of the receiving party (except in cases of emergency). The elegance of this construct, which requires consent for calls to cell phones and other protected numbers (including hospital, emergency, and poison control lines), is that it gives the people being called control over their phones.

“Facebook hopes to render the TCPA’s restriction on autodialing meaningless by convincing a majority of the Justices that it applies only to equipment that is no longer in use,” said Margot Saunders, senior counsel at the National Consumer Law Center. “A ruling in Facebook’s favor would open Americans up to a deluge of robocalls that they cannot stop.”

The Second, Sixth, and Ninth Circuits have issued common-sense decisions finding that the TCPA’s definition of an autodialer includes systems that store numbers on a list and dial them. Facebook and its supporters argue that the definition only includes dialers that dial random or sequentially generated numbers. But unless the caller is calling from a list, the caller has no way of ensuring that it is only calling people who have consented—as Congress intended.

The rules regarding consent are relevant only if the caller has a list of stored numbers for parties that have consented to autodialed calls.

”The facts are clear — if these calls can only legally be made with the recipients’ prior agreement, they can only be made to those people’s numbers, not to random numbers,” said Susan Grant, CFA’s Director of  Consumer Protection and Privacy. “Facebook’s argument is not based on the statute or the clear intent of Congress and, if it is  accepted, we’ll be flooded  with unwanted and unstoppable autodialed calls.”

The calling industry and the trade groups lobbying on their behalf support Facebook’s position, because they want to make cheap robocalls, billions of them, without worrying about consent. If the Court adopts the definition pressed by Facebook, autodialed calls and texts to cell phones and other protected lines will be virtually uncontrollable. It would eliminate protections against unwanted calls for all non-telemarketing texts to all cell phones. Business cell phones would be entirely unprotected from all automated texts (even those involving telemarketing), and from all automated calls that do not include a prerecorded voice. The primary safeguard against the constant invasion of privacy and threat to public safety—consent—would fall.

“For years, robocalls have invaded consumers’ privacy and subjected us all to incessant harassment,” said George Slover, senior policy counsel at Consumer Reports. “Now, callers are trying to gut the Telephone Consumer Protection Act, a key privacy statute that has helped rein in these unwanted robocalls. We urge the Supreme Court to uphold the 9th Circuit’s decision, so that consumers have some control over the robocalls they receive.”

Oral arguments in Facebook v. Duguid are scheduled for December 8.

For more information, including tips for consumers to reduce robocalls, visit NCLC’s Robocalls & Telemarketing page.

Contact: Susan Grant, sgrant@consumerfed.org

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For example, there’s the story in the survey report about a disabled man in Massachusetts who wanted to buy a scooter for $1,999 to help him get around. The salesperson told him financing was available and arranged to have someone from the finance company call him. The woman who called said she was emailing the finance paperwork and told him to remain on the phone while it worked its way to his inbox. She then instructed him to skip to the last page and initial some boxes, which he did, and promised to email the completed contract to him. When he received it, he saw that there would be 57 monthly payments of $92 plus a $262 buyout at the end, making the total cost nearly $6,000. Alarmed, he called the finance company to ask what the interest rate was on the loan and learned, to his surprise, that that there was no interest because it was a lease, not a loan. He also noticed that his signature appeared on the contract, though he never signed it.

There’s also the story from San Francisco about people receiving pre-recorded calls in Mandarin that claimed to be “official communications” from the Chinese embassy and directed them to press a number to connect with an embassy employee. The person at that extension (an imposter, not a real embassy employee) said there was a message waiting for them and offered to open it while they stayed on the line. Of course they agreed. The message was that they were wanted for questioning about a major fraud investigation involving their families back in China. While still on the line, they were then connected to the “detective in charge of the investigation” (another imposter), who explained that they could get out if the situation by paying for “bail.” Sadly, people emptied their savings accounts, mortgaged their homes, or borrowed heavily to wire thousands of dollars overseas to the scammers.

Keeping consumers on the phone in this manner is a form of control. It prevents them from having time to think about what they’re doing, read what they’re agreeing to, or check with anyone else. Furthermore, giving consumers a series of instructions to follow is a way of “grooming” them to do what the caller ultimately wants them to do – agree to the deal, provide their personal information, or send money.

When the Massachusetts man jumped to the end of the document to initial the boxes while the woman from the finance company waited on the phone, he didn’t have a chance to look at the terms of the agreement. And the victims of the Chinese embassy scam were so intimidated by the end of the call that they didn’t question whether they should wire the money – something they probably wouldn’t have done if they had checked the credentials of the people who spoke to them.

In its survey response, the consumer agency in Cuyahoga County, Ohio reported an even more disturbing trend: some scammers are instructing consumers to stay on the phone while they go to the bank to withdraw the money or to stores to buy gift cards in order to make the payments. This essentially enables the crooks to hold their victims captive and tell them how to respond if a teller or cashier becomes suspicious and starts asking questions. It also prevents the consumers from checking the validity of the claims or demands the callers are making.

