$2.6M TCPA Class Action Settlement Receives Final Approval

The $2.6 million settlement of a Telephone Consumer Protection Act (TCPA) class action lawsuit against college career planning company Peterson’s Nelnet LLC was approved by a federal judge in New Jersey.

U.S. District Judge Tonianne Bongiovanni said that the court found the class action settlement agreement was fair and made in an informed manner. Lead plaintiff Bais Yaakov, a member of a Jewish education organization, first made the allegations in 2011 against Peterson, stating that the company sent out more than 10,00 unsolicited and solicited fax advertisements for goods or services without proper consent or opt-out options, as required by the TCPA.

Both parties concurred with Bongiovanni’s decision, stating that any further litigation would be unnecessary and burdensome. Bongiovanni said she analyzed the nature of the claims, as well as the amounts and benefits that will be paid in the settlement, the allocation of settlement proceeds among the Class Members, and the fact that the settlement represents the compromises of the parties.

Under the agreement, the $2.6 million class action settlement fund will be created after all valid claims have been processed in the court. If the settlement does not cover all the valid claims, then fees and the incentive award will be paid out first, and then the balance of the settlement fund will be distributed prorated on the amount that a claimant would have otherwise received. If anything remains in the settlement fund, it will go to the defendant, who has also agreed to a permanent injunction prohibiting the company from using fax advertisements that violate the TCPA.

Claimants who submit copies of faxes will be eligible for a maximum cash award of $500 per fax, and claimants who submit an affidavit or declaration will be eligible for a cash payment of up to $275, depending on the number of faxes the claimant allegedly received.

The TCPA Class Action Lawsuit is Bais Yaakov of Spring Valley, et al. v. Peterson’s Nelnet LLC, Case No. 3:11-cv-00011, in the U.S. District Court of New Jersey.

Overview of TCPA

Under the TCPA (Telephone Consumer Protection Act), companies in the United States are prohibited from using automated dialing systems, using artificial or prerecorded voice messages, sending SMS text messages, and are not allowed to send unsolicited messages through fax machines to advertise to customers. By law, company representatives must provide their name, contact information, and the company they work for.

If companies are found to be in violation of the TCPA, penalties can range from $500 to $1,500. The lower end of the fines is for unintentional violations, but rise to $1,500 if the company is found to be in willful violation. Regulations of the TCPA include:

• Companies cannot call before 8 a.m. or after 9 p.m.
• Companies must maintain a “do-not-call” (DNC) list of consumers who asked not to be called; this list is to be honored for five years.
• Companies cannot send automated telephone equipment or an artificial or prerecorded voice to an emergency line, a hospital emergency number, a physician’s office, a hospital or health care facility, a cellular telephone, or any service for which the recipient is charged for the call.
• Companies cannot autodial calls that take up two or more lines of a multi-line business.