Pub. 4 2014 Issue 4

8 www.azbankers.org W H AT HANDY GADGETS OUR MOBILES CAN BE. IN FACT, WE TAKE PHONE NUMBERS FOR GRANTED, NOT MUCH caring what the person on the other end is using so long as “Can you hear me now?” gets a “Yes.” But consider the following statistics from a federal survey released in De- cember 2013: • Nearly 40% of American homes had only wireless phone ser- vice—no landlines at all. In 2009, that figure was only 23%. • Sixteen percent of all homes received all or nearly all calls on cell phones, in spite of having landline phones, too. • Two-thirds of adults ages 25-29 lived in households with cell service only. Add to these statistics another figure: Telephone companies are said to “re- cycle” as many as 37 million telephone numbers annually, and there is no mechanism for an organization, like a Can you hear me now? Class-action and other lawsuits may follow calls or texts to customer cell phones By STEVE COCHEO, Executive Editor & Digital Content Manager bank, to determine if a cell number in its customer records has been reassigned. While these statistics may be very interesting to the bank’s marketing de- partment, these are critical facts for the compliance function. Banks face exposure to a variety of parties who see them as deep pockets. One growing exposure lies in the world of cell phones under the strictures of the Telephone Consumer Protection Act (TCPA) of 1991, its implementing rules, and ongoing governance of those rules by the Federal Communications Commission. A law originally enacted to prevent intentional abusive contact patterns has been worked around to be a plaintiff moneymaker. While the TCPA covers all types of calls, the vast increase in cell phone usage has increased the potential liability. S COPING OUT THE RISK Any company, including banks, that needs to contact customers for many necessary reasons—warnings about po- tential fraud, alerts about low balances in accounts, payment reminders, and collections for unmade payments—can potentially be the target of a lawsuit under the TCPA if a plaintiff claims that he has been contacted on his cell phone using an “automatic telephone dialing system” (or autodialer) or a pre-recorded voice without his consent. (Overall in TCPA, the penalty can be $500 per call, text, or fax, or even more if willful disregard is proven. There is no cap on damages.) In a white paper issued last fall, the U.S. Chamber’s Institute for Legal Re- form stated that: “The TCPA has become a juggernaut: a destructive force that threatens com- panies with annihilation for technical violations that cause no actual injury or harm to any consumer. TCPA litigation will continue to expand and threaten well-meaning businesses with astronom- ical statutory damages unless something is done to limit those damages.”