Here’s advice from CFA about how to protect yourself from these abusive control tactics:

• Take charge of the conversation. It’s up to you to decide whether to speak with someone who calls you, especially if the call is unexpected. If you don’t want to talk to someone, say so and hang up!
• Take a time out. If the call is about something you’re interested in or you think might be valid, ask the person to give you the information and tell them you’ll call back. If the caller won’t give you the time to look at something or verify what you’re being told, hang up!
• Read the contract before you commit. If someone sends you a contract by email or text, don’t initial anything or click on “I agree” until you’ve read the whole thing carefully. If you’re not sure what something means or the agreement doesn’t match what you were told, ask questions and don’t seal the deal unless you’re satisfied with the answers.
• Resist scare tactics. Many phone scams involve callers falsely claiming to be from law enforcement agencies. This is deliberately intended to strike terror in your heart and make you easier to control. Tell the caller you’ll get back to them and hang up! Then find the number of the agency the person claims to be from by looking online or through directory assistance, and call directly to ask if what you’ve been told is true. Don’t use the number the caller gives you or that shows on Caller ID, since it may just lead right back to a scammer.
• Get advice. When something seems like it might not be quite right, ask for advice from your state or local consumer agency, your lawyer, your accountant, or someone else you trust.
• Take care how you pay. Government agencies don’t tell people to pay money they owe by wiring it or buying gift cards. Neither do debt collectors, utilities, and other legitimate businesses. If you’re asked for payment by one of these methods, hang up! And if you realize you’ve been tricked into doing it, contact the money wiring service or the gift card issuer immediately to ask if anything can be done to stop the payment.

For more tips from our consumer complaint survey report about how to avoid fraud and other problems, click here.

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CG Docket No. 20-93

EB Docket No. 20-22

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The post Consumer Groups Support Allowing Certain Robocalls from Financial Institutions During COVID-19 Crisis appeared first on Consumer Federation of America.

Our nation’s comprehensive COVID-19 response must include a strong paid sick leave policy and protecting consumers by ensuring affordable access to communications services, preventing utility shutoffs, mortgage foreclosures, student loan defaults, negative credit reporting effects, overpriced insurance, and making sure that airline and hotel customers’ rights are protected in any financial bailout of these industries.

The Consumer Federation of America has identified critical consumer protection issues that must be addressed as part of a comprehensive response to this crisis. Many of these items are focused on protecting those hardest hit by the economic fallout. Doing so is not just a matter of economic justice; it is the best way to stabilize the economy.

CFA and it’s over 250 national, state and local organizations are committed to working with policymakers at all levels to implement a “Comprehensive Consumer Agenda to Address the COVID-19 Crisis”.  For the details behind the following agenda, please see our LINK March 20, 2020 letter to the President and Congress.

A Comprehensive Consumer Agenda to Address COVID-19

1. Create a comprehensive national paid sick leave policy to reduce the spread of the disease. Lack of paid sick leave encourages tens of millions of workers to continue working when they are sick, which can nullify the critically important benefits of social distancing.

2. Protect those hardest hit from economic hardship by:

• Providing forbearance to economically distressed mortgage borrowers. Any homeowner experiencing economic hardship because of the virus must have access to 180 days of forbearance on mortgage payments.
• Halting evictions and foreclosures. There must be a 180 day moratorium on evictions of tenants experiencing economic hardship because of the virus, with support provided to property owners who suffer rental income losses.
• Canceling student loan payments for the duration of the crisis. It is not enough to pause monthly payments, the government must make tax free payments on holder’s behalf so millions of Americans can continue to make progress reducing their student debt as the economy struggles.
• Suspending debt collection. Debt collection activities, including legal proceedings, garnishments, repossessions, and debt selling, must be prohibited during the state of emergency.
• Curtailing high-cost lending schemes: A rate cap of 36% must apply to high-cost credit, such as payday loans, refund anticipation loans, and car title pawns to ensure that vulnerable consumers aren’t trapped by overpriced debt.
• Placing a moratorium on negative credit reporting. To protect consumers’ credit records during the pandemic, there must be, at least, a four month moratorium on negative credit reporting.
• Maintaining consumers’ access to affordable communications services. As remote communications become critically important, service providers must abandon pricing practices that maximize revenues, suspend overcharges for “excess” data usage, terminate service cut-offs, and increase network availability to the public.
• Requiring big data platforms to promote the public interest. Big data platforms must remove misleading information. Their big microphones must promote the public interest, not the corporate bottom lines. Non-commercial pandemic information from public health, safety and governmental entities must be given a prime location on all screens.
• Preventing misleading advertising and price-gouging. Advertisers, and the media carrying ads, must ensure that claims related to the coronavirus are completely accurate. Online marketplaces must reject products and services making misleading claims or that offer basic necessities at unfairly inflated prices.

