Debt Collection Text May Result in Liability under the Telephone Consumer Protection Act — Gutierrez v. Barclays Group

[Post by Venkat Balasubramani]

Gutierrez v. Barclays Group, Case No. 10cv1012 DMS (BGS) (S.D. Cal.; Feb. 9, 2011)

The Telephone Consumer Protection Act is a big stick. And it’s being wielded against debt collectors.

Plaintiffs (a husband and wife) applied for a credit card. On the application, the husband listed his work number and his wife’s cell phone number. Credit cards were issued to both the husband and the wife. At some point, when the couple were delinquent on their payments, Barclays began making collection calls to both numbers. It also sent text messages to the numbers. In response to one of the text messages, the husband asked (via text message) to cease further text messages. Although the court doesn’t explicitly say this, presumably, the messages from Barclays continued. Plaintiffs filed claims under the TCPA.

Defendants argued that plaintiffs consented to the text message by listing their number on the credit application, and sought to dismiss the claims against the wife on the grounds that she was not the “called party.” The court denies defendants’ request for summary judgment.

Consent: The first question was whether the wife consented to listing her telephone number and provided the “prior express consent” that would allow defendants to argue that the communications fell under this exception to the TCPA. Defendants pointed to an FCC Report and Order which stated that calls made by a creditor to a debtor to the number which the debtor provided in the credit application fall under the “prior express consent” exception. However, the wife argued that since she did not fill out the application in question, she could not have consented. The court found that there was little case law on the issue of how this type of consent must be expressed. The court looked to the criminal context and found that courts find consent to a search by the defendant, but also by a third party who possessed “common authority over or other sufficient relationship to the premises or effects” in question. Defendants put forth evidence that the husband possessed “common authority” over the phone because he freely used it. On this basis, the court finds that the wife effectively gave prior express consent to receiving the calls.

Revocation of consent: Unfortunately for defendants, that was not the end of the story. Plaintiffs argued that they revoked the consent via text message. Defendants argued that the revocation had to be in writing, but the court disagrees, noting that if consent could be provided by telephone or other means, it would be odd to require a revocation to be in writing. Ouch!

Whether the wife was the proper plaintiff: Defendants finally tried to get the wife’s claims dismissed on the basis that since she did not receive the texts in question, she was not the “called party” for purposes of the TCPA. The court looked to mixed rulings on the issue of who could sue for a TCPA violation. One case held that unintended and incidental recipients could not sue. At least one case held to the contrary that any recipient could sue. The court takes a different approach and rules that only the subscriber has a cause of action to sue under the TCPA.

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The TCPA is a tough statute for people who send unsolicited text messages. Third party consent is unreliable in the marketing context (see “Ninth Circuit Revives TCPA Claim–Satterfield v. Simon & Schuster”), but it looks unreliable in general. When you add the fact that consent can be revoked by text message or orally, people who send unsolicited text messages are not left with much comfort. I think that’s worth remembering is that unlike spam, it does not matter whether an unsolicited text message as sent for advertising purposes. It is also no defense that the recipient was not “separately charged” for the call. Debt collection text messages can violate the statute, absent consent (which can be easily revoked).

Unsolicited text message litigation has followed almost the opposite trajectory to spam litigation. Defendants just can’t seem to get a break. Some of this is a result of the overzealous plaintiffs involved in spam litigation. Some of it is also the structure of the respective statutes. The TCPA is just much more of a plaintiff friendly animal.

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