The U.S. Court of Appeals for the Fourth Circuit has issued an unpublished opinion in Lynn v. Monarch Recovery Management Inc. that supports a ruling that the agency violated the Telephone Consumer Protection Act.

Monarch Recovery allegedly placed 37 calls to the consumer’s number. The calls were made using an automated telephone dialing system as defined by the TCPA. The consumer’s number was originally a residential line but, before Monarch Recovery's calls, had been converted to a Voice over Internet Protocol service.

The consumer was charged a monthly rate by the VoIP service provider, for the incoming calls and for the transmission of caller ID information on incoming calls. The consumer did not give the collection agency permission to call the number and further called the agency twice to advise that he received per-minute charges for phone calls. Monarch Recovery called the consumer three more times after that notice.

The appeal centered on whether a "call charged" provision of the TCPA applies when the call is exempt from TCPA liability pursuant to the TCPA's "residential line" provision.  

The lawsuit argued that Monarch Recovery violated the TCPA provision that prohibits any person from placing an autodialed call to "any telephone number assigned to … any service for which the called party is charged for the call."

Monarch Recovery argued that the calls were properly exempted from TCPA liability because they were made to a residential telephone line for a commercial purpose without any solicitation.

The appellate court agreed with the consumer. Based upon its review of legislative intent, the court rejected Monarch Recovery's argument that it was exempt from the call charged provision of the TCPA. The court said that Congress' purpose in enacting the TCPA was that it was not meant to be used by debt collectors in an effort to limit their liability.

The decision seemingly extends the TCPA's prohibition on calling cell phones used an automated system to any telephone number where the called party is charged for the call. But the appellate court did not explain what types of calls may be considered to fit within the "call charged" provision as residential service (or other services) arguably do not come free.

As an unpublished opinion, the decision does not have binding precedent in the Fourth Circuit. But collection agencies risk potential lawsuits for TCPA violations every time they dial a telephone number because it is impossible to know how a called party pays for their phone service and/or what kind of service the called party uses.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.