3. Ensure that consumers’ interests are protected as industries seek federal financial support by:

• Mandating fairness in the skies. Airlines must waive cancelation and change fees for all consumers during the federal state of emergency. As a condition of an airline bailout, Congress must require price transparency, make future fees for cancelations, changing flights, and checking bags proportionate to actual costs, lift state preemption, and provide consumers with private rights of action.
• Accommodate hotel customers. As organizations and individuals heed requests to limit non-essential travel and cancel events, some hotels have continued to charge consumers and organizations. As a condition of a hotel bailout, Congress must require hotels to honor requests for room and event cancelations without penalty and to refund deposits until the federal state of emergency is suspended or travel limit recommendations are lifted. Going forward they must provide full price transparency on charges and extra fees.
• Reduce auto insurance premiums to reflect reduced driving. Insurers should be required to offer discounts to people driving less due to COVID-19.  Miles driven, a key factor in claims costs, will drop dramatically as workers are laid off, switch to telework, or self-isolate. This should be a consumer benefit, not an insurer windfall. See CFA’s letter to Insurance Commissioners.

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“We wrote this brief with Verizon to emphasize to the Court how the federal Telephone Consumer Protection Act is absolutely essential to limiting unwanted robocalls to our cell phones,” said Margot Saunders, Senior Counsel to the National Consumer Law Center. “Without the TCPA, robocallers would be unleashed, and families, businesses, and public safety would be at risk.”

“In contrast to legitimate calls made by companies to their customers, the TCPA prohibition on robocalls to cellular subscribers without consent constitutes a critical protective measure that, if removed, would risk exponentially increasing the already large number of unwanted robocalls and rendering legitimate calls ineffective. Telephone users in the United States receive billions of autodialed calls monthly, including both calls that are in compliance with the TCPA, and calls that violate it. Many of the callers who make the calls do not just flout the TCPA but also hide from detection by changing the “calling party number” transmitted with their calls so that the calls appear to be coming from someone else. These autodialed calls often go beyond nuisance marketing to furthering dangerous scams such as impersonating personnel from the Internal Revenue Service or the Social Security Administration, thus imperiling the financial well-being of hundreds of millions of recipients. In addition to being a major consumer protection problem, the flood of illegal robocalls harms legitimate companies that use autodialers for calls their customers affirmatively want to receive, but that increasingly find that their contact rates are falling because of consumers’ wavering trust in incoming voice calls.

“In other words, absent the consent requirement for calls to cellular telephones, cellular customer would have no protections from any robocalls except for those few telemarketing calls that violate the do-not-call lists. As is the case with residential customers today, the TCPA would place no limit on numerous categories of calls that—while wanted if consented to—many consumers consider to be intrusive absent consent, such as: charitable calls; informational calls; telephone survey calls; political calls; and phishing calls that do not seek to sell anything, but seek only to further the collection of identity-stealing information from the called parties.

“The average Verizon wireline residential customer receives more than twice the number of spam robocalls than the average wireless customer,” according to Chris Oatway, Verizon Associate General Counsel for consumer matters. “That’s because wireless customers enjoy greater protections under the TCPA. Eliminating those heightened protections for wireless customers would undercut our efforts to protect our customers from robocalls, which is why Verizon appreciates the opportunity to partner with the consumer protection community on this issue. We thank the National Consumer Law Center for its continued leadership in the fight against robocalls.

“Because of the steady drumbeat of unwanted automated calls to cell phones, and the rising—and sometimes dangerous—nature of the scams made through these calls, the nation’s telephone system has already suffered a loss of trust. The TCPA’s prohibition against making automated calls to cell phones is an essential tool to combat unwanted robocalls that would threaten to overwhelm American consumers and the nation’s telephone system if the limits imposed on these calls by the TCPA were removed.

“…although Amici do not, in this brief, take any position on the TCPA exemption at issue in this case, the fact that the TCPA does not prohibit every single non-consented, non-emergency call to cellular phones, and also allows the FCC to promulgate certain limited exemptions, does not on its own undermine this compelling interest. Not only are these exceptions limited to narrow circumstances, but there is no evidence that they have contributed materially to the explosion of robocalls or undermined the TCPA’s purpose. These minimal exceptions to the TCPA’s general protections do not in any way justify a ruling from this Court that would undermine Congress’ ability to adopt the TCPA’s general prohibition on non-consented-to calls to cellular phones.”

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Comments to the Federal Communications Commission

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Consumer Group Comments CG Docket 17-59, WC Docket 17-97

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Robocalls Joint Letter to House

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