United States: TCPA Litigation Still Hot, Poses Significant Litigation Risk

Last Updated: December 4 2017
Article by Alan D. Wingfield and Brooke Conkle

Financial institutions face significant risk for outbound calls to customers under the Telephone Consumer Protection Act ("TCPA"). The TCPA is a strict liability statute and includes a minimum $500 in statutory damages for each call that violates the statute. Litigation under this statute, including class actions, has exploded in recent years. Millions of dollars have been paid out by financial institutions, and there is no end in sight.

The Basic Elements of a TCPA Claim

The TCPA makes it unlawful to place a call or send a text message to a cellular telephone without consent using any automatic telephone dialing system ("ATDS") or an artificial or prerecorded voice. For calls to landlines, the TCPA prohibits the initiation of a call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party unless the call is initiated for emergency purposes.

The TCPA provides for $500 in statutory damages for each violation of the TCPA. If a defendant is deemed to have violated the TCPA willfully or knowingly, then the plaintiff may be entitled to an award of treble damages of up to $1,500 per call. There is no cap on damages, and class action lawsuits can be brought seeking statutory damages for large groups of individuals. Good faith and absence of negligence are not valid defenses. Errant calls trigger liability even if the calling party acted reasonably.

TCPA class actions have been a major tool of the plaintiffs' bar. The wave of TCPA litigation has resulted in large, multimillion-dollar class action settlements, including settlements of $75 million, $34 million, and $32 million paid by financial institutions. One recent class action jury verdict awarded $61 million against DISH Network for telemarketing calls that allegedly violated the TCPA.

Key Definitions

Key terms used in the TCPA define the calls that are at risk:

  • Automatic Telephone Dialing System ("ATDS") : "Equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers."
  • Prior Express Consent (needed for non-telemarketing calls and texts): "Persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary."
  • Prior Express Written Consent (needed for telemarketing calls and texts): "An agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an [ATDS]."
  • Revocation of Consent: A consumer can revoke consent by any "reasonable" means.

The Federal Communications Commission has given broad interpretation to the TCPA which has fueled claims. This, in turn, has prompted business groups to file several lawsuits challenging the FCC's broad interpretation. Oral arguments in the appeal were held on October 19, 2016 in the United States Court of Appeals for the District of Columbia Circuit, and a decision is expected at any time.

Common TCPA Litigation Issues Facing Financial Institutions

The issue of consent has generated numerous TCPA lawsuits. The burden rests on the defendant to prove that it had adequate consent to call the plaintiff using an ATDS. Whether the defendant has adequate business records to prove consent, whether consent can be obtained and conveyed via intermediaries, and whether someone other than the plaintiff can provide prior express consent are typical issues presented in TCPA cases.

Going hand-in-hand with consent is the issue of revocation of consent. Whether a consumer has effectively revoked his or her consent to be called is another fact-specific issue that dominates TCPA litigation. Courts must determine whether a consumer used reasonable means to revoke his or her consent, and whether those means clearly expressed the called party's desire not to receive further calls. Many lawsuits are brought based on the oral, uncorroborated testimony of a consumer claiming a revocation.

Defendants may face potential liability directly or under theories of vicarious liability, which often arise when a company outsources its marketing activity to a third party. Several courts have held that such companies, on whose behalf a call or text is made, may be held liable for a telemarketer's TCPA violations if the telemarketer acted as an agent of the company under federal common law agency principles. The determination of such liability typically rests upon a fact-specific inquiry that looks to the specific nature of the relationship between the company and the third party responsible for initiating the call. In a notable example, DISH Network was hit with $280 million in penalties in an action brought by federal and state regulators largely premised on calls made by vendors.

Protecting Your Financial Institution from Exposure

To minimize TCPA exposure, financial institutions need to ensure that both they and their vendors have proper compliance strategies in place. Banks must not only analyze their own technology but also must take necessary steps to ensure that their vendors are complying with the requirements of the TCPA.

In light of the potential damages available under the TCPA, insurance is often critical for those financial institutions facing TCPA litigation. As such, banks must carefully analyze their insurance policies to determine whether TCPA claims fall within the scope of coverage.

Arbitration clauses can protect your financial institution from some (albeit not all types of) costly TCPA litigation – but only if a court chooses to enforce it. Following the strong federal policy favoring arbitration, several courts have compelled individual arbitration in TCPA putative class actions. In those cases, the company-defendants included a broad arbitration clause in their service agreements, and courts found that the plaintiffs' TCPA claims fell within the scope of those agreements. The decisions serve as a useful reminder to financial institutions to consider including arbitration clauses in their consumer contracts and to use such clauses to their advantage when facing TCPA litigation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Alan D. Wingfield
In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions