The Telephone Consumer Protection Act

The Telephone Consumer Protection Act

The Telephone Consumer Protection Act (TCPA) was passed in 1991 by the United States in order to protect consumers from solicitations. This act limits “automatic dialing systems, artificial or prerecorded voice messages, SMS text messages, and fax machines.” Although this is not a new act, new guidelines have been provided and it is important for your credit union to know these to avoid legal litigation. In July, the FCC added new guidelines to this act, such as a new definition to autodialers, and exceptions for pro-consumer messages regarding time-sensitive financial information.

The TCPA has a new expanded definition of autodialers. This broadens the scope of what is considered an autodialer to be, as: “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 number.” The FCC has exceptions for pro-consumer messages regarding time-sensitive financial matters. The commission granted financial services permissions to provide consumers with “beneficial, time-sensitive information.”

The FCC approved a  petition that was submitted by ABA, which “sought an exemption for financial-related calls or messages concerning:
(1) fraud and identity theft;
(2) data security breaches of consumers’ personal information;
(3) steps taken to prevent or remedy the harm of identity theft or a data breach; and
(4) money transfers.

Financial institutions will have to “work with a wireless carrier and third-party service providers to ensure that recipients are not charged for these messages.” The FCC also defines when financial institutions (and, presumably, agents working on behalf of financial institutions) can initiate voice calls or text messages without obtaining prior express consent.

They are allowed to do this so long as:

• The communications are sent only to the wireless telephone number that the customer provided to the financial institution;
• The communications state the name and contact information of the financial institution (these disclosures must be made at the beginning of a voice call);
• The communications do not contain any telemarketing, cross-marketing, solicitation, debt collection, or advertising content;
• The purpose of the communication is to alert the customer of (1) fraud and identity theft; (2) data security breaches of consumers’ personal information; (3) steps taken to prevent or remedy the harm of identity theft or a data breach; or (4) money transfers;
• The communications are short (one minute or less for voice calls and 160 characters or fewer for text messages);
• Financial institutions cannot send more than three communications (voice calls or text messages) per event over a three-day period;
• Financial institutions must provide customers with an “easy” means to opt-out of receiving the communication (i.e., an interactive voice or key press-activated opt-out mechanism for voice calls); and
• Financial institutions must immediately honor opt-out requests.

(information taken from abovethelaw.com)

In regard to marketing-related calls, credit unions must comply with the following rules before contacting a member:

• Members must provide prior express written consent to receive marketing calls, texts, and faxes.
• The written consent must clearly disclose that the member is giving consent to receiving the calls, text, or fax and that they are not required to agree to this in order to receive a loan or service from the credit union.
• Credit unions cannot use “prior express consent in making telemarketing calls to members.” A credit union must receive new consent from its members as of 2013.
• Members have the right to revoke their consent “at any reasonable way and time.”

To read the full rule please visit https://transition.fcc.gov/cgb/policy/TCPA-Rules.pdf or if you have any questions about how we can help your credit union, please email clientservices@oaktreebiz.com

(note: this is an older blog entry and has been edited since originally posted.)