On January 26, 2015, a judge for the Central District of California entered an order preliminarily approving a $2.7 million settlement to resolve a Telephone Consumer Protection Act ("TCPA") class action lawsuit against USCB, Inc. ("USCB"). The Order comes after the Court initially rejected the parties' first settlement agreement. Following further briefing and oral argument conducted on January 8, 2015, the Court has preliminarily approved the settlement of the TCPA class action. A final fairness hearing has been scheduled for May 21, 2015.
Allegations that USCB Violated the TCPA
The named plaintiff alleged that USCB, a debt collection agency, repeatedly called her mobile phone to collect on someone else's debt through use of an autodialer and an artificial/prerecorded voice. Following significant discovery, which included depositions and numerous third party subpoenas to determine the size of the prospective class (i.e., how many wrong numbers were called), the parties arrived at the terms of a settlement.
Terms of USCB TCPA Class Action Settlement
USCB will pay a total of $2.7 million to settle the TCPA claims. At least $1.472 million of the settlement fund will be available for distribution to the estimated 12,000 class members. In addition, USCB will partner with Neustar, a company that provides "scrubbing" services. Neustar will be used to filter USCB's data list for purposes of removing cell phone numbers that do not match up with its client information. According to USCB, with overhead and associated costs, this process will amount to an extra $315,000.
Know Your Rights
In its Order granting preliminary approval of the settlement, the Court noted plaintiff's allegation that "USCB acquired their [customer] telephone numbers through 'skip tracing' or other indirect method, rather than from the individual consumer." Such practices certainly expose businesses to TCPA-related litigation risk. To avoid such potential liability, it is advisable that businesses consult with experienced counsel to review their debt collection and telemarketing practices.
If you are interested in this topic or if you need to review your telemarketing or debt collection practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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