How to Successfully Navigate TCPA Cell Phone Consent and Consent Revocation

man holding smart phone with question marks above it
By Chris Cote

4 minutes

In an era when collections and lawsuits filings are on the rise, credit unions should consider reviewing their processes.

This article was originally posted on SWBC’s LenderHub blog and is adapted with permission.

Ah, the Telephone Consumer Protection Act ...that ole’ chestnut. There hasn’t been much change to this law, which went into effect back in 1991. Clarifications have been issued—as recently as 2013; however, the core ruling hasn’t shifted since inception regarding contacting a debtor using an autodialer or pre-recorded message. 

If you don’t know what TCPA is and how it impacts the financial services industry, you can read one of this post that covers TCPA basics. However, in this article, we’ll dive a little deeper into how a financial institution can navigate the particulars of obtaining express consent from borrowers, specifically for the purposes of contacting them on a mobile device.

Obtaining consent is essential for your financial institution and for your collections team. Securing consent to contact a borrower allows your institution and collections representatives (in-house or outsourced) to contact them on their mobile devices during the various stages of the collections process.

What Does TCPA Say?

TCPA mandates that for a collections rep to call a customer on his mobile device using an autodialer or pre-recorded message, the consumer must have given “prior express consent.” There are exceptions to the rules, including calling a consumer manually—which can be done at any time—and non-commercial calls, such as calls intended to prevent fraudulent activities or data breach notifications.

Why Is Mobile Phone Consent Important?

While clear in certain areas when it comes to telemarketing and advertising calls, TCPA is ambiguous when it comes to collections-related calls. Some courts, such as the Ninth Circuit Court, have made connections between TCPA and cases targeting a financial institution’s TCPA practices. Other courts around the country have made their own determinations. In many cases, smaller courts have ruled in favor of the financial industry. However, it’s tough to predict how a specific court will react to a case, as each circuit court ruling only defines the act for that particular jurisdiction, not universally. Therefore, many compliance experts will err on the side of caution and maintain a conservative approach to TCPA compliance.

Between January and November 2018, 2,315 TCPA-related cases have been filed across the country. That’s an average of 210 cases per month! Many cases have been filed because the plaintiff has misunderstood how the law extends to third-party vendors.

The questions financial institutions and collection partners should be asking are:

  1. What controls are in place to obtain cell phone contact consent?
  2. What processes do you have when someone revokes consent?

At the end of the day, consumers have the right to determine how they wish to be contacted and have rights to revoke consent-to-be-contacted on their mobile devices—provided it is done in a reasonable manner, and consistent with the revocation guidelines provided by the creditor or loan agreement, when applicable.

Obtaining Contact Consent

Perhaps the most effective way to obtain cell phone contact consent from a borrower is to add a permission disclosure on the credit application, clearly stating the terms of the loan agreement relative to the methods the creditor can/will use to contact the borrower. When potential borrowers sign and submit their applications, that action will serve as the “written agreement between consumer and seller,” allowing the financial institution, and by extension its collection partners, to contact the borrower.

Consent Revoked Considerations

When consumer decide to revoke their call consent, which they have a right to do at any time, the financial institution must honor the request—as long as the consumer used a reasonable method to initiate it. While the phrase “reasonable method” is open for some interpretation, it’s best to take a conservative approach and honor the request to remove the number from the call list.

When a consumer revokes his call consent, what’s your process to address that? If you’re working with an outsourced collections provider and the caller revokes consent to your third-party collector, how is that information communicated back to your financial institution? Establishing a written process internally and with your collections partner will help ensure these accounts are properly flagged, and consumers who have revoked consent to receive autodialer calls to their mobile devices are not contacted accidentally through your system.

Consumers are exercising their right to revoke consent more frequently, and the number of TCPA-related cases continues to rise. Financial institutions should consider reviewing their processes for obtaining cell phone call consent and how they handle a revoked consent across the institution and its partners.cues icon

Chris Cote has been with CUES Supplier member SWBC, San Antonio, Texas, since 2011 and has more than 12 years of experience in the financial services industry. As the compliance officer for the SWBC Financial Institution Group, he works closely with unit management to ensure operations remain compliant with state and federal regulations and guidelines. He is also responsible for the quality assurance team that monitors calls for multiple SWBC divisions.

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