Bankers Group Asks FCC to Exempt Banks from TCPA Law

The Federal Communications Commission (FCC) received a petition from the American Bankers Association (ABA) on Oct. 14 to do away with telemarketing restrictions that the associated banks feel pose “unreasonable and excessive risks” to these institutions.

The banks claim that they are at risk of facing Telephone Consumer Protection Act (TCPA) violation lawsuitswhen they are attempting to send automated messages about data breaches and fraud to their customers in a swift and efficient manner.

Under current TCPA laws, companies, banks, and telemarketers must receive consumers’ prior express consent before sending them text message alerts, automated calls, and pre-recorded robocalls. Without this element of consent, institutions cannot send automated calls or alerts without risking TCPA violations and possibly facing a TCPA lawsuit or TCPA class action lawsuit.

The ABA has stated that the FCC should exempt banks from TCPA robocall laws as they are allegedly attempting to send data security alerts and not telemarketing. Additionally, the banks claim because of the threats of legal action by consumers under TCPA law, they are “severely hampered” from doing their duty and delivering these important security messages.

One example the ABA brought up in their plea to the FCC was a 2013 TCPA class action settlement, in which ABA member Bank of America Corp. paid $32 million to settle plaintiffs’ claims of receiving unwanted text and calls from the banking defendant.

Additionally, one unnamed ABA member bank will only consent to send 40 percent of its breach alerts through an automated dialing system, allegedly due to the fear of possible legal repercussions.

The ABA claims that with several data breach events that occurred over the last year in member banks including Wells Fargo Co., JP Morgan, and Chase & Co. (compromising an estimated 76 million accounts), the need for the FCC to lift TCPA restrictions on ABA members is needed.

In the letter to the FCC, the ABA claimed, “ABA members strive to make these notifications quickly and efficiently. Financial institutions have found that automated communications are best suited to achieve these goals.” According to this ABA petition to the FCC, the quickest way to inform consumers of account security issues is through automated calls and texts.

FCC Commissioner Michael O’Rielly has stated his support of the ABA’s petition, stating that the FCC should allow legitimate companies like the members and associate members of the ABA to duck TCPA violation lawsuits.

What is The Telephone Consumer Protection Act (TCPA)?

The Telephone Consumer Protection Act is a set of laws passed by Congress to limit telemarketers’ use of automatic telephone dialing equipment and prerecorded or “robocall” messages to contact consumers

According to TCPA law, ABA bank members and associates would potentially be in violation of the TCPA by “making and/or initiating telephone calls using an automatic telephone dialing system or an artificial or prerecorded voice to any telephone number assigned to a cellular telephone service.”

Over the past few years, hundreds of U.S. consumers have filed TCPA lawsuits or joined TCPA class action lawsuits against companies, telemarketers, and banks alike who allegedly violated federal and state laws by contacting consumers through automated dialing systems without their prior express consent.