A week has passed since the collections and credit world was turned upside down by the Federal Communications Commission when it issued a Declaratory Ruling and Order regarding the Telephone Consumer Protection Act.  

With the dust settling and the industry exhaling, the proverbial “what’s next?” leads boardroom agendas and is a central point on conference calls.  

If you haven’t unplugged your automatic telephone dialing system (ATDS) or predictive dialer, please do so now. The FCC gave the broadest definition possible to an ATDS by defining capacity to include not only the current capacity of an ATDS system but also any future or potential capacity. 

So while your current telephone system doesn’t store or produce telephone numbers to be called, if it could be configured to do that in the future, alas you’re now the proud owner of an ATDS.

In last week's ruling, the FCC tried to backtrack and couch its broad definition of capacity to include only the “theoretical potential that the equipment could be modified to satisfy the ‘autodialer’ definition." This "safe harbor" is far from comforting and will likely result in an interesting round of discovery should your company be sued.

If you absolutely can't stand the thought of your ATDS collecting dust, you need to be absolutely certain that the telephone numbers you’re dialing are for the correct consumer -especially if you’re calling a cell phone. 

You also only get one bite at the apple, whether you speak to a live person or not. If you call the wrong person on a cell phone, every call after the first call is a violation even if you spoke to the person numerous times and they never advised you of your mistake.  

So while your company is manually dialing and texting consumers or your retail customers, now is the time to perform an audit of your agreements to ensure you have secured prior express consent.

The FCC was quite clear that consent must come from the consumer, meaning they provided a telephone number or cell phone number on some document, web page or verbally. 

Some of your agreements may have advised that by providing a telephone number or mobile number the consumer has given consent to be called. Err on the side of caution. Given the theme of the FCC’s ruling, control of the communication must rest with the consumer. Maybe now is a good time to reconnect with that consumer to secure new consent.  

Furthermore, don’t get cute with the revocation of consent. The FCC made it abundantly clear that revocation can happen at any time and by any reasonable means. Don’t tell the consumer that they can only revoke on the second Monday of the month or to call a specific number. 

At a minimum give the consumer several options to revoke. It may be necessary to advise the consumer in every communication going forward that they have a right to revoke. The FCC considers opportunities to “opt-out” an important disclosure when communicating with consumers. 

In the limited exceptions for prior express consent granted to banks and health providers, those industries were required to disclose to consumers of their right to opt-out. For the remaining industries that use an ATDS, the FCC found no such disclosure requirement. However, much like the recommendation to renew consent in every communication, so should a disclosure be made regarding a consumer’s unfettered right to revoke. For those who want to side with the ambiguity and not disclose, I am sure the issue will be resolved in class action shortly. 

Your processes and procedures need to be reviewed thoughtfully and strategically. Despite the FCC’s self-serving accolades, the ruling fell short of the clarity the collections and credit industry sought. 

While you can argue that the FCC’s analysis was flawed, their conclusions on many issues were crystal clear. Don’t quickly throw together a new agreement that’s more confusing than what you already had in place. Don’t just address one aspect of the ruling in a new agreement while potentially overlooking another. Look at your agreements organically and holistically and from the viewpoint of the consumer. 

Remember that regulators lack perspective. While there were a good amount of consumer complaints lodged to the FCC and the Federal Trade Commission about robocalls, they were slight compared to the 326 million people with cell phones - as of 2012.  There are plenty of consumers who do in fact want to be contacted on their cell phones. Make sure you provide them with the appropriate opportunities to do so but on their terms.

Joann Needleman is leader of Clark Hill’s Consumer Financial Services Regulatory & Compliance group. She  has successfully defended creditors agains claims brought under the Fair Debt Collection Practices Act and Fair Credit Reporting Act as well as state statutes. She is the current president of the Board of Directors of the National Association of Retail Collection Attorneys and serves on the Consumer Financial Protection Bureau's Consumer Advisory Board.

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