Collection agencies likely will take a keen interest in a ruling issued last week by a federal judge stating that collection efforts using an autodialer warrants a trial.
In a federal lawsuit, Roslyn Griffith and Jerret Cain claimed that subprime auto lender Consumer Portfolio Services (CPS) contacted their cell phones with unauthorized calls and text messages. The Telephone Consumer Protection Act (TCPA) prohibits companies from making such contacts through an "automatic telephone dialing system."
U.S. District Judge John Grady rejected the defendant's motion for summary judgment, noting that the Federal Communications Commission has found that "a predictive dialer falls within the meaning and statutory definition of 'automatic telephone dialing equipment' and the intent of Congress." The judge did not agree with the company’s argument that a stricter interpretation of the TCPA would show that the dialer software itself had to store phone numbers to be illegal, according to Courthouse News Service.
CPS had argued that its predictive-dialing technology does not run afoul of the TCPA. The company claimed that its dialer did not store or produce numbers using a “random or sequential number generator,” which is how the TCPA is worded. CPS officials specially stated that the company's dialer cannot perform these "now obsolete" functions.
Because CPS is not a collection agency, it does not have to adhere to the Fair Debt Collection Practices Act. Still, the eventual trial will be followed closely by the collection industry as agencies make decisions about whether to use autodialers to contact cell phones.
“CPS’s interpretation of FCC orders, which it supports by quoting portions of those orders out of context, is a transparent attempt to win through litigation a battle that other companies lost before the FCC [Federal Communications Commission],” Grady wrote in his opinion.
The FCC defined "automatic telephone dialing systems" as "equipment that utilizes lists or databases of known, non-random telephone numbers," according to the ruling.
"That is precisely how CPS's equipment operates," Grady wrote. "The dialer automatically dials numbers and routes answered calls to available collectors. Even assuming that CPS's equipment can only function in this way, and cannot generate and dial random or sequential numbers, it is still an 'automatic telephone dialing system.'"
By regulating equipment instead of dialers, "the FCC plainly intended to prevent companies from circumventing the statute," according to the 11-page decision. Consumer Portfolio Services had argued for a stricter interpretation of the statute that would impose liability only if the dialer actually stored telephone numbers or predictive dialing software. Grady also balked at the argument that the act regulates telemarketers only, not debt collectors.
