The Telephone Consumer Protection Act (“TCPA”) prohibits, among others, the use of autodialers and prerecorded messages to residential telephone numbers without the prior express permission of, or an established business relationship with, the called party.  Over the last several years, courts have relied on Watson v. NCO Group, Inc. (pdf), 462 F.Supp.2d 641 (E.D. Pa. 2006), which held collection calls made to the wrong person were covered by the TCPA, and only debt collection calls made to the debtor were exempt from TCPA claims.  According to the Watson court, a party attempting debt collection could face a lawsuit (often a class action) whenever its records were incorrect, the real debtor’s phone number was reassigned to another person, the creditor obtained bad skip trace information, among other scenarios.  Recent cases indicate this is starting to change.

In Meadows v. Franklin Collection Service, Inc.(pdf), 2010 WL 2605048 (N.D. Ala. 2010) a lawsuit was brought by a individual who had received numerous debt collection calls to her phone number from a collection agency.  The plaintiff owed no money, but separate debts were owed by her daughter, who used the plaintiff’s telephone number for a time, and by the family who formerly had plaintiff’s telephone number.  Plaintiff sued and both parties sought summary judgment on the TCPA claim.

The court denied plaintiff’s motion on its TCPA claim and granted defendant’s motion.  The court reasoned that a debtor has an established business relationship with his/her lender and that:

[A]ll debt collection circumstances involve a prior or existing business relationship.  In addition, we tentatively concluded that debt collection calls are exempt from the TCPA’s prohibitions against prerecorded message calls because they are commercial calls which do not convey an unsolicited advertisement and do not adversely affect residential subscriber rights.  Id. at *6, quoting from Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report & Order, 7 FCC Rcd 8752, at ¶36 (1992). 

In late February 2011, a federal judge rejected the claim that a third-party debt collector violated the TCPA by making “repeated annoying and otherwise harassing telephone calls” to the plaintiff’s home telephone for the purpose of collecting a debt on behalf of a creditor of a debtor named “Hazel Meyers.”  After being told that no such person lived at that residence, the debt collector became belligerent and started making daily calls.  Some of the calls contained prerecorded messages.  A lawsuit was commenced alleging violations of both the Fair Debt Collection Practices Act (“FDCPA”) and the TCPA.  The defendant moved for judgment on the pleadings for the TCPA claim.  The court agreed, holding that the Federal Communications Commission had determined the telephone calls at issue were “subject to an express exemption from the TCPA’s prohibitions, as set forth in the regulations promulgated and interpreted by the Federal Communications Commission.”  Santino v. NCO Financial Systems, Inc.(pdf), No. 09-CV-982-JTC, slip op. (W.D.N.Y. Feb. 23, 2011).

The Santino court specifically rejected the TCPA interpretation adopted in the Watson case where collection calls made to the wrong person were covered by the TCPA.  These two new cases, Meadows and Santino, provide authority for a creditor’s exemption from liability for calling the wrong person on a collection attempt.  However, these cases do not excuse making autodialed calls with or without a prerecorded message to wireless phone numbers.  Those prohibitions are still applicable under the TCPA.  Those latter calls can be made only with prior express permission from the wireless customer.