Congress passed the TCPA (codified at 47 U.S.C. § 227) in 1991, which amended the Communications Act of 1934, to protect consumers from telemarketers using automated telephone dialing systems (“autodialers”) or artificial or prerecorded voice messages. Section 227(b)(1)(A) prohibits the use of an autodialer to call any wireless number absent an emergency purpose or the “prior express consent of the called party.” Non-emergency telemarketing calls to a residential line using a prerecorded voice are also prohibited without the consumer’s consent unless the call is exempted by rule or order of the Commission under paragraph (2)(B). Section 227(b)(2)(B) of the TCPA authorizes the Federal Communications Commission (FCC) to create exemptions for calls “that are not made for a commercial purpose” or “do not include the transmission of any unsolicited advertisement” to residential lines. Section 227(b)(2)(C) provides the FCC with exemption authority on autodialed or prerecorded calls to wireless numbers so long as the calls are free to the consumer and may be subject to conditions prescribed by the FCC to protect consumers’ privacy rights.
In its 2015 Omnibus Declaratory Ruling and Order, the FCC implemented the Bipartisan Budget Act of 2015, which amended the TCPA to exempt from the prior express consent requirement certain autodialed or prerecorded calls to wireless numbers or residential lines if the calls are “made solely to collect a debt owed to or guaranteed by the United States.” The FCC has interpreted this phrase to mean that calls may be made to collect a debt after the loan has become delinquent and to collect debts that are at imminent risk of delinquency, but only within 30 days before the default date.
The 2015 Order, however, has proven to be particularly problematic in a number of ways. In fact, until recently, it was the subject of ongoing litigation in the D.C. Circuit Court of Appeals – ACA International v. FCC. The case challenged the validity of the 2015 Order’s interpretations of what type of equipment qualifies as an “autodialer,” whether a TCPA violation occurs when a consenting party's phone number has been reassigned, and how a consenting party may revoke consent. On March 16, 2018, the D.C. Circuit issued its opinion in the case and vacated the FCC's interpretation with respect to the definition of “autodialer” and the one-call safe harbor for reassigned numbers. In September 2018, the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit) provided a new ATDS definition by removing the need for a random or sequential number generation. In June 2019, the Ninth Circuit ruled in a related case that the government-backed debt collection exception of the ATDS definition violated the First Amendment and was severable from the rest of the statute, but did not rule the entire TCPA unconstitutional. On January 10, the U.S. Supreme Court granted a petition to hear the arguments challenging the constitutionality of the TCPA’s government-backed debt collection exception. In February 2020, the U.S. Court of Appeals for the Seventh Circuit found that devices that only store numbers to be dialed are not covered by the TCPA. NAFCU continues to advocate for clarity regarding the definition of an “autodialer.”