Court agrees, invalidates FCC's definition of 'autodialer'
In a win for the credit union industry, the U.S. Court of Appeals for the D.C. Circuit on Friday found the Federal Communications Commission's (FCC) definition of "autodialer" to be arbitrary and capricious, calling the Commission's interpretation of the term "utterly unreasonable." NAFCU has repeatedly told the FCC that its definition has led to financial institutions ceasing important communications with members about their accounts over fear of inadvertently violating the rule.
"It cannot be the case that every uninvited communication from a smartphone infringes federal law, and that nearly every American is a [Telephone Consumer Protection Act]-violator-in-waiting, if not a violator-in-fact," the ruling stated.
In another win, the court also rejected the FCC's interpretation of when a caller violates the Telephone Consumer Protection Act (TCPA) by calling a reassigned number. "We set aside the Commission's interpretation on the ground that the one-call safe harbor is arbitrary and capricious," the court said.
This lawsuit, ACA International v. FCC, stems from a declaratory ruling and order the FCC issued in July 2015 that provides limited robocall exemptions under the TCPA for financial institutions making free autodialed calls to consumers.
Upon the court's decision, FCC Chairman Ajit Pai said he was pleased with the ruling. "Instead of sweeping into a regulatory dragnet the hundreds of millions of American consumers who place calls or send text messages from smartphones, the FCC should be targeting bad actors who bombard Americans with unlawful robocalls," he said. "We will continue to pursue consumer-friendly policies on this issue, from reducing robocalls to reassigned numbers to call authentication to blocking illegal robocalls."
NAFCU entered into the suit in September 2015 and oral arguments were heard in the case in October 2016.
NAFCU will update its resource page for credit unions with more information on this case and NAFCU's efforts.
Compliance Monitor - July 2018
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