CUNA Mutual Group Risk Alert: Court Decision Impacts TCPA Compliance

On March 16, 2018, the United States Court of Appeals for the D.C. Circuit handed down a much anticipated decision on FCC's 2015 Declaratory Ruling and Order. Key portions of the FCC’s Order in 2015, such as the FCC’s definition of an automatic telephone dialing system (ATDS or autodialer), are now considered unreasonable. The ruling also addressed the issue of reassigned cell phone numbers. These revisions could provide some compliance relief to credit unions.

Credit unions have struggled to comply with the Telephone Consumer Protection Act (TCPA). The main compliance obstacle has been the FCC’s definition of an automatic telephone dialing system (ATDS or autodialer). The TCPA defines an autodialer as “equipment which has the capacity -- (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

A recent decision by the United States Court of Appeals for the D.C. Circuit should provide credit unions with some much needed compliance relief. Applicable to credit unions, the Court examined the following issues:

  • What constitutes an automatic telephone dialing system (ATDS or autodialer) for purposes of the TCPA;
  • Is a credit union in violation of the TCPA when calling a cell phone number that has been reassigned to a consumer who has not given consent; and
  • How can a member revoke consent?

Autodialer – In the 2015 Declaratory Ruling and Order, the FCC clarified that an autodialer is equipment which has the capacity – or potential functionality – to store or produce telephone numbers using a random or sequential number generator and to dial such numbers. According to the FCC’s definition, any phone system could be considered an autodialer if autodialer features can be activated or the system reconfigured to add these features.

Ultimately, the FCC’s clarification on how equipment qualifies as an autodialer under the TCPA was vacated. The Court indicated any smartphone would qualify as an autodialer and referred to the FCC’s interpretation of “capacity” as “utterly unreasonable.”

Reassigned Cell Phone Numbers – The FCC explained that credit unions must have the consent of the current subscriber to call a cell phone number rather than the intended recipient of the call. However, credit unions were afforded one liability-free call when a cell phone number is reassigned.

Although the Court agreed that the consent of the member being called was required, they disagreed with the one-call safe harbor because it was arbitrary. Rather than set aside just the one-call safe harbor and create a strict liability interpretation, the Court decided to vacate the FCC’s entire approach to reassigned cell phone numbers.

Revoking Consent – Pursuant to the FCC’s 2015 Declaratory Ruling and Order, a credit union may suggest preferred methods for revoking consent, but must accept revocation of consent by any reasonable method. The Court agreed with the FCC’s guidance.

While clear answers don’t exist as to what constitutes an autodialer and how to handle reassigned cell phone numbers; the Court’s decision appears to be favorable for credit unions. The FCC will likely regroup to provide new clarifications.

Risk Mitigation
Consider these mitigation tips to ensure compliance with the TCPA:

  • Consider the features and capacity of your current calling equipment using a conservative approach to determine if it could be considered an autodialer under the TCPA.
  • Work with your document provider and/or legal counsel to create a compliant solution for obtaining the appropriate type of consent.
  • Obtain prior express written consent before making advertising / telemarketing calls and prior express consent before making debt collection, fraud, or identity theft calls.
  • Provide preferred methods for members to revoke consent.
  • Include an interactive opt-out mechanism in all artificial or prerecorded voice calls so that recipients may easily report a reassigned or wrong number.
  • Establish policies for determining whether a number has been reassigned after a period of no-response attempts.

Risk Prevention Resources
Access CUNA Mutual Group’s Protection Resource Center at for exclusive risk and compliance resources to assist with your loss control. The Protection Resource Center requires a User ID and password. Review this resource to learn more: