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S. HRG. 114–560 

THE TELEPHONE CONSUMER PROTECTION ACT 

AT 25: EFFECTS ON CONSUMERS AND BUSINESS 

HEARING 

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

MAY 18, 2016 

Printed for the use of the Committee on Commerce, Science, and Transportation 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

JOHN THUNE, South Dakota, Chairman 

ROGER F. WICKER, Mississippi 

ROY BLUNT, Missouri 

MARCO RUBIO, Florida 

KELLY AYOTTE, New Hampshire 

TED CRUZ, Texas 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

DAN SULLIVAN, Alaska 

RON JOHNSON, Wisconsin 

DEAN HELLER, Nevada 

CORY GARDNER, Colorado 

STEVE DAINES, Montana 

BILL NELSON, Florida, Ranking 

MARIA CANTWELL, Washington 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

RICHARD BLUMENTHAL, Connecticut 

BRIAN SCHATZ, Hawaii 

EDWARD MARKEY, Massachusetts 

CORY BOOKER, New Jersey 

TOM UDALL, New Mexico 

JOE MANCHIN III, West Virginia 

GARY PETERS, Michigan 

NICK ROSSI, Staff Director 

ADRIAN ARNAKIS, Deputy Staff Director 

REBECCA SEIDEL, General Counsel 

JASON VAN BEEK, Deputy General Counsel 

KIM LIPSKY, Democratic Staff Director 

CHRIS DAY, Democratic Deputy Staff Director 

CLINT ODOM, Democratic General Counsel and Policy Director 

(III) 

C O N T E N T S 

Page 

Hearing held on May 18, 2016 ............................................................................... 1 

Statement of Senator Thune ................................................................................... 1 

Statement of Senator Nelson .................................................................................. 3 

Statement of Senator McCaskill ............................................................................. 60 

Statement of Senator Blunt .................................................................................... 62 

Statement of Senator Klobuchar ............................................................................ 64 

Statement of Senator Daines .................................................................................. 66 

Statement of Senator Blumenthal .......................................................................... 68 

Statement of Senator Markey ................................................................................. 70 

Letter dated February 10, 2016, to Hon. John Thune and Hon. Bill 

Nelson from Greg Zoeller, Indiana Attorney General; Mark Brnovich, 

Arizona Attorney General; George Jepsen, Connecticut Attorney General; Doug Chin, Hawaii Attorney General; Andy Beshear, Kentucky 

Attorney General; Brian Frosh, Maryland Attorney General; Chris 

Koster, Missouri Attorney General; Cynthia H. Coffman, Colorado Attorney General; Karl A. Racine, District of Columbia Attorney General; 

Derek Schmidt, Kansas Attorney General; Janet Mills, Maine Attorney 

General; Maura Healey, Massachusetts Attorney General; Lori Swanson, Minnesota Attorney General; Tim Fox, Montana Attorney General; 

Hector Balderas, New Mexico Attorney General; Roy Cooper, North 

Carolina Attorney General; Peter F. Kilmartin, Rhode Island Attorney 

General; Sean Reyes, Utah Attorney General; Robert W. Ferguson, 

Washington Attorney General; Jim Hood, Mississippi Attorney General; 

Joseph Foster, New Hampshire Attorney General; Eric T. 

Schneiderman, New York Attorney General; Ellen F. Rosenblum, Oregon Attorney General; Herbert H. Slatery III, Tennessee Attorney 

General; and William H. Sorrell, Vermont Attorney General ................... 72 

Letter dated November 2, 1015, from the Alliance for a Just Society; 

Americans for Financial Reform; Center for Digital Democracy; Consumer Action; Consumer Federation of America; Consumers Union; 

The Institute for College Access & Success and its Project on Student 

Debt; Mid-Minnesota Legal Aid; NAACP; National Association of Consumer Bankruptcy Attorneys; National Consumer Law Center on behalf of its low-income clients; National Association of Consumer Advocates; North Carolina Justice Center; Woodstock Institute; US PIRG; 

and Virginia Poverty Law Center in support of the HANGUP Act .......... 75 

WITNESSES

Hon. Greg Zoeller, Attorney General, State of Indiana ........................................ 4 

Prepared statement .......................................................................................... 6 

Becca Wahlquist, Partner, Snell & Wilmer L.L.P., on behalf of the U.S. 

Chamber Institute of Legal Reform and U.S. Chamber of Commerce ............ 7 

Prepared statement .......................................................................................... 10 

Margot Saunders, Of Counsel, National Consumer Law Center ......................... 23 

Prepared statement .......................................................................................... 25 

Richard Lovich, National Legal Counsel, American Association of Healthcare 

Administrative Management ............................................................................... 41 

Prepared statement .......................................................................................... 43 

Monica S. Desai, Partner, Squire Patton Boggs .................................................... 45 

Prepared statement .......................................................................................... 47 

Page

IV 

APPENDIX

Letter dated May 17, 2016, to Hon. John Thune and Hon. Bill Nelson from 

Debra J. Chromy, Ed.D., President, Education Finance Council (EFC); 

James P. Bergeron, President, National Council of Higher Education Resources (NCHER); and Winfield P. Crigler, Executive Director, Student 

Loan Servicing Alliance (SLSA) .......................................................................... 79 

Letter dated May 17, 2016, to Hon. John Thune and Hon. Bill Nelson from 

ACA International, American Association of Healthcare Administrative 

Management (AAHAM), American Financial Services Association (AFSA), 

American Insurance Association (AIA), 1Coalition of Higher Education Assistance Organizations (COHEAO), Consumer Bankers Association (CBA), 

Electronic Transactions Association (ETA), Financial Services Roundtable 

(FSR), Florida Chamber of Commerce, Florida Justice Reform Institute 

(FJRI), Indiana Chamber of Commerce, Las Vegas Metro Chamber of Commerce, Missouri Chamber of Commerce and Industry, Montana Chamber 

of Commerce, National Association of Chain Drug Stores (NACDS), National Association of Mutual Insurance Companies (NAMIC), National Restaurant Association (NRA), National Retail Federation (NRF), Newspaper 

Association of America (NAA), Oregon Liability Reform Coalition (ORLRC), 

Professional Association for Consumer Engagement (PACE), Retail Industry 

Leaders Association (RILA), Satellite Broadcasting and Communications 

Association (SBCA), SLSA Private Loan Committee, South Carolina Civil 

Justice Coalition (SCCJC), State Chamber of Oklahoma, Student Loan 

Servicing Alliance (SLSA), Texas Civil Justice League (TCJL), U.S. Chamber of Commerce (USCC), U.S. Chamber Institute for Legal Reform (ILR), 

Washington Liability Reform Coalition, Wisconsin Manufacturers & Commerce (WMC), and West Virginia Chamber of Commerce ............................... 80 

Prepared statement of America’s Health Insurance Plans (AHIP) ..................... 81 

Prepared statement on behalf of the American Bankers Association, Consumer Bankers Association, Credit Union National Association, Financial 

Services Roundtable, Independent Community Bankers of America, and 

National Association of Federal Credit Unions ................................................. 83 

Letter dated June 1, 2016, to Hon. John Thune and Hon. Bill Nelson from 

Sarah E. Ducich, Senior Vice President, Public Policy and Government 

Relations, Navient ................................................................................................ 89 

Response to written questions submitted to Hon. Greg Zoeller by: 

Hon. John Thune .............................................................................................. 93 

Hon. Deb Fischer .............................................................................................. 94 

Hon. Steve Daines ............................................................................................ 94 

Hon. Maria Cantwell ........................................................................................ 95 

Hon. Cory Booker ............................................................................................. 95 

Response to written questions submitted to Becca Wahlquist by: 

Hon. John Thune .............................................................................................. 97 

Hon. Deb Fischer .............................................................................................. 101 

Response to written questions submitted to Margot Saunders by: 

Hon. John Thune .............................................................................................. 102 

Hon. Deb Fischer .............................................................................................. 103 

Hon. Steve Daines ............................................................................................ 104 

Hon. Maria Cantwell ........................................................................................ 105 

Hon. Amy Klobuchar ........................................................................................ 106 

Hon. Cory Booker ............................................................................................. 106 

Response to written questions submitted to Richard Lovich by: 

Hon. John Thune .............................................................................................. 107 

Hon. Roy Blunt ................................................................................................. 110 

Response to written questions submitted to Monica S. Desai by: 

Hon. John Thune .............................................................................................. 110 

Hon. Deb Fischer .............................................................................................. 114 

Hon. Steve Daines ............................................................................................ 115 

(1) 

THE TELEPHONE CONSUMER PROTECTION 

ACT AT 25: EFFECTS ON CONSUMERS 

AND BUSINESS 

WEDNESDAY, MAY 18, 2016 

U.S. SENATE, 

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:12 a.m., in room 

SR–253, Russell Senate Office Building, Hon. John Thune, Chairman of the Committee, presiding. 

Present: Senators Thune [presiding], Blunt, Fischer, Sullivan, 

Heller, Gardner, Daines, Nelson, Cantwell, McCaskill, Klobuchar, 

Blumenthal, Markey, Booker, and Manchin. 

OPENING STATEMENT OF HON. JOHN THUNE, 

U.S. SENATOR FROM SOUTH DAKOTA 

The CHAIRMAN. This hearing will get underway. My apologies for 

being tardy. I’m running around a lot today already, so I thank you 

all for your patience. And welcome you to today’s hearing on the 

Telephone Consumer Protection Act. 

When passing TCPA nearly 25 years ago, Congress expressly 

sought a balanced approach that protects the privacy of individuals 

and permits legitimate telemarketing practices. As a result of 

TCPA, a number of abusive and disruptive telemarketing practices 

have been significantly reduced or eliminated. For example, companies have to maintain Do Not Call lists and cannot make solicitation calls before 8 a.m. or after 9 p.m. 

But, TCPA is also showing its age, and there are opportunities 

to build on its consumer benefits while also ensuring consumers 

fully benefit from modern communications. Consumers should be 

able to take advantage of new technologies that help them avoid 

falling victim to unscrupulous actors and those callers who ignore 

Do Not Call requirements. I doubt there’s a person in this room 

who has not received a recorded voice on their mobile phone telling 

them that they’ve won a cruise. We should also ensure that the 

FCC continues to take action against abusive and harassing practices, and has the tools it needs to bring bad actors to justice, including those operating from overseas. 

We recently took a step in this direction by unanimously approving Ranking Member Nelson and Senator Fischer’s anti-spoofing 

legislation as part of the FCC Reauthorization Act. But, our discussion today is not only about policing abusive and harassing practices and stopping bad actors. We must also acknowledge that most 

2 

businesses are trying to do the right thing and play by the rules. 

And we need to understand whether TCPA is inadvertently hurting 

the good actors and consumers. 

When Congress passed TCPA, cell phones were uncommon and 

mobile telephone service was extremely expensive. It made sense to 

have particularly strict rules about contacting people on their mobile phones. Today, however, mobile phones are not only ubiquitous, they are actually smart devices that do much more than 

just send and receive phone calls. Consumer behavior is also far 

different than it was back in 1991. In fact, today’s consumer expectations about communications connectivity and the benefits of better contact with their doctors, schools, favorite charities, and, yes, 

even their lenders, would be unrecognizable to Congress 25 years 

ago. More than 90 percent of Americans now have a mobile phone, 

and nearly half of all households in the United States are mobileonly. These percentages are even higher for young adults. Simply 

put, if you can’t reach these people on their mobile phones, you’re 

going to have a hard time reaching them at all. The balance forged 

decades ago may now be missing the mark, and consumers may be 

missing the benefits of otherwise reasonable and legitimate business practices. 

The Federal Communications Commission was tasked by Congress with assuring a balanced application of TCPA. The Commission, however, has struggled to apply TCPA to a changing communications marketplace, and the agency actually seems to be creating more imbalances and more uncertainty. The Commission’s 

rules have created new questions rather than answers. For example, what is an auto-dialer? The Commission will not answer that 

clearly, and, instead, only says it’s something other than a rotarydialed telephone. The FCC declared last year that it would not address the exact contours of the auto-dialer definition or seek to determine comprehensively each type of equipment that falls within 

that definition. Hospitals, charities, utilities, banks, and restaurants should not have to engage engineers and telecommunications attorneys in order to know if they can call their customers 

without being sued. 

Another example is what to do if a customer’s number has been 

reassigned. While the FCC claims to have addressed this issue, 

companies say there is still no way to know with certainty. What 

is certain, however, is that, if a phone number has been reassigned 

and you call it more than once, you have—you could be liable for 

$500 per call, even if the new party never answers. 

TCPA litigation has also become a booming business. TCPA cases 

are the second most filled type of case in Federal courts, with 3,710 

filed last year alone. That represents a 45-percent increase over 

2014. And the companies affected by an unbalanced TCPA may 

surprise you. For example, Twitter stated the following in a filing 

at the FCC, and I quote, ‘‘As the result of this hyper-litigious environment, innovative companies increasingly must choose between 

denying consumers information that they have requested or being 

targeted by TCPA plaintiffs’ attorneys filing shakedown suits. No 

company should be put to such a choice.’’ 

The cost of getting the balance wrong isn’t just burdensome litigation, it is also the cost to consumers and to the economy of the 

3 

important consumer contact that is not being made, for fear of running afoul of an ill-defined rule. Text messages to let parents know 

about weather-related cancellations, calls to struggling low-income 

households know how to keep the heat from getting cutoff, calls to 

alert borrowers that they’re at risk of defaulting on their debts and 

ruining their credit ratings, and follow-up calls to patients to make 

sure they understand their post-discharge treatment plans. 

Another specific matter that will be discussed today is the 

Obama administration’s carve-out to allow robocalls to mobile 

phones to collect debts owed to or guaranteed by the Federal Government. The administration used last year’s must-pass Bipartisan 

Budget Act as a vehicle to achieve its robocall carve-out. The Committee reached out to the Office of Management and Budget, the 

Department of the Treasury, and the Department of Education to 

testify about why the administration has prioritized this robocall 

carve-out for years. Unfortunately, the Obama administration is 

not represented before us today, but we will continue to seek its 

input as its robocall carve-out is implemented by the FCC and as 

the Committee continues its oversight of TCPA. 

Ultimately, finding the right balance is essential to protecting 

the privacy of consumers while making sure that they have reasonable access to the information they want and need and making 

sure good-faith business actors can reasonably assess the cost of 

doing business. 

We have a variety of perspectives represented on the panel before us today, and I look forward to hearing your testimony, and 

appreciate your participation. Thank you. 

I’ll recognize the Senator from Florida, our Ranking Member, 

Senator Nelson. 

STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM FLORIDA 

Senator NELSON. Mr. Chairman, if you go anywhere in this country and you ask a consumer, ‘‘Do you want to receive robocalls?’’ 

or you ask them, ‘‘Would you like to receive robocalls on your cell 

phone?’’—you may get the cell phone thrown at you. There are few 

things that unite our countrymen and -women like the distaste for 

robocalls that are interrupting them at dinnertime, in the middle 

of driving—I mean, it goes on and on. It’s a sentiment that nearly 

all of us share, and that’s why, for the last 25 years, the laws have 

sided with consumers. The number of consumer complaints about 

robocalls, regardless of the laws, continue to increase. The FCC receives tens of thousands of robocall complaints every month. And 

we all have stories to tell. 

One of our friends signed up for a landline service one morning, 

and, by the afternoon, before he had given his new number to his 

family and friends, his phone was being flooded by robocalls. So, 

he gave up the landline. In fact, how many of us know friends at 

home that have given up the landline and just used the cell phone, 

for that exact same reason? They don’t want the robocalls. Most of 

us, our cell phone is our lifeline, and if we allow those annoying 

robocalls to begin freely bombarding folks, where do consumers go 

to escape the harassment? 

4 

So, what would happen on mobile phones is that they would start 

to ignore the calls from unknown numbers so they don’t have to 

hear another recording, only to miss an important call. Or what 

about the senior citizens? And how about low-income Americans? 

Many of those consumers have calling plans that are restricted in 

the number of minutes that they can use every month. So, opening 

the floodgates of wireless robocalls to those individuals would have 

an immediate adverse effect. 

Or what about driving down the road, just like I was this morning, dodging in and out of traffic, coming across the 395 bridge, 

people cutting in front of me and me having to slam on the brakes, 

and suddenly you get a call, and you want to answer it, but it’s not 

something important. It’s a robocall. And therefore, leading to distracted driving. And where would all of that end? 

The frustration is there also because of fraudulent callers. 

Scammers are always going to be a problem. We have tried to address that directly in a bipartisan way with the Chairman, thanks 

to his leadership. Senator Fischer and I have teamed up on our bill 

to combat spoofing. I’d also like us to see a revamped, improved Do 

Not Call List. 

Now, obviously, there are legitimate businesses and other reasons to call consumers on their wireless phones. But, there’s already an answer to that. Just get the consumers’ consent. That has 

been the law since 1991. In this bubble of Washington, policymakers are often in danger of losing sight to what is actually out 

there in America. And there’s no doubt. Ask that question of any 

American consumer. 

So, I want to thank you, Mr. Chairman, for calling this hearing 

to shed light on the distaste of American consumers about these 

annoying calls. 

The CHAIRMAN. Thank you, Senator Nelson. 

All right, we’ll get underway. We have with us today The Honorable Greg Zoeller, who’s the Attorney General for the State of Indiana; Ms. Becca Wahlquist, testifying on behalf of the U.S. Chamber 

Institute of Legal Reform; Ms. Margot Saunders, with the National 

Consumer Law Center; Mr. Rich Lovich, testifying on behalf of the 

American Association of Healthcare Administrative Management; 

and Ms. Monica Desai, who’s a Partner at Squire Patton Boggs law 

firm. 

So, we’ll start on my left, and your right, with Mr. Zoeller. Please 

proceed. And welcome to the Committee. 

STATEMENT OF HON. GREG ZOELLER, ATTORNEY GENERAL, 

STATE OF INDIANA 

Mr. ZOELLER. Thank you, Mr. Chairman and members of the 

Committee. I appreciate the opportunity to come and be heard. 

I’ll pick up where Senator Nelson left off, that we do, in the state 

of Indiana, receive remarkable number of complaints each year. I 

think last year it was somewhere around 14,000 calls, well the 

largest number of complaints in our consumer protection area. 

Over half of those complaints were about robocalls specifically. 

Indiana has a unique statute that was passed in 1988 that prohibits the use of the autodialer to make calls to consumers. And 

this is across the board. We’ve successfully defended that statute 

5 

up through the Federal courts, up to the 7th Circuit Court of Appeals, really talking about how we do not allow these calls for 

any—other than those that, like Senator Nelson mentioned, have 

opted in. So, the schools and the pharmacies and the people that 

you referred to, in terms of important calls, have opted in, and we 

do have those that are still being heard. 

But, I think the points that I want to make, I’ll—I’ve got written 

testimony that I’ve submitted, but I’ll kind of summarize briefly 

that, really, the focus of our attention has been on maintaining the 

protection of our own statutes. So, the recent budget bill that you 

mentioned that had the exception for Federal debt now challenges 

the ability of our state to defend our own statute. Since we did not 

have any exceptions, we can claim that there are no, let’s say, unconstitutional acts on the part of the state, so now that we have 

this new exception for Federal debt, I know the case that’s recently 

filed by the American Association of Political Consultants challenges the constitutionality. And, according to our read of the 7th 

Circuit Court of Appeals in our own defense, I think we’ve got risks 

now whether that exception might raise the question about whether it’s unconstitutionally distinguishing between certain types of 

calls. So, we have a blanket exception. It has been very effective. 

And we have been able to defend, but based on the fact that we 

did not have those types of exceptions that now the Federal Government has allowed. 

Just briefly, I’ll say that, you know, in the last month alone, according to YouMail, which is a national robocall index, they estimate that 2.5 billion robocalls were made in the month of March. 

So, again, the barrage of this—I, quite frankly, had to ask my staff 

whether that was a legitimate number, because I couldn’t believe 

it. But, unless someone wants to argue the other side, I’ll just leave 

it that that’s the only number we’ve got, in terms of the volume of 

these. 

We do have a very specific sense of what a robocall, the 

autodialer, is. When it can blast out 10,000 calls per minute, it’s 

a robocaller. And when you say that you get a call on a new line, 

it’s not that they actually called you; they called everybody in the 

area code. So, within an hour and a half, you can literally call everybody in Washington, D.C. 

We’ve heard from a number of companies that they really need 

the opportunity to call cell phones. But, again, I will side with Senator Nelson’s view that we—that’s the last link, in terms of the 

ability to communicate, since most of us have long since pulled out 

our landline due to the robocalling abuse. And again, most of it’s 

from overseas, so, again, not something that either State attorneys 

general or the Federal Government can address. 

Frankly, the problems that we have with robocalls, I’ve warned 

all the citizens of our state that, if it’s a robocall, you should assume it’s a scam artist. It’s really the best tool for scam artists. So, 

anytime you see these calls, we’ve trained the people of Indiana, 

hang up as quickly as you can, because, frankly, anything you say 

or do, even just staying on the line, will actually be sold to others. 

The information that you’re going to be home on a Wednesday at 

10:30 is now known by the people who have done the robocalling, 

and they sell that to others that may want to use other techniques 

6 

to call you at that same time and place, knowing that you’ll be 

home, the likelihood. And again, the risk to seniors is really where 

we see this. The use of this technology to collect data, when you— 

we talk about scam artists, you’re really talking about the old 

version of a confidence man. The more they understand about you, 

the more they can win over your confidence. And knowing when 

you’re going to be home, time, place, and the ability to target people with the amount of information, the risk to consumers are not 

just the harassment; this is the number-one tool to gain the information that the scam artists are using to bilk particularly the seniors in our state. 

I’ll, finally, just say that we were very disappointed with the exception that was carved out. Without this type of hearing—we’re 

having a hearing after-the-fact of the budget bill, which, again, the 

Chairman noticed that it was put in without really this kind of attention—we’re—I’m representing, now, 25 attorneys general who 

have asked that you take up the HANGUP Act, which would take 

that back out. So, while we’ve made an exception, which, again, 

risks the constitutionality defense, plus you’re targeting particularly the younger students who are using their cell phone, and now 

that we’ve managed to run up a 1.3 trillion dollars of student loan 

debt, again, that’s going to be the number-one target. So, we’re 

very worried about where this ends. We’re against creating a safe 

harbor, a number of reasons we can go through. 

But, finally, I would just say that the point that—for years, 25 

years now, of having the TCPA, there has always been the opportunity for legitimate businesses to ask people to opt in, ‘‘We have 

new programs that you may want to know about. Please sign up, 

and we won’t harass you. We will use it very specifically. You can 

always opt out.’’ But, we’ve never seen anyone really go through 

this process of asking consumers whether they would like to get a 

robocall. So, again, without the trial of going through the process 

of trying to get people’s opt-in consent, the assumption should be 

made that people don’t want this. And businesses know they will 

never get people to sign up for a robocall unless they can really 

argue the case to their own customers. This shouldn’t be something 

that the Federal Government allows, that the people that you represent have already made it pretty clear that they don’t want. 

So, thank you for—— 

The CHAIRMAN. Thank you, Mr. Zoeller, very much. 

[The prepared statement of Mr. Zoeller follows:] 

PREPARED STATEMENT OF HON. GREG ZOELLER, ATTORNEY GENERAL, 

STATE OF INDIANA

Thank you Mr. Chairman and members of the Committee. I am Greg Zoeller, the 

Attorney General of Indiana. I appreciate the invitation to speak to you today. 

Preventing unwanted and harassing calls to peoples’ phones has been a priority 

for attorneys general across the country, and particularly for me. I have spent my 

tenure as Attorney General working to strengthen Indiana’s Do Not Call laws and 

prosecute violators. Unwanted calls and robocalls are by far the most common complaint received by my office, with more than 14,000 complaints received last year— 

half of which were specifically about robocalls. My office receives new Do Not Call 

and robocall complaints at a rate of nearly 50 complaints per day. If this rate continues, the number of Do Not Call and robocall complaints could exceed 18,000 in 

2016. The YouMail National Robocall Index estimates that 2.5 billion robocalls were 

7 

1Source: http://www.youmail.com/phone-lookup/robocall-index/2016/march 

made in the U.S. in the month of March alone. Sixteen of the top twenty robocallers 

were debt collectors.1

It has been a long, tireless battle to help protect Hoosiers’ privacy by working to 

stop unwanted calls that pester, intrude and all too often scam people. In Indiana, 

we’ve advanced some of the strongest telephone privacy laws and banned nearly all 

types of robocalls. A Federal court recently upheld Indiana’s ban on political 

robocalls to peoples’ phones without their consent. We’ve also expanded our state’s 

Do Not Call law to include cell phones. 

Unfortunately, the Federal Telephone Consumer Protection Act (TCPA) was recently altered, undermining our tough state laws. The new amendment allows debt 

collection robocalls to peoples’ cell phones if the debt is owned or guaranteed by the 

United States. Prior to the amendment, the TCPA prohibited all robocalls to cell 

phones. By carving out this exception, Congress is legitimizing robocalls and allowing them a free pass to harass people. 

Debt collection robocalls are aggressive, relentless, and often inaccurate. Of the 

nearly 700 debt collection complaints my office received last year, about 90 percent 

were because the caller was harassing the wrong person. The vast majority of 

robocallers are scam artists. Legitimizing some types of robocalls adds confusion and 

creates more opportunity for fraud, particularly as government impersonation scams 

rise. We had more complaints about the IRS impersonation scam this year than any 

other telephone privacy complaint, with nearly 1,400 complaints received this year 

at a rate of 10 complaints per day. 

The debt collection exception particularly burdens young Americans struggling 

with student debt. College students and recent graduates are already buried in 

mountains of debt. Blasting them with robocalls, running up their cell phone bills 

and putting them at risk for fraud only adds insult to injury. In a letter sent earlier 

this year, I—along with 24 state attorneys general—called on the Committee to defend the telephone privacy rights of citizens by passing the HANGUP Act and keeping the ban on robocalls to cell phones intact. 

Some sellers are urging you to create a safe harbor to protect them from the bad 

acts of telemarketers calling on their behalf or generating leads. This is because 

courts have imposed strict liability on the sellers in several cases. There is no ‘‘safe 

harbor’’ for those who hire telemarketers or buy leads to sell their products in Indiana. Our legislature clearly stated that liability extends not only to those who make 

calls, but also to those who cause them to be made. That is why I am urging you 

not to water down the TCPA by approving any amendment that lets sellers off the 

hook. 

I would also like to stress the importance of the TCPA’s provision that allows private citizens to take action against companies and individuals that violate their telephone privacy rights. As Congress envisioned in 1991, individuals can pursue legal 

cases against telemarketers, faxers and debt collectors who violate the TCPA. This 

tradition has produced a rich body of case law, and curbed abuses by those who 

would otherwise ignore TCPA restrictions. 

Unwanted calls are a huge annoyance to our citizens. It’s frustrating when the 

Federal Government weakens state efforts aimed at protecting and serving our citizens. I urge Congress to stop allowing loopholes that legitimize robocalls and open 

citizens up to a barrage of unwanted or misplaced calls. 

Thank you for your time. I am available for any questions. 

The CHAIRMAN. Ms. Wahlquist. 

STATEMENT OF BECCA WAHLQUIST, PARTNER, 

SNELL & WILMER, L.L.P., ON BEHALF OF 

THE U.S. CHAMBER INSTITUTE FOR LEGAL REFORM 

AND U.S. CHAMBER OF COMMERCE 

Ms. WAHLQUIST. Good morning, Chairman Thune and Ranking 

Member Nelson, members of the Committee. That was my good 

mornings. 

My name is Becca Wahlquist. I am honored to represent the U.S. 

Chamber of Commerce and the Chamber of Institute for Legal Reform testifying before you today. 

8 

The context for my knowledge about the TCPA is that, for over 

a decade, I have defended various companies sued under the TCPA 

for a variety of communications made via phone, text, and facsimile. So, I’ve been a firsthand witness to the growing cottage industry of TCPA plaintiffs lawyers who have been targeting American businesses. I can confirm that, in the past few years, the problems with TCPA litigation abuse have only worsened. And so, we 

need your help. 

Over-incentivized plaintiffs, a growing TCPA plaintiffs’ bar, and 

an antibusiness 2015 order from the FCC have led to an explosion 

of litigation in our country, litigation that is less about protecting 

consumers and more about driving a multimillion-dollar commercial enterprise of TCPA lawsuits. These suits, for the large part, 

are not about marketing calls. They’re not about the kinds of 

robocalls that we were just hearing of. Robocalls are those indiscriminate calls reaching out, trying to get anyone, going through 

the numbers in an area code, just getting someone to pick up the 

phone. Robocalls are not what my clients have sent. 

So, for example, a client that has millions of customers, has a lot 

of automated systems, a customer’s credit-card payment is rejected. 

The customer has provided a telephone number as their point of 

contact to the company. The company then contacts the customer 

to let them know, ‘‘Your credit card’s been rejected,’’ because if they 

don’t know that, and their service gets turned off, there are going 

to be fees to get your service turned back on again. So, this is all 

trying to provide information to a customer-provided number. 

The biggest driver of litigation now is if that number has been 

reassigned and the company has no knowledge about the reassignment. So, who they then send that message to ends up being a new 

owner, and that’s what’s driving a big chunk of the TCPA litigation 

now, is that you now have someone who says, ‘‘Well, I didn’t consent to get that call,’’ and especially if they don’t inform the company, the calls can keep rolling in for other reasons, and then you 

start getting, ‘‘I now have 40 calls, now I want my $20,000,’’ and 

you get the demand. And this is what companies are facing over 

and over again. 

The TCPA itself does not provide for attorneys’ fees. It’s clear 

that TCPA class lawsuits are just a lawyer-driven business at this 

point. Attorneys’ fees awards are getting pulled from common class 

funds, dwarfing any recovery for individual consumers. For example, in 2014, the average attorneys’ fees awarded in a TCPA class 

action was $2.4 million, while the average class member’s award in 

those actions would be $4.12. 

It’s not just large companies who are finding themselves targeted. Small businesses throughout the country are finding themselves brought into court when they had no intention of violating 

any law, they had no knowledge of the TCPA. I have one client 

right now who has six employees and found me on the Internet because I talk about TCPA, and I took on their case. And if they 

can’t—they’re not sure what to do. They’re going to have to shutter 

their business and fire their employees and close shop if they can’t 

get past this TCPA lawsuit that’s being brought on a class-action 

basis by someone who received a call at a reassigned number. 

9 

So, small businesses throughout the country, a wide range of industry, so you have—literally thousands of different companies are 

being sued under the TCPA right now—social media companies, 

electric companies, banks, sports teams, pharmacies, family owned 

plumbing companies, a ski resort, an accountant, a local dentist office. They’ve all found themselves defending against TCPA litigation and facing what, for them, is potentially annihilating statutory 

damages for gotcha violations. And these are not spoofing robocalls, 

these are legitimate communications that these companies are trying to make. 

The TCPA is not only a liability trap, it’s a vicarious liability 

trap, as well. So, for example, there are companies that make no 

calls, they have no telemarketing, they have no interaction with 

consumers—such as manufacturers—and they’re finding themselves getting dragged into TCPA litigation on the argument that, 

‘‘Your product name was mentioned in the spoofed robocall that I 

received. And, because your name was mentioned, you’re on the 

hook and you are responsible.’’ And this is a problem, because you 

have companies with deep pockets now in litigations having to defend themselves on a class-action basis, where the statutory damages are so potentially annihilating that it really forces settlements 

rather than a defense. 

So, I provided some examples in my witness statement of some 

of the litigation abuse, such as the Pennsylvania woman who subscribes to 35 cellular phones, carries them around in a suitcase 

with her so she can jot down all the calls that she gets. She specifically chooses area codes from Florida areas so that they are more 

likely to have potentially socioeconomically depressed conditions. 

She chooses the area codes carefully and then waits for reassigned 

numbers to come in, and brings hundreds of suits. 

I mentioned the Ohio man who was so resistant to putting his 

number on the Do Not Call List that he actually fought up through 

the Ohio Supreme Court to be able to keep getting calls, because 

he wanted to bring suits under them and didn’t want to be on the 

Do Not Call List. 

There are a lot of plaintiffs that are—people that are making 

their living right now as TCPA plaintiffs. 

I also provided some examples in my written statement of TCPA 

attorneys who are behind quite a bit of litigation abuse. 

So, it has been 25 years since the TCPA was drafted, and the 

equipment that was focused on was equipment that doesn’t even 

exist anymore. The original intent of the TCPA is something I discuss in part 2 of my statement. I ask you to review that, to think 

about the changes that need to be made. I make suggestions in 

part 5 of my statement. 

I’m just here today to sum up, to voice the hope of thousands of 

businesses being sued under the TCPA, that Congress will act to 

update the TCPA, provide the greatest degree of clarity and alleviate the intolerable and unfair burdens that portions of the statute 

are placing on legitimate American businesses. 

[The prepared statement of Ms. Wahlquist follows:] 

10 

1See In re Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 

30 F.C.C.Rcd. 7961, 8072–73(2015) (Pai Dissent). 

PREPARED STATEMENT OF BECCA WAHLQUIST, PARTNER, SNELL & WILMER L.L.P., ON

BEHALF OF THE U.S. CHAMBER INSTITUTE FOR LEGAL REFORM AND U.S. CHAMBER

OF COMMERCE

Chairman Thune, Ranking Member Nelson, and distinguished members of the 

Committee, thank you for inviting me to testify on behalf of the U.S. Chamber Institute for Legal Reform (‘‘ILR’’) and U.S. Chamber of Commerce. The U.S. Chamber 

of Commerce is the world’s largest business federation representing the interests of 

more than three million companies of all sizes, sectors, and regions, as well as state 

and local chambers and industry associations, and dedicated to promoting, protecting, and defending America’s free enterprise system. ILR is an affiliate of the 

Chamber dedicated to making our Nation’s civil legal system simpler, faster, and 

fairer for all participants. 

I appreciate the opportunity to testify about the impact of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (‘‘TCPA’’) on American businesses big and 

small, in a manner never intended by the drafters of this 25-year-old statute. 

The TCPA is a well-intentioned statute that established our Nation’s Do Not Call 

list and carried forward important policies. But portions are horribly outdated; in 

particular, Section 227(b), which addresses technologies used for cold-call telemarketing in the early 90s, is now being expanded to attach liability to all manner 

of calls (i.e., informational and transactional) placed by businesses small and large 

to customer-provided numbers. TCPA litigation is also fueled by statutory damages 

that are untethered to any actual harm, and that can quickly balloon to staggering 

amounts of potential liability. 

Unfortunately, it is American businesses, and not harassing spam telemarketers, 

who are the targets for these suits. As FCC Commissioner Pai recently noted, ‘‘The 

TCPA’s private right of action and $500 statutory penalty could incentivize plaintiffs 

to go after the illegal telemarketers, the over-the-phone scam artists, and the foreign fraudsters. But trial lawyers have found legitimate, domestic businesses a 

much more profitable target.’’ 1 Indeed, businesses reaching out in good faith to customer-provided telephone numbers are now the most common target of TCPA litigation. 

It is time for this statute to be revisited and brought in line with other Federal 

statutes that provide for statutory damages when there is no actual harm. While 

protections should remain for consumers, businesses too need protection from astronomical liability for four years’ worth of communications to customer-provided numbers (with no stated statute of limitations, courts have applied the default four-year 

period in TCPA litigation). As further detailed below, the TCPA has created perverse incentives for persons to invite calls from domestic businesses and then sue 

for those calls, and for lawyers to search avidly for deep-pocket defendants calling 

their potential clients, even offering smartphone applications to help generate those 

lawsuits. TCPA litigation abuse is rampant, and its negative impact on American 

businesses is not what was intended when this statute was passed in a different 

technological era. 

I. Background: The Destructive Force of TCPA Litigation 

The TCPA was enacted twenty-five years ago to rein in abusive telemarketers. 

But in recent years American businesses have discovered that if they reach out to 

customers via call, text, or facsimile for any reason, their company is at risk of being 

sued under the TCPA. 

A plaintiff claims that a communication was made without his or her consent 

using certain technologies, and more often than not, that plaintiff claims to represent a nationwide class seeking the $500 (or $1,500, if willful) statutory damages 

available under the TCPA for each communication. Thus, the small business that 

sent 5,000 faxes finds itself being sued for a minimum of $2.5 million; the restaurant that sent 80,000 text coupons is sued for trebled damages of $120 million; 

and the bank with 5 million customers finds itself staring at $2.5 billion in minimum statutory liability for just one call placed to each of its customers. 

Individual plaintiffs can also stockpile calls they believe violate the TCPA for 

years, and then make demands or sue once they reach critical mass—seeking 

$20,000 to $60,000 in individual damages, for example, for 40 unanswered calls a 

company thought it was placing to its own customer’s number over a three-year period. The targeted company must then decide whether to pay plaintiffs’ counsel or 

the complaining individual, or to spend significant money defending an action in 

11 

2See In re Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 

30 F.C.C.Rcd. 7961 (2015) (hereafter, ‘‘July 2015 FCC Order’’). Various appeals of this Order 

have been consolidated and are now pending before the D.C. Circuit Court of Appeals. 3See Wells Fargo Ex Parte Notice, filed January 16, 2015, in CG Docket No. 02–278, p. 19, 

available at http://apps.fcc.gov/ecfs/document/view?id=60001016697. 4See Am. Copper & Brass, Inc. v. Lake City Indus. Products, Inc., 1:09–CV–1162, 2013 WL 

3654550 (W.D. Mich. July 12, 2013) (business retained fax blaster to send faxes; no question 

that the business first inquired whether such faxes were legal and received assurances that they 

were). 5See id.at *6. 6See http://webrecon.com/out-like-a-lion-debt-collection-litigation-cfpb-complaint-statistics-dec 

-2015-year-in-review/. 7Source: Bloomberg Law Litigation & Dockets (searched on May 10, 2016 with a search of 

‘‘TCPA’’ OR ‘‘telephone consumer protection’’ in the Florida District Courts). 8 King v. Time Warner Cable, 113 F. Supp. 3d 718 (S.D.N.Y. 2015). 9 Nelson v. Santander Consumer USA, Inc., 2013 WL 1141009 (W.D. Wisc., March 8, 2013), 

a decision later vacated by agreement of the parties as part of a confidential settlement. 

which, when a class is alleged, has statutory damages that can reach into the millions or billions of dollars. 

For over a decade, I have defended various companies sued under the TCPA for 

a variety of communications made via phone, text, and facsimile. I have been witness to the growing cottage industry of TCPA plaintiffs and lawyers targeting American businesses that reach out to their own customers for any reason (transactional, 

informational, or marketing), and I can confirm that in the past few years, the problems with TCPA litigation abuse have only worsened. Over-incentivized plaintiffs 

and a growing TCPA plaintiffs’ bar, as well as an anti-business July 2015 Order 

from a sharply divided FCC majority,2 have led to an explosion of litigation throughout the country—litigation that is less about protecting consumers and more about 

driving a multi-million dollar commercial enterprise of TCPA lawsuits. 

Indeed, while the TCPA itself does not provide for attorneys’ fees, it is clear that 

TCPA class lawsuits are a lawyer-driven business, with attorneys’ fees awards 

(pulled from common class funds) dwarfing any recovery for individual consumers. 

For example, one survey of Federal TCPA settlements found that in 2014, the average attorneys’ fees awarded in TCPA class action settlements was $2.4 million, 

while the average class member’s award in these same actions was $4.12.3

And it is not just large companies who find themselves targeted: Small businesses 

throughout the country are finding themselves brought into court when they had 

no intention of violating any law and had no knowledge of the TCPA. One familyowned company from Michigan, Lake City Industrial Products, Inc., struggled for 

several years to defend a TCPA class action for 10,000 faxes, providing a chilling 

example of how the risks of unknowingly violating the TCPA can be exacerbated by 

lead generators who reach out to small companies and promise an inexpensive and 

legal way to get new businesses. Lake City received a faxed advertisement suggesting a way to generate new business: faxes to be sent to approximately 10,000 

targeted businesses, all for the low sending cost of $92.4 The family-run company 

believed it was engaging in a legal marketing tactic and worked with the fax advertiser to design the facsimile it would send; on summary judgment, the court found 

Lake City liable for approximately 10,000 violations of the TCPA for the unsolicited 

marketing facsimiles, even though Lake City noted that statutory damages of 

$5,254,500 would force its bankruptcy.5 This is just one of the small businesses that 

has found itself facing annihilating statutory damages and accruing staggering defense costs for sending faxes in the modern age, when facsimile machines are no 

longer expensive and, indeed, most ‘‘facsimiles’’ are converted to e-mail PDF and 

sent to a recipient’s e-mail by company servers. 

With such riches to be had through TCPA lawsuits, between 2010 and 2015, the 

amount of TCPA litigation filed in Federal court increased by 940 percent.6 For just 

one example of how this has impacted the already-crowded Federal court system, 

look to Florida: in 2015, at least 170 TCPA actions were filed just in Florida’s Federal courts, compared with less than 30 such Federal actions in 2010.7

The dramatic increase in TCPA litigation has been spurred by multi-million dollar settlements (such as Capital One’s $75 million settlement in 2014), as well as news 

of individual awards in the hundreds of thousands of dollars (such as one New Jersey woman’s $229,500 verdict against her cable provider in July 2015,8 or a Wisconsin woman’s $571,000 verdict in 2013 against the finance company calling her 

husband’s phone after she defaulted on car payments 9). 

Attorneys have profited as well, often teaming up to split the costs of ‘‘investing’’ 

in a TCPA litigation, so that multiple firms split the business risk and share in the 

reward when companies facing enormous statutory damages end up settling. In the 

Capital One action, for example, when considering the appropriate attorneys’ fees 

12 

10See In re Capital One Tel. Consumer Prot. Act Litig., 80 F. Supp. 3d 781, 805 (N.D. Ill. 

2015), appeal dismissed (May 5, 2015), appeal dismissed (June 8, 2015), appeal dismissed (June 

26, 2015) (also recognizing ‘‘the strong incentives to settlement created by the magnitude of Capitol One’s potential liability’’). 11 Id. at 809. 12 As Chief Judge Richard Posner of the U.S. Court of Appeals for the Seventh Circuit has 

explained, certification of a class action—even one lacking in merit—forces defendants ‘‘to stake 

their companies on the outcome of a single jury trial, or be forced by fear of the risk of bankruptcy to settle even if they have no legal liability. In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 

1299 (7th Cir. 1995). 

(rather than the 33–40 percent of the award the named plaintiffs had agreed to with 

their various lawyers), the court recognized that while Capital One had many defenses that could extinguish the plaintiffs’ TCPA claims, the in terroem value of settling an action with even a slight chance of billions of dollars in statutory damages 

was ‘‘bankruptcy-level exposure’’ that made settlement (and a fees award) more likely than not, so that a fees award of a little over 20 percent was more appropriate.10

The plaintiffs’ law firms were awarded their costs and $15,668,265 in fees out of 

the settlement fund.11

Businesses of all sizes in a wide range of industries—from social media companies, electric companies, banks, sports teams, and pharmacies, to a family-owned 

plumbing company, a ski resort, an accountant, and a local dentist’s office—have 

found themselves defending against TCPA litigation and demands. Indeed, the 

TCPA is not only a liability trap, but also a vicarious liability trap as well. For example, companies (such as manufacturers) who place no phone calls to consumers 

are finding themselves defending class action litigation for millions of calls or texts 

placed by downstream resells simply because those communications purportedly 

mentioned their name-brand products. Companies are subject to the expense of defending against claims such as, for example, a text message was sent on their behalf, when the company did not send the message, did not authorize that such messages can be sent, and had no knowledge of which business partner (if any) would 

breach its contract to perform illegal telemarketing (as often the actual senders of 

spam text messages spoof the originating number that would show in the Caller ID 

field to hide their identity). Even the simple mention of the company’s name in the 

text message subjects it to class-wide TCPA litigation by plaintiffs’ attorneys hoping 

for the big payday of a settlement (because so many companies do settle due to the 

in terrorem specter of billions of dollars in potential damages, if a large enough class 

could be certified.12). 

To better explain the current TCPA landscape, Part II of my testimony below first 

addresses the original intent of the TCPA and the language that, in 1991, was designed to target certain abusive and harassing marketing calls, and then explains 

how the statute has been twisted and expanded without Congress’ input to apply 

to modern technologies. Part III examines the current driving forces behind TCPA 

cases, and the reasons that companies cannot fully protect themselves from suits 

under Section 227(b). Part IV provides examples of just some of the rampant litigation abuse by both serial TCPA plaintiffs and by attorneys incentivized to bring 

TCPA lawsuits at an ever-increasing pace. I conclude in Part V by voicing the hope 

of the thousands of businesses being sued under the TCPA: that Congress should 

act to update the TCPA in order to provide the greatest degree of clarity and to alleviate the intolerable and unfair burdens that portions of this statute are placing 

on businesses. In order to start that discussion, I provide several recommendations 

that would bring the TCPA’s private right of action in line with that of other Federal statutes offering consumer remedies and that could help protect American companies and Federal courts from the repercussions of litigation abuse, and allow business to continue communications helpful and important to their customers. 

II. The Original Intent, and Current Application, of the TCPA 

The TCPA was enacted during a very different technological era, and is now twenty-five years removed from modern technologies. The telemarketing calls and faxes 

that the TCPA was designed to curtail were made by aggressive marketers employing tactics—such as random number generation or sequential dials—that systematically worked through every possible number in an area code, with the hope of getting someone to answer the phone or look at a fax with a marketing pitch for a 

product or service. Facsimile machines required expensive thermal paper; cellular 

phones were extremely uncommon (and very bulky) with expensive usage costs— 

thus, special protections were put in place for unsolicited calls made to cell phones 

and for unsolicited faxes that did not provide an easy opt-out. Caller ID was not 

in use, and so the only way to know who was calling was to pick up the ringing 

13 

13See 47 U.S.C. § 227(a) ‘‘Definitions: As used in this section—(1) The term ‘‘automatic telephone dialing system’’ means 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.’’ 14See, e.g., Report of the Energy and Commerce Committee of the U.S. House of Representatives, H.R. Rep. 102–317, at 10 (1991) (discussing ‘‘Automatic Dialing Systems’’ as follows: ‘‘The 

Committee report indicates that these systems are used to make millions of calls every day. . . . 

Telemarketers often program their systems to dial sequential blocks of telephone numbers, 

which have included those of emergency and public service organizations, as well as unlisted 

telephone numbers. Once a phone connection is made, automatic dialing systems can ‘‘seize’’ a 

recipient’s telephone line and not release it until the prerecorded message is played, even when 

the called party hangs up. This capability makes these systems not only intrusive, but, in an 

emergency, potentially dangerous as well.’’) 15Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 742 (2012). 16See 47 U.S.C. § 227(b). 17See 47 U.S.C. § 227(c). 18See, generally, 47 C.F.R. § 64.1200. 19 137 Cong. Rec. 30821–30822 (1991) (emphasis added). 

telephone. Text messages did not exist (indeed, e-mail was still uncommon), and today’s smart phones were science fiction fantasies. 

An understanding of the technologies available in 1991 is crucial to an understanding of the TCPA’s intent: Businesses reaching out to their own customers were 

not doing so through what the statute defined as ‘‘ATDS machines’’—systems capable of randomly and sequentially generating and dialing numbers,13 which were 

being used by telemarketers who did not care whom they reached, as long as they 

could get a certain number of people to pick up the phone. Congress was focused 

on the belief that limiting calls from ATDS autodialers would stop a certain kind 

of calling technology that ‘‘seized’’ phone lines that had been called randomly or sequentially.14

The TCPA was designed to address consumer privacy concerns and serious intrusions from that type of aggressive marketing. As the Supreme Court has noted, 

‘‘Congress determined that Federal legislation was needed because telemarketers, 

by operating interstate, were escaping state-law prohibitions on intrusive nuisance 

calls.’’ 15 The TCPA set rules about the kinds of consent required to make certain 

communications to phones and facsimile machines,16 and further authorized the establishment of a national Do Not Call (DNC) list that would record consumers’ requests to not receive any telemarketing calls.17 The FCC was tasked with implementing the TCPA and promulgating the regulations that would create the national 

DNC, and over time the FCC has updated its regulations to add new requirements 

(such as the need for companies to maintain their own internal DNC list for requests to stop telemarketing otherwise permissible because of an Existing Business 

Relationship (EBR)).18

On the Senate floor, the TCPA’s lead sponsor, Senator Hollings (D–SC), explained 

that the TCPA was intended to ‘‘make it easier for consumers to recover damages’’ 

from computerized telemarketing calls, and that the intent was for consumers to go 

into small claims courts in their home states so that the $500 in damages would 

be available without an attorney: 

The substitute bill contains a private right-of-action provision that will make it 

easier for consumers to recover damages from receiving these computerized 

calls. The provision would allow consumers to bring an action in State court 

against any entity that violates the bill. The bill does not, because of constitutional constraints, dictate to the states which court in each state shall be the 

proper venue for such an action, as this is a matter for State legislators to determine. Nevertheless, it is my hope that states will make it as easy as possible 

for consumers to bring such actions, preferably in small claims court. . . . 

Small claims court or a similar court would allow the consumer to appear before 

the court without an attorney. The amount of damages in this legislation is set 

to be fair to both the consumer and the telemarketer. However, it would defeat 

the purposes of the bill if the attorneys’ costs to consumers of bringing an action 

were greater than the potential damages. I thus expect that the States will act 

reasonably in permitting their citizens to go to court to enforce this bill.19

It is clear that the private right of action focused on allowing consumers to sue 

telemarketers. Moreover, it was so clear that TCPA claims were intended to be handled on an individual basis in small claims court, the few early TCPA litigants in 

Federal courts were told that there was no jurisdiction in Federal court to hear 

TCPA claims, a matter only finally resolved by the U.S. Supreme Court in 2012 in 

its Mims decision (when the question had essentially been mooted for large TCPA 

14 

20Pew Internet Project, Mobile Technology Fact Sheet, Pew Research Center (2014), available 

at http://www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/. 

21Stephen J. Blumberg & Julian V. Luke, Div. of Health Interview Statistics, Nat’l Ctr. for 

Health Statistics, Centers for Disease Control and Prevention, Wireless Substitution: Early Release of Estimates From the National Health Interview Survey, January–June 2014, at 1–3 

(Dec. 16, 2014). 22 47 U.S.C. § 227(a)(1) (emphasis added). 23See July 2015 FCC Order, 30 FCC Rcd. at 7974–7976. 24See also id., Pai Dissent, 30 FCC Rcd. at 8074 (‘‘That position is flatly inconsistent with 

the TCPA. The statute lays out two things that an automatic telephone dialing system must 

be able to do or, to use the statutory term, must have the ‘‘capacity’’ to do. If a piece of equipment cannot do those two things—if it cannot store or produce telephone numbers to be called 

using a random or sequential number generator and if it cannot dial such numbers—then how 

can it possibly meet the statutory definition? It cannot. To use an analogy, does a one-gallon 

bucket have the capacity to hold two gallons of water? Of course not.’’); see also id., O’Rielly 

Dissent, 30 FCC Rcd. at 8088–90. 

class actions by the earlier Class Action Fairness Act’s provision that class actions 

alleging over $5 million in damages could be removed to Federal court). 

There was no real debate over the TCPA at the time of its passage; certainly, 

there was no indication of what the TCPA would grow to become. But now, a statute 

designed to provide a private right of action for consumers to pursue their own 

claims against entities placing intrusive and aggressive telemarketing calls, preferably in small claims court and without an attorney, now threatens to bankrupt 

any legitimate company placing legitimate business calls, as well as any ‘‘deep-pocket’’ entity that plaintiffs can claim could be vicariously liable for another person’s 

or entity’s communications. 

The largest driver of TCPA litigation these days is claims of ‘‘autodialed’’ calls or 

texts to cellular phones placed without prior consent, because so many Americans 

now use their cell phones as their primary point of contact—as of 2014, 90 percent 

of American households had cellular phones,20 and almost 60 percent were wirelessonly households.21 Unlike in 1991, the modern owners of cellular numbers often opt 

to provide those numbers to companies with whom they do business. And unlike in 

1991, companies often use computerized systems to efficiently contact these numbers—systems that TCPA plaintiffs argue are ‘‘autodialers’’ subject to the TCPA’s 

restrictions. 

As already noted above, the TCPA defines an ‘‘autodialed’’ call as one made on 

an automated telephone dialing system (ATDS), ‘‘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.’’ 22 TCPA plaintiffs and their attorneys have been arguing in lawsuit after lawsuit that if a call was placed with equipment that has even a hypothetical, future capacity to store or produce random or 

sequentially generated numbers (i.e., through reprogramming), that call or text was 

placed with an ATDS. And in an Order now on review before the D.C. Circuit Court, 

a divided majority of FCC commissioners agreed in June 2015 that ‘‘capacity’’ to 

randomly/sequentially dial need not be an operative feature in dialing equipment for 

the call to be considered ‘‘autodialed’’ and subject to the TCPA’s restrictions.23 (The 

two dissenting commissioners vehemently disagree.24) 

The central problem to businesses with Section 227(b)’s prohibition on 

‘‘autodialed’’ calls to cellular phones is that legitimate companies are being swept 

into the strict liability intended for the bad actors who, in 1991, were cold-call telemarketing random or sequential telephone numbers using a specific kind of equipment. No legitimate company in 1991 was trying to reach its own customers by randomly dialing numbers with equipment that fit the definition of an ATDS (as it 

would make no sense to try to reach a customer by dialing random numbers), so 

as to be subject to $500 or $1,500 per call liability for ‘‘autodialed’’ calls. Thus, it 

makes sense to see no affirmative defenses built into Section 227(b), because no one 

making cold calls to random telephone numbers would have a defense for such practices. 

On the other hand, many companies in 1991 did conduct some form of targeted 

telemarketing to customers, former customers, or prospective customers, and were 

bound by Section 227(c) to adhere to all the telemarketing rules established as to 

the DNC list. The separate private right of action in Section 227(c)(5) gives more 

protection to the legitimate companies that could violate DNC provisions: having exceptions during existing business relationship periods; allowing one free mistake 

each twelve months per number; setting statutory damages at the less draconian 

‘‘up to’’ $500 per communication; and providing affirmative defenses for companies 

who are making good faith efforts to comply with the law (i.e., by establishing writVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00018 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
15 

25See 47 U.S.C. § 227(c)(5) (‘‘It shall be an affirmative defense in any action brought under 

this paragraph that the defendant has established and implemented, with due care, reasonable 

practices and procedures to effectively prevent telephone solicitations in violation of the regulations prescribed under this subsection.’’). 26See In re: Rules and Regulations Implementing the Telephone Consumer Protection Act of 

1991, 23 F.C.C.R. 559, 564–65 ¶ 10 (F.C.C. Jan. 4, 2008). 27See July 2015 FCC Order, 30 FCC Rcd. at 8001. 28The Third Circuit recently made such matters worse, in a ten-year battle over a single 

phone call one roommate picked up on March 11, 200, by ruling in October 2015 that a ‘‘habitual 

user’’ of a shared telephone such as a roommate was in the ‘‘zone of interests protected by the 

TCPA’’, and had alleged sufficient facts to pursue a claim under the TCPA if he answered a 

‘‘robocall’’ intended for his roommate (who may herself have given prior consent for that call). 

See Leyse v. Bank of Am. Nat. Ass’n, 804 F.3d 316, 327 (3d Cir. 2015). 29See July 2015 FCC Order, O’Rielly Dissent, 30 FCC Rcd. at 8084 (‘‘I disagree with the 

premise that the TCPA applies to text messages. The TCPA was enacted in 1991—before the 

first text message was ever sent. The Commission should have had gone back to Congress for 

clear guidance on the issue rather than shoehorn a broken regime on a completely different 

technology.’’). 

ten DNC policies and training employees on such policies 25). Thus, companies were 

given instructions needed to comply with the DNC section of the TCPA, and could 

defend themselves in the instances when the inevitable human error, such as a customer representative not accurately recording a DNC request, would occur. 

It should come as no surprise that most TCPA litigation is now being brought 

under Section 227(b)’s unforgiving prohibitions on autodialed or prerecorded calls 

placed to cellular phones without prior express consent. Plaintiffs argue that calls 

or call attempts were autodialed. While the FCC has opined that ‘‘prior express consent’’ for transactional and informational calls exists when a customer opts to provide his or her cellular telephone number to a company (i.e., on an application),26

the FCC majority has also now stated that companies are liable (after the first call) 

to all ‘‘autodialed’’ calls placed to those customer-provided numbers if, unbeknownst 

to the company, the customer has changed his or her telephone number or provided 

a wrong number in the first place.27 Thus, a company reaching out to a customerprovided number can unknowingly be contacting a new subscriber to the cellular 

phone, who then can claim calls were made with an autodialer in violation of Section 227(b) without prior consent. 

As further addressed in Part IV below, this has created ‘‘gotcha’’ litigation, where 

someone signs up for a credit card with a friend’s telephone number, and then the 

friend sues for calls received, or where someone keeps acquiring dozens of new cellular telephone lines in the hopes of ‘‘striking it rich’’ with a phone number receiving 

calls from deep-pocket companies trying to reach the prior owner of the line.28 Because the private right of action in Section 227(b)(3) lacks the affirmative defenses 

that Congress intended should apply to legitimate businesses (whom it was known 

could be targets of litigation under Section 227(c)(5), which does have such defenses), TCPA plaintiffs and their lawyers argue that there is strict liability for all 

these calls placed without consent, regardless of the company’s good faith belief and 

adherence to practices meant to comply with the TCPA. 

One final note on the 1991 statute and the technology of that time: Text messages 

did not exist twenty-five years ago when the statute was drafted, nor did any 

phones capable of displaying such a message. However, some courts and now the 

FCC majority have decided that a text message is the same thing as a ‘‘call’’ to a 

cellular phone, and is subject to the $500 to $1,500 per communication liabilities 

under the TCPA for autodialed calls (even though Commissioner O’Rielly vehemently dissented to extending the TCPA to text messages).29 Many recent TCPA 

litigations focus on text messages—and even though companies ensure that a 

‘‘STOP’’ response to a text message will stop all future messages, a consumer has 

no obligation to ask for texts to ‘‘STOP’’, but instead can simply keep collecting messages until there are enough for his or her lawyer to make a hefty demand. It is 

difficult to imagine that Congress, had it conceived of text messages in 1991, would 

not have had separate provisions to address this very different kind of communication that so many consumers welcome for easy and quick delivery of information. 

It should be clear that the technological shift since 1991, particularly the advent 

of cellular phones and now smart phones, should have made portions of the TCPA 

inapplicable to such new technologies. However, the opposite has happened. While 

foreign-based scam telemarketers continue to barrage consumers with calls, legitimate domestic businesses find themselves targeted primarily for transactional and 

informational calls never intended to be subject to the TCPA’s restrictions—calls 

placed via modern technologies not contemplated by the TCPA. As Commissioner 

Pai has pointed out, this is something Congress should address: 

16 

30 July 2015 FCC Order, Pai Dissent, 30 FCC Rcd. at 8076. 31Gragg v. Orange Cab. Co., Inc., 995 F. Supp. 2d 1189, 1192–93 (W.D. Wash. 2014); see Hunt 

v. 21st Mortg. Corp., No. 2:12–cv–2697–WMA, 2013 WL 5230061, *4 (N.D. Ala. Sept. 17, 2013) 

(noting that, as, ‘‘in today’s world, the possibilities of modification and alteration are virtually 

limitless,’’ this reasoning would subject all iPhone owners to 47 U.S.C. § 227 as software potentially could be developed to allow their device to automatically transmit messages to groups of 

stored telephone numbers). 

Congress expressly targeted equipment that enables telemarketers to dial random or sequential numbers in the TCPA. If callers have abandoned that equipment, then the TCPA has accomplished the precise goal Congress set out for 

it. And if the FCC wishes to take action against newer technologies beyond the 

TCPA’s bailiwick, it must get express authorization from Congress—not make 

up the law as it goes along.30

But the FCC majority in issuing its recent July 2015 Order (now in litigation in 

the D.C. Circuit) instead continued to expand the reach of the TCPA, allowing litigation against businesses across all industries to proceed aggressively. 

III. Core Factors Driving TCPA Litigation Against Businesses 

For many years, as it was intended to do, TCPA litigation focused primarily on 

unsolicited marketing facsimile, DNC violations, and prerecorded cold-call telemarketing calls. Around 2010, however, there was a sea-change in TCPA litigation. 

I recall that year defending one client sued on a class action basis for fraud alert 

calls placed to cellular telephones alerting the recipient that he or she might be a 

victim of identity theft. I thought that as soon as I alerted plaintiff’s counsel that 

she had not received a marketing call, plaintiff would dismiss her lawsuit (as was 

usual); however, because the TCPA’s protections for cellular telephones did not specifically apply to ‘‘marketing’’ calls, and my client was a large and well-funded corporation, the litigation went forward with tens of millions of dollars in statutory 

damages in play for fraud alert calls placed in the previous four years. Plaintiff argued that she had not given her prior consent for a prerecorded message from my 

client, but only to the credit reporting agency. 

We did win in summary judgment, with the court recognizing that Plaintiff had 

requested fraud alert calls be placed to her cellular phone through an intermediary 

and that there was indeed ‘‘prior express consent’’ to receive said calls, but that victory required my client to take on the costs of eighteen months of hard-fought litigation. In the end, Plaintiff’s counsel walked away to file more TCPA lawsuits, only 

on the hook for my client’s costs (and not for the significant expenditures in attorneys’ fees, under the default American rule that leaves companies left holding the 

bag when a litigation ends). 

Before 2010, I defended just a few TCPA cases each year. By 2012, however, a 

critical mass of plaintiffs’ attorneys had discovered the TCPA and its uncapped statutory damages and saw the expansion of TCPA litigation as a legal ‘‘gold rush.’’ By 

that time, I had become an almost full-time TCPA defense lawyer. And, given the 

amount of TCPA litigation being filed across the country, law firms also started 

TCPA defense practice groups. Now, TCPA litigations consume significant court resources across the country. 

In my experience, TCPA actions have been fueled in the past few years primarily 

by the following four issues: 

a. ‘‘Capacity’’ to Autodial Remains Hotly Contested 

A debate continues as to whether ‘‘capacity,’’ as used in Section 227(b) of the statute, refers to a system’s present actual capacity, or includes a system’s potential capacity, and the FCC’s July 2015 Order only adds to the confusion. Under the FCC’s 

view, any telephone call placed with equipment that is not an old-fashioned rotary 

dial telephone may encourage plaintiffs’ lawyers to take a shot at a TCPA lawsuit. 

Some courts have rejected the theory that any technology with the potential capacity to store or produce and call telephone numbers using a random number generator constitutes an ATDS. For example, the Western District of Washington noted 

that such a conclusion would lead to ‘‘absurd results’’ and would ‘‘capture many of 

contemporary society’s most common technological devices within the statutory definition.’’ 31 But other courts have accepted the ‘‘potential’’ capacity argument forwarded by the plaintiffs’ bar. One judge in the Northern District of California, for 

example, has held that the question is ‘‘whether the dialing equipment’s present capacity is the determinative factor in classifying it as an ATDS, or whether the 

equipment’s potential capacity with hardware and/or software alterations should be 

considered, regardless of whether the potential capacity is utilized at the time the 

17 

32Mendoza v. UnitedHealth Grp. Inc., No. C13–1553 PJH, 2014 WL 722031, *2 (N.D. Cal. 

Jan. 6, 2014). 33 July 2015 FCC Order, O’Rielly Dissent, 30 FCC Rcd. at 8090. 34See Rubio’s Restaurant, Inc. Petition for Expedited Declaratory Ruling, CG Docket No. 02– 

278, at 3 (filed Aug. 11, 2015). 35See In the Matter of The Joint Petition Filed By DISH Network, LLC, the United States of 

America, and the States of California, Illinois. North Carolina, and Ohio for Declaratory Ruling 

Concerning the Telephone Consumer Protection Act (TCPA) Rules, Declaratory Order, CG Docket 

No. 11–50 (issued Apr. 13, 2013). 

calls are made.’’ 32 And the FCC majority refused, in its July 2015 Order, to find 

that ‘‘capacity’’ should reflect a system’s present and actual abilities, with challenges 

to that opinion now pending in the D.C. Circuit. 

Thus, there is no certainty for American businesses as to whether the expansion 

of the ‘‘ATDS’’ definition advocated by TCPA plaintiffs does indeed cover all modern, 

computerized systems used to dial telephone numbers or send text messages. A company whose employees are dialing calls that use any form of a computer in the process might find itself a target in a TCPA lawsuit, even when calls could not have 

been placed unless a human representative initiated the one-to-one call. To have uncapped statutory damages available that may or may not apply based on the interpretation of an undefined term in an outdated section of a Federal statute is an untenable situation for companies to find themselves in, when facing claims under the 

TCPA. 

b. Calls Made To Recycled Or Wrongly Provided Cell Phone Numbers Are Generating 

New Suits 

On a daily basis, companies across the country make calls or send texts to numbers provided to them by their customers, and prior express consent should exist 

for such communications even if they are made to cellular numbers with an 

‘‘autodialer’’ or if they provide information via a prerecorded message. However, cell 

phone numbers can easily be relinquished and reassigned without notice to anyone, 

let alone to the businesses that were provided the number as a point of contact by 

their customer. Indeed, every day, an estimated 100,000 cell phone numbers are reassigned to new users.33

Further, sometimes a customer makes a mistake when providing a contact number, or enters one belonging to a friend or roommate, or in these days of family 

plans, enters a number for a phone line shared with or later bequeathed to another 

family member. Then, when the company attempts to reach out to its customer at 

the provided number, it can unintentionally be sending communications to a noncustomer, i.e., the new or actual owner of the number. This seemingly innocent mistake has become the most significant driver of new TCPA litigations. Indeed, a statute intended to cover abusive telemarketing has morphed into one supporting claims 

against well-intentioned companies attempting to communicate with their own customers, generally for transactional or informational purposes. 

As another example, automated calls set up by a cell phone owner to be sent to 

his or her cellular phone as a text message can be received instead by a new cell 

phone owner if the prior owner forgets to turn off such requested messages relinquishing a phone line. One California restaurant chain’s automated voice-mail systems sent 876 food-safety-related text messages intended to reach one of its employees’ cell phones, after that employee had set a forwarding feature on his work telephone that was designed to message his own phone. However, after he changed 

numbers, those messages were unintentionally sent to the new owner of that telephone line.34 That restaurant was sued for over $500,000 in statutory damages, and 

after a protracted fight, the small restaurant chain informed me that it ended up 

settling for an undisclosed amount after incurring hundreds of thousands of dollars 

in defense costs to fight the allegations. Again, it is difficult to believe that Congress 

intended companies to be sued for ‘‘set it and forget it’’ messaging services set up 

by the prior owner of a phone line, once that line is recycled to a new owner. 

c. Vicarious Liability Theories Are Targeting New Defendants (In Particular, Those 

With Deep Pockets) 

Another driver of TCPA litigation is vicarious liability: it is no longer just the entity placing a call, sending a text, or faxing a document that needs worry about defending a TCPA lawsuit. In a 2013 Order long-anticipated by the plaintiffs’ bar, the 

FCC opined that vicarious liability could attach under the TCPA to companies who 

themselves had not initiated the communications in question, so long as the calls 

were placed ‘‘on behalf of’’ the company, using the Federal common law of agency.35

18 

36Gager v. Dell Financial Services, LLC, 727 F.3d 265, 272 (3d Cir. 2013). 37 Commissioner O’Rielly points out that the TCPA itself had no mention of revocation or a 

means to do so, and that the FCC majority has simply invented a vague and unworkable new 

‘‘common-law’’ based rule never vetted by Congress. See July 2015 Order, 30 FCC Rcd., O’Rielly 

Dissent, at 8095. 38For example, in April 2014, the Davis Law Firm of Jacksonville, Florida, posted an article 

providing 5 steps to ‘‘stop calls’’ from a targeted company and to potentially make money under 

the TCPA. See http://davispllc.com/lawyer/2014/04/16/Consumer-Protection/How-to-GetDirecTV-to-Stop-Calling-You-lbl12785.htm, last accessed November 6, 2014. Step 2 instructs 

cell phone owners to say ‘‘I revoke my consent for you to call me’’ and then to hang up. Thereafter, the firm asks the cell phone owner to keep a detailed call log regarding any additional 

calls to be the basis of a TCPA lawsuit. See id. 

Thus, a person or company can find itself defending a TCPA lawsuit with claims 

it is responsible for someone else’s decisions to communicate via phone, text, or fax. 

The FCC’s vicarious liability order invites the plaintiffs’ bar to reach up the chain 

to the defendant with the deepest possible pocket. This, in turn, has led to a dogpile 

of lawsuits being brought against security equipment manufacturers for calls mentioning their branded equipment (even when the calls were not made to sell that 

equipment, but rather the caller’s own $39.99 a month monitoring services). Further, lawsuits are being brought against major corporations for third-party calls 

made by independent contractors not authorized in any way to call as, or on behalf 

of, the company. 

And in the case of an employee gone rogue who violates the TCPA’s rules by 

breaking all of his own company’s policies, the company finds itself facing potentially annihilating liability if it loses on the vicarious liability fight, and enormous 

pressure to settle. One insurance company, for example, recently completed settlement of a $23 million class action that was brought by the recipient of a facsimile 

sent against company policy by an insurance agent who contracted on his own with 

a fax blaster to set up a server and send faxes in a home garage. When alleged vicarious liability for millions of faxes would be in the billions of dollars, it is easy 

to see how enormous the pressure to settle can be. And when there is a deep pocket 

defendant to put on the ropes, it is no wonder that the fax blaster who actually sent 

the faxes (after ensuring clients that such transmissions were legal) was not sued 

by the plaintiff. 

Companies are facing allegations of vicarious liability for calls and texts for which 

no source can even be ascertained; if a prerecorded marketing message promises a 

free gift card for a certain retailer, that retailer finds itself facing demands under 

the TCPA under the argument that it is liable under some ratification or apparent 

authority aspect of vicarious liability. 

d. Revocation of Prior Express Consent Also Driving New Lawsuits 

A fourth breeding ground for modern TCPA litigations is found in situations in 

which a company is calling its customer, at the customer-provided number, but then 

the recipient claims to have revoked consent for further calls. The Third Circuit 

stood alone in 2013 when it held that the TCPA provides consumers with the right 

to revoke their prior express consent to be contacted on cellular telephones by 

autodialing systems.36 Before this point, there were no revocation-based TCPA litigations; now, with the FCC majority stating in its July 2015 Order that prior consent can be revoked at any time and in any manner, claims that consent was revoked has become one of the fastest growing areas of TCPA litigation.37

The problem with allowing revocation by any means when larger businesses are 

making informational and/or transactional calls (sometimes through a variety of 

vendors) is that TCPA plaintiffs and their lawyers plan to generate suits by ‘‘revoking consent’’ for further calls with an oral statement, in the hopes that the customer 

representative does not capture that oral request.38 Other plaintiffs are sending convoluted text messages that a system might not recognize as a ‘‘STOP’’ message, and 

then claiming consent had been revoked. One demand I recently dealt with for a 

client involved someone who never replied ‘‘STOP’’ as the text messages instructed 

him to do whenever he wanted to opt out of the text reminders, and instead sent 

a wordy text message ‘‘withdrawing permission for future calls to his cellular phone 

number.’’ The system did not recognize this language, and in any case would only 

have been able to stop text messages and not phone calls; the determined consumer 

insisted that he had revoked consent for all communications, and was entitled to 

tens of thousands of dollars for later calls he received. 

Another issue with the newly announced ‘‘revocation’’ right is that the FCC majority implies that it should be instantaneous in implementation, without giving the 

business time to receive and process DNC requests from its vendors and/or to adjust 

its outbound calls. (In contrast, a business knows that DNC prohibitions attach to 

19 

39See 47 C.F.R. § 64.1200 (‘‘Persons or entities making calls for telemarketing purposes (or 

on whose behalf such calls are made) must honor a residential subscriber’s do-not-call request 

within a reasonable time from the date such request is made. This period may not exceed thirty 

days from the date of such request.’’). 40 July 2015 FCC Order, Pai Dissent, 30 FCC Rcd. at 8073. 

a number 30 days after it is entered into the DNC list.39) Thus, claims of ‘‘immediate’’ revocation rights are leading to even more ‘‘gotcha’’ litigation, including 

claims that a consumer revoked prior consent on a Monday morning but received 

three more calls over the next few days before all calls stopped—and that $4,500 

in willful calling damages for the three calls are thus owed to that consumer under 

the TCPA. 

Thus, revocation-based claims—like those claims based on ‘‘capacity’’ arguments, 

recycled or wrongly-provided numbers, and vicarious liability allegations—are certain to increase in number as TCPA litigation continues to grow exponentially 

throughout the country. Another certainty is that litigation abuse, too, will spread. 

IV. Examples of TCPA Litigation Abuse 

As I mentioned at the start of this testimony, I have defended various companies 

facing TCPA claims for more than a decade. As a junior associate in 2001, I began 

working on a then-rare TCPA case in which a client was sued for millions of faxes 

an affiliated company had sent in a three-day period using a fax blaster service. I 

was shocked to see a statute (which I had not heard anything about in law school) 

that could create such staggering statutory liability—my client settled for millions 

rather than face billions of dollars in statutory liability, and because its insurance 

policy covered the claims (something that is no longer the case). My introduction to 

the TCPA was during a time when the few lawsuits being brought still focused on 

the kinds of unsolicited facsimiles and cold-call telemarketing that the statute was 

intended to address when it was authored and adopted in 1991. But seeing just how 

lucrative TCPA lawsuits can be, various serial TCPA plaintiffs and TCPA-focused 

attorneys are doing everything they can to find and bring TCPA actions against 

American businesses. 

a. Serial TCPA Plaintiffs 

Serial plaintiffs amassing multiple phone numbers at which to receive calls are 

making a living through TCPA demands and litigation. Some focus on sending copious demand letters to businesses, seeking several thousand dollars from each company. An early example was a man in San Diego who acquired a telephone number 

of 619–999–9999, even though such telephone numbers were normally not given out 

to consumers—he found out that companies at the time whose systems required 

some telephone number be entered into a phone number field had set a default of 

the 999–9999 to fill in after an area code, and his number was getting thousands 

of calls each month from systems of various companies. As Commissioner Pai has 

noted, this man even hired staff to log every wrong-number call he received, issue 

demand letters to purported violators, file actions, and negotiate settlements; only 

after he was the lead plaintiff in over 600 lawsuits did the courts finally agree that 

he was a ‘‘vexatious litigant.’’ 40 But what Commissioner Pai does not know (and I 

do, as I was brought in to deal with later demands from the phone’s new ‘‘owner’’ 

after this man was barred from his ‘‘TCPA business’’), is that the man then leased 

this telephone number to a friend who started her own business, paying commissions to the owner of the 999–9999 number for the calls she received and acting 

with her part-time staff of paralegal support to send TCPA demand letters to hundreds of businesses. It was only after this contract came to light that her ‘‘TCPA 

business’’, too, was finally shuttered. 

But other consumers in the business of TCPA actions continue to make their living (and a good living, too) through this statute. For example, in the past year 

alone, one Pennsylvania woman has filed at least eleven (11) TCPA cases in the 

Western District of Pennsylvania and at least twenty (20) pre-litigation demand letters. When a company she had sued deposed her recently, it found that she had intentionally bought 35 cell phones and subscribed to cellular service lines for the sole 

purpose of receiving calls under which she can assert ‘‘wrong number’’ TCPA violations. Moreover, she specifically sought phone numbers in economically depressed 

area codes to make the receipt of collections calls more likely (i.e., she lives in PA, 

but acquires FL area code numbers). She carries all 35 plus phones with her when 

she travels so she can keep up on her recordkeeping—she logs all calls coming into 

the telephone numbers in efforts to reach the previous owner of the cellular phone. 

And she even loads more minutes as needed onto her phones to ensure she keeps 

the lines open for business. 

20 

41See Reply Comments of the U.S. Chamber of Commerce, CG Docket 02–278, at 4 (filed Dec. 

1, 2014) (citing Lawsuit Abuse? There’s an App for That, U.S. Chamber Institute for Legal Reform (Oct. 29, 2014), http://www.instituteforlegalreform.com/resource/lawsuit-abuse-theres-anapp-for-that/). 42 Id. 43See, e.g., Amended Answer, Affirmative Defenses, and Counterclaim, Dkt. No. 32, Filed 11/ 

12/15, in Lemberg Law, LLC v. Tammy Hussin and the Hussin Law Offices, P.C., Case No. 3:15– 

cv–00737–MPS (D. Conn), at ¶¶ 1.k, 1.l, 1.o, and 1.p; see also 1.p (‘‘Based on Hussin’s belief that 

her paralegal had confirmed the facts with the new clients, Hussin unknowingly filed complaints 

on behalf of Californians who were unaware of legal representation.’’). 

Another constant TCPA litigant, an Ohio man, has been bringing TCPA actions 

for fifteen years, and in recent years he has lent his name to actions in Federal 

court outside of Ohio as well, including in Wisconsin, Florida, Illinois, New York, 

West Virginia, California, and Connecticut. As an example of one recent suit, this 

consumer was the named plaintiff in a TCPA action settled by American Electric 

Power in 2015. He received two (2) marketing phone calls while on the Federal DNC 

(entitling him to up to $1,500 for the second call, if the company had no valid defenses), but his named-plaintiff incentive payment under the settlement is $12,500. 

Tellingly, this man’s actual registration on the DNC list only happened ten years 

into his TCPA career. Because it was so clear he wanted marketing calls (and was 

making his living by receiving them), he was ordered by one state court in 2005 to 

register his phone lines with the Federal DNC, but he appealed that order to the 

Ohio Supreme Court, which held in 2007 that he was not required to register his 

telephone numbers. Later, with the shift in TCPA litigation to autodialed/ 

prerecorded calls, he registered his lines (via a settlement in 2011) and now sues 

for autodial/prerecorded calls, as well as violations of his registered Federal DNC 

status. Like many persons supplementing their incomes or fully depending on TCPA 

monies, he has the usual mechanisms for trapping callers (recordings and logs) and 

generating demand letters. 

Indeed, there are plenty of ‘‘do-it-yourself’’ guides on the Internet advising consumers how to bring TCPA claims and rake in significant money. What businesses 

are finding problematic in the past few years lawsuits and demands brought by family members, roommates, or partners of a customer who gave that person’s telephone number as his or her own. In actions I am currently defending for various 

companies, the plaintiff or class plaintiff is the daughter, the aunt, the boyfriend, 

the son, the mother-in-law, or the guardian of the customer who provided their telephone number to a company as his or her own number. There are indications that 

some such provisions are happening on purpose, to try to create viable fact patterns 

for a TCPA claim by that family member or friend. Indeed, I had one recent demand 

letter in which the telephone number the customer provided actually belonged to a 

well-known TCPA lawyer, who then of course threatened suit and demanded payment of thousands of dollars. 

The consumers abusing the statute to ensure that calls are placed to them, so that 

they can support themselves from demands and lawsuits filed against American 

businesses, are bad enough; as detailed below, the tactics of some of the lawyers 

specializing in TCPA claims are even worse. 

b. Over-incentivized TCPA Attorneys 

As already detailed above, the TCPA (which has no attorneys’ fees provision) provides for hefty statutory damages that incentivize attorneys to start litigations and 

carve fees out of the uncapped statutory damages that are available. One Connecticut-based firm, Lemberg Law, LLC, even came out with a smartphone application, ‘‘Block Calls, Get Cash,’’ that potential clients could download to make their 

call data directly available to the firm, which could review inbound calls to look for 

potential litigation targets.41 The app’s website states that ‘‘with no out-of-pocket 

cost for the app or legal fees, its users will ‘laugh all the way to the bank.’ ’’ 42 And 

at least one other firm has followed suit with its own competing application. 

Lemberg Law is now engaged in litigation with an associate who withdrew to 

start up her own lucrative TCPA shop, and its business practices are being revealed. 

In counterclaims against Lemberg Law, which sued the associate for absconding 

with clients and the settlement monies they could engender, she claims that demands are filed by Lemberg Law for consumers who have no idea that they have 

‘‘retained’’ a law firm to represent them and who were not even consulted about 

complaints filed on their behalves.43 In fact, the former associate claims that the 

first time some of these consumers find out about their own lawsuit is when 

Lemberg tries to contact the client to send them their portion of a settlement agreement (after accessing the consumer’s private phone call information, crafting deVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00024 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
21 

44See, e.g., id. at Affirmative Defenses, ¶¶ 1.f, 1.g, 1.k; see also 1.s (‘‘Lemberg insisted on taking a 40 percent referral fee for new ‘‘clients’ without even having discussed legal representation 

with them and without having obtained a signed fee agreement. Upon reaching the new ‘‘clients’’ 

when Hussin transferred the cases to her firm, most of them had no knowledge of Lemberg’s 

firm and were unaware of legal representation, yet Lemberg insisted on taking a 40 percent referral fee on said cases.’’). 45 Bridgeview Health Care Center, Ltd. v. Jerry Clark, 2016 WL 10852333, *5 (7th Cir. 

Mar. 21, 2016) (emphasis added; internal citations and quotations omitted). 

mands based on calls, and carving out Lemberg’s own fees and costs, including a 

$595 ‘‘PrivacyStar’’ Cost).44

As just one more example of many, Anderson & Wanca is a Midwest-based firm 

focused on bringing facsimile actions after receiving, in discovery years ago, a roster 

of clients from a fax-blaster named B2B. In a recent decision, the Seventh Circuit 

upheld $16,000 worth of statutory damages against a small digital hearing aid company in Terra Haute, Indiana, for 32 facsimile ads, but noted its distaste in doing 

so: 

Fax paper and ink were once expensive, and this may be why Congress enacted 

the TCPA, but they are not costly today. As a result, what motivates TCPA 

suits is not simply the fact that an unrequested ad arrived on a fax machine. 

Instead, there is evidence that the pervasive nature of junk-fax litigation is best 

explained this way: it has blossomed into a national cash cow for plaintiff’s attorneys specializing in TCPA disputes. We doubt that Congress intended the 

TCPA, which it crafted as a consumer-protection law, to become the means of 

targeting small businesses. Yet in practice, the TCPA is nailing the little guy, 

while plaintiffs’ attorneys take a big cut. Plaintiffs’ counsel in this case admitted, at oral argument, that they obtained B2B’s hard drive and used information on it to find plaintiffs. They currently have about 100 TCPA suits pending.45

As the Seventh Circuit has recognized in its recent decision quoted above, it is 

a perversion of the original intent of the TCPA to ‘‘target small businesses’’ who are 

not alleged to have caused actual harm. And I should note that Anderson & Wanca 

is not always so unlucky as to only get $16,000 verdicts; that firm has been the recipient of multi-million dollar fees awards in the past few years from class action 

settlements as well. 

V. Conclusion and Recommendations 

The TCPA was designed to protect privacy and to stop invasive and persistent 

telemarketing, primarily of the ‘‘cold call’’ kind, that ensues when telemarketers use 

dialing technology to randomly or sequentially dial numbers. It was not designed 

to subject companies to claims regarding ‘‘autodialed’’ calls when they reach out to 

targeted, segmented lists of their own customers who have a common need for information using the telephone numbers (including cellular phone numbers) provided by 

those customers. It was not intended to apply to text messages, and it was not designed to cover collections calls, which have independent sets of rules to ensure that 

those calls are not abusive or overly intrusive. 

Congress needs to take a hard look at updating the TCPA in a manner that provides more certainty and protection for businesses who need to legitimately communicate with their customers and employees, and who strive to comply with the law 

but who, for example, may unknowingly be calling a reassigned number, or have 

a customer representative err in recording a revocation request. If Congress wishes 

to pull text messages into the TCPA’s protection, then it should assess what rules 

should apply. 

In sum, considering the unfair and unintended onslaught of TCPA cases hammering American businesses, the following updates to the statute could be taken 

under consideration. 

Statute of Limitations: The TCPA contains no statute of limitations, and so has 

fallen into the four-year default, which makes no sense for calls/faxes that are supposedly invasions of privacy that the consumer knows about at the moment they are 

placed. Class actions reach staggering amounts of damages because class plaintiffs 

seek four years’ worth of calling data and liability. (I defended one putative class 

action brought against a company for a single text sent three years and ten months 

before Plaintiff filed his suit.) The TCPA’s time to bring suit should be reasonably 

22 

46See, e.g., Electronic Funds Transfer Act (15 U.S.C. § 1693), Section 1693(m) (statute of limitations—1 year); Fair Debt Collection Practices Act (15 U.S.C. § 1692), Section 1692(k) (statute 

of limitations—1 year). 47See, e.g., Electronic Funds Transfer Act (15 U.S.C. § 1693), Section 1693(m); Fair Debt Collection Practices Act (15 U.S.C. § 1692), Section 1692(k); Truth in Lending Act (15 U.S.C. § 1631 

et. al), Section 1640; Fair Credit Reporting Act (15 U.S.C. § 1681 et. al.), Section 1681(o). (Several of these statutes also permit defendants to recover costs/fees when actions are shown to 

have been brought in bad faith.) 

limited, as is the case with the other Federal statutes providing private rights of 

action for statutory damages.46

Capping Statutory Damages and Adding Provisions for Reasonable Attorneys’ 

Fees: Like every other Federal statute providing statutory damages and a private 

right of action to consumers to seek those damages, the TCPA should have a cap 

on the amount of individual and class action damages that can be sought.47 There 

is no better way to curb litigation abuse, bring the TCPA in line with its sister statutes, and avoid unconstitutional and excessive fines for technical violations causing 

no actual harm. 

Affirmative Defenses: As businesses are targeted for calls under Section 227(b), as 

well as for the 227(c) calls that Congress knew could be made in error by a business 

acting in good faith to follow the appropriate policies and procedures (see Part II 

above), the affirmative defenses available in Section 227(c) should also be imported 

into Section 227(b) to provide protection to businesses working in good faith to comply with the TCPA. 

Capacity: The ‘‘capacity’’ of an autodialer should be interpreted for past calls as 

written in the text of the statute, meaning only those devices that have the actual 

ability to randomly/sequentially dial telephone calls would be actionable. And if 

Congress wishes to limit some other sort of calling technologies or text messages, 

new and more precise language should be drafted, vetted, and implemented after 

a notice period to companies so that they can comply with statutory requirements. 

Reassigned or Wrongly-Provided Number: Businesses should not be punished via 

TCPA lawsuits when they, in good faith, call a customer-provided phone number 

that now belongs to a new party unless and until the recipient informs the caller 

that the number is wrong and the business has a reasonable time to implement that 

change in its records. (If, after that notice and reasonable time the company continues to call, then lack of prior consent would be established for future calls.) 

Vicarious Liability: The FCC has interpreted the TCPA to allow ‘‘on behalf of’’ liability for prerecorded/autodialed calls, something not specifically provided for in the 

statute. Among other things, the TCPA should be revised to define any such vicarious liability so that it would exist only against the appropriate entities—those persons who place the calls, or who retain a telemarketer to place calls, or who authorize an agent to place calls on their behalf. 

Bad Actors: The TCPA should be reformed to focus on the actual bad actors (i.e., 

fraudulent calls from ‘‘Rachel from Cardmember Services’’, with spoofed numbers in 

Caller ID fields to hide the identity of caller), instead of companies trying to contact 

their consumers for a legitimate business purposes. 

Address New Technologies, Such As Text Messaging: A text message is not the 

same as a call, and courts are wrong in treating them equally. Should Congress 

wish to set rules on text messaging within the TCPA, it should do so through the 

regular channels of drafting, vetting, and implementing new statutory language. 

Revocation: If a consumer that has provided a telephone number to a company 

no longer wishes to receive communications at that number, there should be a set 

process (as in the Fair Debt Collection Practices Act) on how the business should 

be told of the revocation, and a reasonable time for the company to implement that 

change. 

Importantly, when considering these changes, Congress should keep in mind what 

TCPA reform should not include policies that will: 

• Increase in the number of phone solicitations; 

• Encourage abusive or harassing debt collection practices (which are addressed, 

in any case, by the FDCPA); and 

• Create an end-run around the Federal and Internal Do Not Call List rules. 

The changes discussed above—which would help to protect American companies 

from expensive and damaging litigation abuse—would not risk any of these repercussions. Thus, we urge this Committee to revisit the TCPA to bring this 20th Century statute in line with 21st Century challenges. Twenty-five years have passed, 

and it is evident that the TCPA has had a negative impact on businesses that Congress never intended when first enacting this law in 1991. We appreciate the ComVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00026 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
23 

mittee’s calling of today’s hearing and stand ready to work with you on this important issue. 

****** 

Thank you for inviting me to testify. I am happy to answer any questions you may 

have. 

The CHAIRMAN. Thank you, Ms. Wahlquist. 

Ms. Saunders. 

Ms. Saunders’s oral remarks at this May 18, 2016, hearing and written prepared 

statement submitted to the Committee before the hearing follow. 

On May 20, 2016, Ms. Saunders wrote to the Committee and noted that she had 

‘‘referred to the incorrect row of figures supplied by the FTC. As a result, in those 

parts of my testimony discussing the number of complaints to the FTC about 

robocalls, my numbers were slightly off.’’ 

Here are Ms. Saunders corrections: 

• There were 2,200,000 complaints about robocalls to the FTC (not 3,500,000) in 

2015. 

• There were an average of 184,000 complaints to the FTC about robocalls each 

month (not 298,000) that year. 

• Complaint numbers have spiked in the first four months of 2016 which when 

annualized indicate that there may be 3,300,000 complaints to the FTC about 

robocalls in 2016 (not 5,200,000 complaints). 

• For every 1,000 complaints to the FTC, less than two (not ‘‘only one’’) lawsuits 

are filed. Most consumers who receive robocalls do not take the time to complain to a Federal agency and even a tinier percentage, less than two-tenths of 

1 percent (not one-tenth of 1 percent) actually files a lawsuit. 

STATEMENT OF MARGOT SAUNDERS, OF COUNSEL, 

NATIONAL CONSUMER LAW CENTER 

Ms. SAUNDERS. Chairman Thune, Senator Nelson, Senator Markey, members of the Committee, thank you very much for inviting 

me to testify today on behalf of the National Consumer Law Center 

and eight other national groups that collectively represent millions 

of American consumers. We believe that robocalls pose a severe 

problem, and we ask that you defend the TCPA and work to 

strengthen it. 

Twenty-five years ago, the TCPA was passed because of the complaints about one line of robocalls which are still pouring in. The 

problem is that robocalls cost only a tiny fraction of a penny per 

call, making it cheaper for businesses to make the calls than to be 

careful about who they’re calling. 

The TCPA was designed to ensure that consumers control who 

robocalls them on their cell phone by requiring express consent before the calls can be made, unless there is an emergency. And 

many of the examples that Senator Thune made of—raised were 

emergencies that should fall under the exception already in the 

law. 

The industry is making extravagant claims about spurious lawsuits and wrongful class-actions, churning new claims, litigating 

TCPA—in TCPA litigation, all to support their insistence that the 

law be changed. Yet, the judicial system has a—robust mechanisms 

to protect against meritless claims. As TCPA claims don’t lead to 

attorneys’ fees, the costs of initiating, investigating, and litigating 

a lawsuit already restricts these cases only to those in which numerous illegal calls have been made. 

24 

In 2015, there were over three and a half million complaints to 

the FTC, far more than any other issue for robocalls. For every 

1,000 complaints, only one lawsuit was filed. Most consumers 

who’ve received unwanted robocalls don’t complain to a Federal 

agency. Only one-tenth of 1 percent of those that did complain 

filed. 

Here are a few of many examples of the cases brought to stop 

the unwanted barrage of robocalls: Yahoo sent 27,000 wrong-number text messages to one consumer, refusing to stop even after the 

FCC got involved to ask them to stop. State Farm Bank made 327 

robocalls to one consumer in 6 months, seeking to collect a debt 

owed by someone else. Time Warner Cable used an automated system involving zero human capacity to make 153 robocalls to a 

woman who had never been a customer, including 74 calls made 

after she filed suit. 

In all of these cases, business entities set loose an automated 

system that called the consumer’s phone multiple times, even after 

the consumer’s repeated attempts to stop the calls. In each case, 

the caller had decided that it was simply more cost-effective to ignore the expressed wishes of these consumers and continue to 

make these automated calls. 

Seventy million people, approximately, rely in this country on 

prepaid or lifeline cell phones which only provide a fixed number 

of minutes. Many of these consumers are low-income, and they rely 

on these limited minutes for essential calls. And unwanted 

robocalls eat into these essential minutes. Any one of the industry 

proposals would lead to the receipt of more unwanted robocalls to 

all cell phone users, and would be devastating to these users with 

limited minutes. 

For example, the industry argues that the FCC’s longstanding 

definition of ‘‘autodialer’’ is wrong, based on the notion that the 

current definition covers too many instruments, thus making the 

distinction effectively meaningless. But, the definition the industry 

proposes would exclude all of the technology that’s currently being 

used to make calls. 

Unfortunately, Section 301 of the Budget Act passed last October 

to create an exemption to the TCPA that permits collectors of Federal debt, primarily student loan borrowers and—as well as taxpayers pursued by private collectors to be made without the consent of the consumer. This is dangerous precedent that will impact 

over 61 million Americans, and it should be repealed. We strongly 

support the HANGUP Act, which repeals Section 301. It is evident 

the consumers need more protection from such abuses, not less. 

Continued enforcement of the TCPA is critical, and we ask that 

you support consumers in this battle. 

Thank you. 

[The prepared statement of Ms. Saunders follows:] 

25 

1The National Consumer Law Center (NCLC) is a non-profit corporation founded in 1969 to 

assist legal services, consumer law attorneys, consumer advocates and public policy makers in 

using the powerful and complex tools of consumer law for just and fair treatment for all in the 

economic marketplace. NCLC has expertise in protecting low-income customer access to telecommunications, energy and water services in proceedings at state utility commissions, the FCC 

and FERC. We publish and annually supplement nineteen practice treatises that describe the 

law currently applicable to all types of consumer transactions, including Access to Utility Service 

(5th ed. 2011), covering telecommunications generally, and Federal Deception Law (2d ed. 2016), 

which includes a chapter on the Telephone Consumer Protection Act. 2 A description of all the groups on whose behalf this testimony is provided is included in an 

Appendix. 3 Rage Against Robocalls, Consumer Reports (July 28, 2015) [hereinafter Rage Against 

Robocalls], available at http://www.consumerreports.org/cro/magazine/2015/07/rage-againstrobocalls/index.htm. 4Federal Trade Commission, National Do Not Call Registry Data Book, FY 2015, at 5 (Nov. 

2015). 5 Rage Against Robocalls. 

6Federal Trade Commission, National Do Not Call Registry Data Book, FY 2015, at 4 (Nov. 

2015). 7Federal Trade Commission, National Do Not Call Registry Data Book, FY 2015, at 5 (Nov. 

2015). 8The 2016 figures for robocall complaints to the FTC’s Do Not Call Registry were supplied 

by the FTC’s Bureau of Consumer Protection on May 12, 2016. The 2016 annualized complaint 

data was determined by averaging the total complaints received in the first four months and 

then multiplying that monthly average by twelve. 

PREPARED STATEMENT OF MARGOT FREEMAN SAUNDERS, OF COUNSEL, NATIONAL

CONSUMER LAW CENTER, ON BEHALF OF THE LOW-INCOME CLIENTS OF THE

NATIONAL CONSUMER LAW CENTER, AND AMERICANS FOR FINANCIAL REFORM, 

CENTER FOR RESPONSIBLE LENDING, CONSUMER ACTION, CONSUMER FEDERATION

OF AMERICA, CONSUMERS UNION, NATIONAL ASSOCIATION OF CONSUMER

ADVOCATES, NATIONAL CENTER FOR LAW AND ECONOMIC JUSTICE, PUBLIC CITIZEN, 

AND MFY LEGAL SERVICES

Chairman Thune, Senator Nelson, and Members of the Committee, I appreciate 

the opportunity to testify today on the importance of maintaining the integrity of 

the Telephone Consumer Protection Act (TCPA) for consumers. I provide my testimony here today on behalf of the low-income clients of the National Consumer Law 

Center 1 (NCLC), as well as Americans for Financial Reform, Center for Responsible 

Lending, Consumer Action, Consumer Federation of America, Consumers Union, National Association of Consumer Advocates, National Center for Law and Economic 

Justice, Public Citizen, and MFY Legal Services.2

I am here today, on behalf of the millions of consumers whom we represent, to 

ask you to defend and strengthen the Telephone Consumer Protection Act as an essential bulwark against unwanted, annoying, harassing, and even dangerous, 

robocalls. 

‘‘If robocalls were a disease, they would be an epidemic.’’ 3 An average of 298,000 

complaints were made to the Federal Trade Commission (FTC) every month in 2015 

about robocalls.4 Indeed, some estimate that 35 percent of all calls placed in the 

U.S. are robocalls.5 The problem is escalating: the FTC reported more than 3.5 million complaints about unwanted calls in 2015—over twice as many complaints as 

there were in 2010.6 Almost half of these calls (1,823,897) occurred after the consumer had already requested that the company stop calling.7 Indeed, in the first 

four months of 2016, the complaint numbers have spiked again, increasing to an average of over 440,000 a month, which will produce a yearly rate of over 5.2 million 

complaints.8

26 

9 47 U.S.C. § 227. 

10Mims v. Arrow Fin. Servs., L.L.C., 132 S. Ct. 740, 744 (2012). 11See e.g., Call-Em-All Pricing, which quotes pricing from a high of 6 cents per call to $7.50 

per month ‘‘for one inclusive monthly fee. Call and text as much as you need.’’ https://www.callem-all.com/pricing, (last accessed May 13, 2016).44, 73 12 In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 

CG Docket No. 02–278, Report and Order, 30 FCC Rcd. 7961 (2015) [hereinafter 2015 TCPA 

Declaratory Ruling and Order]. 

Congress passed the Telephone Consumer Protection Act 9 (TCPA) in 1991 in direct response to ‘‘[v]oluminous consumer complaints about abuses of telephone technology—for example, computerized calls dispatched to private homes.’’ 10 Yet 25 

years later, the complaints are still pouring in. Robocalls are very inexpensive to 

make. Both legitimate callers and bad actors can discharge tens of millions of 

robocalls over the course of a day at a fraction of a penny per call.11 The TCPA 

needs to be strengthened. 

The problem of unwanted and harassing robocalls is growing worse. No one likes 

robocalls. Consumers in every district and every state are complaining. The current 

structure of the TCPA does provide some protection, but it does not provide enough. 

In this testimony I will cover the following topics: 

1. The role that the Telephone Consumer Protection Act plays in protecting consumers from unwanted and invasive calls and texts to cell phones. 

2. The reasons why the FCC’s 2015 Omnibus Order 12 on the TCPA was correct. 

3. The importance of passing the HANGUP Act. 

4. Needed additions to Federal law to deal with abusive robocalling to consumers. 

5. A real fix for the reassigned number problem. 

6. Vicarious liability rules under the TCPA are appropriate. 

1. The Telephone Consumer Protection Act provides consumers critically 

important protections from unwanted and invasive calls and texts to 

cell phones. 

Privacy Concerns. The TCPA is an essential privacy protection law, intended to 

protect consumers from the intrusions of unwanted automated and prerecorded calls 


518SAUND1.eps
27 

13 Congress amended the TCPA in 2015 to allow calls to be made without consent to collect 

a debt owed to or guaranteed by the United States, subject to regulations issued by the FCC. 

Pub. L. No. 114–74, 129 Stat. 584 (2015) (§ 301). 14 47 U.S.C. § 227(b)(1)(A)(iii). 15TCPA, Pub. L. No. 102–243, 105 Stat. 2394 (1991) §§ 12–13. 16See Stephen Blumberg and Julian Luke, U.S. Dep’t of Health and Human Services, National Center for Health Statistics, Wireless Substitution: Early Release of Estimates From the 

National Health Interview Survey, July–December 2014, at 6 (June 2015). 17Federal Communications Commission, Annual Report and Analysis of Competitive Market 

Conditions With Respect to Mobile Wireless, Eighteenth Report, WT Docket No. 15–125, ¶¶ 44, 

73, 95, 96 (Dec. 23, 2015). 18 Universal Service Administrative Company, 2014 Annual Report 9 (2014). 19Federal Communications Commission, Second Further Notice of Proposed Rulemaking, 

Order on Reconsideration, Second Report and Order, and Memorandum Opinion and Order 15– 

71, ¶ 16 (Rel. June 22, 2015). 20See U.S. Dep’t of Transportation, Facts and Statistics, available at http://www.dis 

traction.gov/stats-research-laws/facts-and-statistics.html (last accessed Jan. 14, 2016) (citing 

3,154 deaths and 424,000 injuries from distracted drivers in 2013, and noting that text messaging, because of the visual, manual, and cognitive attention required from the driver, is ‘‘by 

far the most alarming distraction’’). See also Injury Prevention & Control: Motor Vehicle Safety: 

Distracted Driving, Centers for Disease Control and Prevention, available at http:// 

www.cdc.gov/motorvehiclesafety/distractedldriving/ (last accessed Jan. 14, 2016) (‘‘Each day 

Continued 

to cell phones. But for the exception created in the Budget Act last October,13 the 

TCPA permits these calls only if the consumer has given ‘‘prior express consent’’ to 

receive them.14 Calls for emergency purposes are excluded from this prohibition. 

When it enacted the TCPA in 1991, Congress found that automated and prerecorded 

calls are ‘‘a nuisance and an invasion of privacy, regardless of the type of call 

. . .’’ 15 They are no less a nuisance and an invasion of privacy today. 

Heavy impact on struggling households. Many people in the United States today 

rely exclusively on their cell phones as their only means of communication. These 

consumers include: 

• Close to 70 percent of adults aged 25–29 and over 67 percent of adults aged 

30–34; 

• Nearly 60 percent of persons in households below the poverty line; 

• 59 percent of Hispanics and Latinos, and 46 percent of African Americans.16

Many, if not most, of the households living below the poverty line rely on payas-you-go, limited-minute prepaid wireless products. These wireless plans have been 

growing in use, especially among low-income consumers and consumers with poor 

credit profiles.17 These prepaid wireless products provide a fixed number of minutes, 

and often a fixed number of texts. After these limits are exceeded, consumers must 

purchase a package of new minutes periodically to maintain their service. Consumers in such plans are billed for incoming calls in addition to outgoing calls, making them very sensitive to repetitive incoming calls—especially calls that they do not 

want. 

Additionally, almost 12.5 million low-income households maintain essential telephone service through the Federal Lifeline Assistance Program.18 Most of these 

Lifeline participants have service through a prepaid wireless Lifeline Program, 

which most commonly limits usage to only 250 minutes a month for the entire 

household.19

Allowing calls without the consent of the person called, limiting the right to revoke consent, or curbing the definition of autodialer—all proposals made by the calling industry in repeated filings before the FCC—would be devastating for households struggling to afford essential telephone service. Any one of these changes 

would lead to the receipt of more unwanted and unconsented-to calls that would further deplete the scarce minutes available for the Lifeline household. For the lowerincome consumers and households that struggle to afford telephone service, any one 

of these changes would use up the minutes on which the entire Lifeline household 

depends to access health care, transportation, emergency, and other essential services, and to avoid social isolation. 

Public safety threatened. Cell phones accompany people wherever they go, including in cars. Too often, calls and texts are answered while people are driving because 

so many cannot resist the imperious ring of the wireless telephone. Receiving cell 

phone calls while driving threatens public safety. The National Highway Traffic 

Safety Administration found that cell phone use contributed to 995 (or 18 percent) 

of fatalities in distraction-related crashes in 2009. More robocalls will inevitably 

lead to more distracted drivers and, inescapably, more accidents.20

28 

in the United States, more than 9 people are killed and more than 1,153 people are injured in 

crashes that are reported to involve a distracted driver.’’). 21See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 

1991, CG Docket No. 02–278 Report and Order, 18 FCC Rcd. 14014 (2003) (¶ 165). 22Frank Newport, The New Era of Communication Among Americans, Gallup (Nov. 10, 2014), 

available at http://www.gallup.com/poll/179288/new-era-communication-americans.aspx. 23 629 Fed. Appx. 369 (3d Cir. 2015). 24 746 F.3d 1242 (11th Cir. 2014). 25 727 F.3d 265 (3d Cir. 2013). 26 113 F. Supp. 3d 718 (S.D.N.Y. 2015), appeal filed, No. 15–2474 (2d Cir. Aug. 6, 2015). 27 57 F. Supp. 3d 639 (N.D. W. Va. 2014). 28 2013 WL 6185233 (W.D. Wash. Nov. 26, 2013). 29 956 F. Supp. 2d 962 (W.D. Wis. 2013). 30 629 Fed. Appx. at 371. 31 113 F. Supp. 3d at 722, 725. 32 57 F. Supp. 3d at 652–55. 33 746 F.3d at 1252. 34 113 F. Supp. 3d 718 at 722, 725. 35 57 F. Supp. 3d at 648–49. 36 746 F.3d at 1255–56. 37 727 F.3d at 272. 

Texts are as intrusive as calls. The TCPA’s prohibitions against unwanted communications apply to both phone calls and texts.21 This is because text messages are 

just as intrusive and costly to consumers as phone calls. And, particularly for lowincome consumers using prepaid wireless plans, the unwanted texts deplete the limited data they pay for and rely on. 

As noted in a recent Gallup study: ‘‘Texting, using a cellphone and sending and 

reading e-mail messages are the most frequently used forms of non-personal communication for adult Americans.’’ 22 As Americans’ use of texts as a regular means 

of communication increases, unwanted texts become more and more invasive. People 

now respond to text messages in the same reflexive way they respond to calls—the 

beep of a text demands an immediate acknowledgment. As a result, autodialed texts 

that arrive in droves interrupt, annoy and harass consumers just as robodialed calls 

do. And these unwelcome texts use up precious limits for consumers whose cell 

phone plans impose restrictions, such as those consumers on prepaid or Lifeline 

plans. 

Litigation protects consumers and is justified by the number of complaints about 

robocalls. In addition to the hundreds of thousands of complaints made monthly to 

government agencies, a tiny percentage of consumers who are plagued with repeated 

and unwanted robocalls and prerecorded calls do file suit. A small selection of cases 

illustrates just some of the abuses to which consumers have been subjected: 

• Dominguez v. Yahoo, Inc.23—Yahoo sent 27,809 wrong number text messages 

in 17 months to this consumer, and refused to stop even after the consumer’s 

many pleas. 

• Osorio v. State Farm Bank24—327 robocalls to the consumer’s cell phone in 6 

months, all seeking to collect on a debt owed by someone else. 

• Gager v. Dell Fin. Servs., L.L.C.,25—40 robocalls to the consumer’s cell phone 

in 3 weeks, even after she asked the company to stop robocalling. 

• King v. Time Warner Cable,26—An automated system for debt collection calls 

involving zero human intervention or review resulted in 153 robocalls to a 

woman who had never been a customer. The calls continued even after she informed Time Warner of its error and asked it to stop calling, including 74 additional robocalls after she filed suit. 

• Moore v. Dish Network L.L.C,27—31 robocalls in 7 months to the cell phone of 

a low-income consumer using a Lifeline support phone, even after he repeatedly 

told the company it had the wrong number and to stop calling. 

• Munro v. King Broadcasting Co.28—Hundreds of text messages despite the consumer’s dozens of requests for the company to stop. 

• Beal v. Wyndham Vacation Resorts, Inc.29—Dozens of robocalls to the consumer’s cell phone, which continued even after her repeated requests to stop 

calling. 

In these cases, and in a number of filings before the FCC, the defendants argued 

that the technology used to make the multiple calls did not fit the definition of an 

autodialer under the statute (see Dominguez;30 King;31 Moore 32); that the statutory 

term ‘‘called party’’ should be construed to allow calls to a number given by, and 

formerly assigned to, a different person (the ‘‘intended party’’) (see Osorio,33 King,34

Moore 35); and that the consumer could not revoke consent (see Osorio;36 Gager;37

29 

38 113 F. Supp. 3d 718 at 726. 39 956 F. Supp. 2d at 977. 40 2013 WL 6185233, at *3–4. 41See 2015 TCPA Declaratory Ruling and Order ¶ 1. 42Federal Trade Commission, National Do Not Call Registry Data Book, FY 2015, at 4 (2015). 43See WebRecon, Out Like a Lion . . . Debt Collection Litigation & CFPB Complaint Statistics, Dec 2015 & Year in Review, available at: http://webrecon.com/out-like-a-lion-debt-collection-litigation-cfpb-complaint-statistics-dec-2015-year-in-review/#sthash.m8WYbAKa.dpuf. 44 629 Fed. Appx. at 371. 45 47 U.S.C. § 227(b)(3)(C). 

King;38 Beal;39 Munro 40). If the FCC’s position had not been sustained in those 

cases, or if it had been changed by statute, nothing would prevent callers like these 

from continuing the unwanted calls. 

In all of these cases, a business entity set loose an automated system that called 

a consumer’s cell phone multiple times, even after the consumer’s repeated attempts 

to stop the calls. In each case, the caller had simply decided that it was more costeffective to ignore the clearly expressed wishes of these consumers and continue to 

make these automated calls and texts. 

It is evident that consumers need more protection from such abuses, not less. The 

sheer number of calls a single caller with an autodialer can generate is staggering. 

The figures exemplify why robust interpretation and continued enforcement of the 

TCPA is critical, particularly given the increase in cell phone use and advances in 

technology. 

The calling industry, including all those represented here today, make extravagant claims about spurious lawsuits, wrongful class actions, and nefarious attorneys 

churning new claims relating to TCPA litigation—all to support their insistence that 

the TCPA must be changed, and their arguments that the FCC’s 2015 Order is substantively improper. For example, some groups point to websites that track incoming unlawful calls to support their claim that much of TCPA litigation is a sham. 

Yet these businesses, like Privacy Star, track calls only after callers choose to make 

them. Further, the judicial system has robust mechanisms to protect against 

meritless cases. And even if there were some meritless cases that still made it 

through the judicial system, this would certainly not justify allowing innocent consumers to fall victim to a barrage of unwanted robocalls. Congress should not let 

this fictional specter of spurious litigation distract it from the harmful effects on 

consumers of the millions of unwanted calls. 

Congress deliberately created statutory penalties in the TCPA to ensure compliance. Any allegedly harsh consequence of repeated violations is precisely the deterrent intended and needed to instigate corrective action and industry-wide compliance. Only businesses that make robocalls without consent and without up-to-date 

dialing lists risk liability from TCPA lawsuits. 

Despite the facts that robocalls consistently top the list of consumer complaints 41

and that 3.5 million complaints about unwanted calls were made to the FTC in 

2015,42 there were only 3,710 TCPA lawsuits filed in 2015.43

This means that for every 1,000 complaints to the FTC, only one lawsuit is filed. 

Most consumers who receive robocalls do not take the time to complain to a Federal 

agency, and even a tinier percentage (one tenth of 1 percent) actually files a lawsuit. 

Most contact the caller or give up. Only those who are very frustrated will seek redress with state or Federal agencies. For example, the consumer in the Dominguez 

case, who received nearly 28,000 text messages from Yahoo, repeatedly asked Yahoo 

to stop, without success. The consumer then turned to the FCC, which also asked 

Yahoo to stop. Yahoo refused, stating that it did not believe, based on its narrow 

view of what constitutes an autodialer under the TCPA, that it was regulated by 

the FCC. Only then did the consumer file suit.44 If the industry callers represented 

here today achieve their goal of weakening the law, the number of unwanted calls 

and texts will skyrocket. 

The TCPA does not provide for an attorney fee award even when the consumer prevails, and the statutory damages recovery is limited to $500 per impermissible 

call. (The court has discretion to treble this amount if it finds that the defendant 

acted willfully or knowingly.45) This means that only cases involving a high volume 

of illegal calls will provide the possibility of a recovery that is even sufficient to 

cover the attorney’s time to investigate, file and litigate the case. Thus the very 

structure of the TCPA weeds out cases that involve only a low volume of isolated, 

unwanted calls. 

Moreover, the alarmist criticisms of class actions are simply a red herring. A few 

problematic class actions do not diminish the necessity of fostering effective enforcement of the significant substantive protections provided by the TCPA. The vast majority of TCPA claims are brought as individual actions, but having the ability to 

30 

46 ‘‘It may be that without class certification, not all of the potential plaintiffs would bring 

their cases. But that is true of any procedural vehicle; without a lower filing fee, a conveniently 

located courthouse, easy-to-use Federal procedural rules, or many other features of the Federal 

courts, many plaintiffs would not sue.’’ Shady Grove Orthopedic Associates, P.A., v. Allstate Insurance Co., 559 U.S. 393, 435 n.18 (2010). 47 Cooper v. Nelnet, 6:14–cv–00314–GKS–DAB (M.D. Fla.). 48 746 F.3d at 1246. 49 629 Fed. Appx. at 371. 50 Case No. 13–cv–08285 (N.D. Ill.). 

pursue TCPA claims as a class action furthers the statute’s fundamental purpose. 

Class settlements bring real relief to the public, as many defendants then stop making the offending calls or they implement safeguards. Also, because the TCPA has 

no attorney fee provision, class actions often present the only practical means of litigating a claim.46

2. The FCC’s 2015 Omnibus Order on the TCPA was correct. 

The callers have pressed the FCC to change three critical definitions within the 

TCPA: 

(a) They seek a narrow definition of ‘‘autodialer’’ or ‘‘ATDS’’ under the TCPA— 

which would have the effect of eliminating any statutory or government oversight over automated calls, whether for informational, telemarketing, debt collection, or other purposes. 

(b) They seek a definition of the term ‘‘called party’’ to mean the ‘‘intended recipient’’ of the call—which would remove any incentives for callers to maintain 

timely records of consent, and eliminate the legal basis for consumers to ask 

that wrong number calls cease. 

(c) They seek a ruling that once a consumer has provided consent to receive 

robocalls, such consent can never be revoked, regardless of the number of unwanted automated calls and texts the consumer receives. 

Not only are these arguments incorrect as a matter of law, but the granting of 

any one of them would unleash a tsunami of unwanted calls upon owners of cell 

phones in the United States. The FCC was quite correct, both legally and as a policy 

matter, to deny each of these requests by the industry. 

Autodialer definition. The calling industry’s argument that the FCC’s longstanding definition of autodialer is wrong is based on the notion that the current 

definition covers too many instruments, supposedly making the distinction meaningless. The implication is that because so many people have smart phones, each of 

which could be considered an autodialer, all of those people could be sued under the 

TCPA—a danger the industry would prevent by changing the definition of 

autodialer to exclude all of the technology that is actually being used by commercial 

entities to call consumers. 

Called party. The calling industry argues that ‘‘called party’’ must mean the person the caller intended to call, rather the person the caller actually reached at the 

dialed number. The industry proposes a tortured analysis of the TCPA’s plain language that would lead to disastrous results for consumers. Adopting the industry’s 

absurd interpretation not only runs afoul of the TCPA’s plain reading, but it would 

also leave innocent consumers who receive uninvited, wrong number robocalls without recourse. For example, in one reported case, Nelnet called one consumer over 

185 times, contending that it had consent because the intended recipient was the 

person it was trying to call, namely the real debtor.47

If the position advanced by industry were to become the rule, Nelnet would have 

no liability no matter how many times it called the wrong person. Nelnet’s defense 

would be that because it intended to call one party 185 times, and it had consent 

from that party, that would be sufficient. It would not matter that it actually 

reached someone else 185 times. The person who answers and owns the phone is 

clearly the ‘‘called party.’’ It does not make sense to treat the ‘‘intended party’’ as 

the ‘‘called party,’’ and leave the party actually called unprotected. 

In Osorio, the consumer received 327 debt collection robocalls to her cell phone 

for a debt owed by someone else.48 In Dominguez, Yahoo sent 27,809 texts, and 

maintained that it did not have to stop because it had consent from a prior subscriber.49 In Allen v. JPMorgan Chase, N.A., a noncustomer of Chase Auto Finance 

received over 80 prerecorded calls to her cell phone relating to the debt of someone 

else. When she answered the calls, an automated voice instructed her to call Chase 

Auto Finance to discuss ‘‘her’’ account, or to visit www.chase.com. When she called, 

Chase initially refused to take action because she was not a customer. Only after 

numerous complaints and litigation did the calls cease.50

31 

51See Osorio, 746 F.3d at 1250–52 (rejecting argument that ‘‘intended recipient’’ is the ‘‘called 

party’’). See also Soppet v. Enhanced Recovery Co., 679 F. 3d 637, 640–41 (3d Cir. 2013); Paradise v. Commonwealth Fin. Sys., Inc., No. 3:13–cv–00001, 2014 WL 4717966, at *3 (M.D. Pa. 

Sept. 22, 2014) (‘‘called party’’ does not mean intended recipient); Fini v. DISH Network L.L.C., 

955 F. Supp. 2d 1288, 1296 (M.D. Fla 2013) (‘‘possessing standing as a ‘called party’ . . . does 

not require the plaintiff to have been the intended recipient’’); Manno v. Healthcare Revenue Recovery Group, L.L.C., 289 F.R.D. 674, 682 (S.D. Fla. 2013); Breslow v. Wells Fargo Bank, N.A., 

857 F. Supp. 2d 1316, 1322 (S.D. Fla. 2012) (‘‘called party’’ refers to the actual, not the intended, 

recipient). 52See 2015 TCPA Declaratory Ruling and Order at 8006–10, ¶¶ 85–92. 53 Case No. 4:14–cv–03141 (S.D. Tex). 54 Case No. 5:14–cv–04751–PSG (N.D. Cal.) 55 Case No. 4:2015–cv–00282 (S.D. Tex). 56Michael P. Battaglia, Meg Ryan, Marcie Cynamon, Purging Out-Of-Scope And Cellular Telephone Numbers From RDD Samples, in Proceedings of the AAPOR–ASA Section on Survey Research Methods 3798 (2005). 57 15 U.S.C. §§ 1601 et seq. 58See Numbering Resource Optimization, CC Docket No. 99–200, Report and Order, 15 FCC 

Rcd. 7574, 7590, ¶ 29 (2000). 

The FCC did not make new law in its 2015 ruling. It simply reiterated the holdings of the vast majority of courts that ‘‘called party’’ is indeed the person actually 

called and not some other intended recipient.51

The reassigned numbers issue is a red herring. In its 2015 Omnibus Order, the 

FCC allowed callers only one call to determine whether a cell phone number had 

been reassigned to a new consumer.52 It did this because if there were not a strict 

limit on these calls, callers would have no incentive to ensure that they are calling 

the person who provided consent to be called. 

Wrong number calls generally are not a matter of one or even two calls, but usually result in many calls. Here are just a few examples involving a huge number 

of wrong number calls: 

• Singh v. Titan Fitness Holdings, L.L.C. d/b/a Fitness Connection: 200 calls.53

• Percora v. Santander: 50 calls 54

• Scott v. Reliant Energy Retail Holdings, L.L.C.: at least 100 calls.55

It does not matter if the industry does not benefit from wrong number calls—the 

industry must be incentivized to stop the wrong number calls. The TCPA places the 

burden of proving consent on the caller. This burden should remain on the caller 

to ensure that the consent remains valid. The experience reflected in the cases 

shows that, without proper incentives to stop making wrong-number calls, the industry will simply keep calling. (But actually, the industry does benefit from the 

wrong number calls by shifting the cost of ensuring that the right party is called 

from the caller to the called party.) 

The FCC’s Order on reassigned numbers is reasonable, and allows industry 

groups one ‘‘free’’ call before liability attaches. After all, the businesses placing the 

calls are in the best position to ensure ongoing consent. Industry groups that insist 

on placing robocalls to consumers can seek technologies with a higher accuracy rate 

than those on the market (which currently have between 85 to 99 percent accuracy 

in identifying cellular numbers).56 They can combine existing technologies with 

other strategies to prevent wrong number calls, such as making a manual call first, 

or developing a method to confirm that the called party is in fact the intended recipient. The discussion in section 6 of this Testimony provides more detail about 

methodologies that can be used to avoid wrong number calls. 

Keeping the onus on the caller is appropriate. It is analogous to what transpired 

in the financial sector after the Fair Credit Billing Act was passed.57 Placing the 

burden of managing consumer fraud in credit card transactions upon banks provided them with the incentive to create systems that limit and avoid fraud. The rationale is the same here. 

Many callers communicate regularly with the persons they intend to call (i.e., 

their own customers). Who better than the callers to ensure that they have ongoing 

consent? These callers have processes in place to maintain current customers’ contact information; they can also establish consent to call cell phones. Businesses can 

implement features in their customer communications to confirm ongoing consent 

(i.e., via their websites, at their storefronts, via telephone). If they are unable to confirm consent, the best practice would be to remove the consumer’s name from their 

automated calling lists. 

Notably, most cell phone providers do not reassign numbers for at least 30 days.58

Autodialers are equipped to record ‘‘triple-tone’’ signals that identify a number that 

32 

59See 2015 TCPA Declaratory Ruling and Order at 38 n.303. 60See 2015 TCPA Declaratory Ruling and Order ¶ 47. 61 U.C.C. §§ 1–201, 1–304. 62 U.C.C. § 2–206. 63 U.C.C. § 1–203. 64 U.C.C. § 1–205. 

has been disconnected. A manual dialer will also hear a triple-tone. Once the caller 

knows that the number has been disconnected, it also knows that the number is on 

track to be reassigned to a different person.59

And, of course, if a business wants an absolute guarantee against TCPA liability, 

it has the option of simply refraining from making robocalls; it can manually dial 

instead. Businesses do not have a ‘‘right’’ to make robocalls. And their ability to do 

so must not undermine the privacy rights of consumers. The FCC’s a safe harbor 

for liability for one call is an appropriate balance between assisting callers to determine whether a number has been reassigned and opening the floodgates to unwanted calls to consumers. 

‘‘Reasonable means of revoking consent’’ includes only means that are reasonable. 

The calling industry also complains about the FCC’s order requiring that callers 

honor consumers’ use of ‘‘reasonable means’’ to revoke consent.60 But any ‘‘reasonable’’ means to revoke consent is appropriate and consistent with the plain reading 

of the TCPA. Industry arguments paint a myriad of far-fetched examples of ways 

consumers could attempt to revoke consent. Yet the FCC did not say consent could 

be revoked in any way, but rather any reasonable way. 

Industry objects to the use of reasonableness as a standard. But reasonableness 

is often used as a standard in statutes, court rules, and administrative agency rules 

and decisions. The ‘‘Reasonable Man’’ is an eminent personality in United States 

law. For example, the term ‘‘reasonable’’ is used to define a standard in Rules 4, 

5, 11, 12, 15, 16, 17, 23, 26, 27, 30, 32, 33, 34, 36, 37, 43, 45, 50, 51, 53, 56, 60, 

65, and 68 of the Federal Rules of Civil Procedure. 

The Uniform Commercial Code—the basic law governing commercial transactions 

throughout the United States—imposes upon parties a duty of good faith, defined 

to include ‘‘reasonable commercial standards of fair dealing.’’ 61 It provides that an 

offer shall be construed as inviting acceptance ‘‘by any medium reasonable in the 

circumstances’’ and is construed to remain open for a ‘‘reasonable time.’’ 62 ‘‘Reasonably predictable’’ fair market rent is part of the standard for distinguishing between 

a lease and a sale.63 When the parties have not agreed upon a time for an action 

to be taken, it is to be taken within a ‘‘reasonable time.’’ 64 And this is just a partial 

list of the references to reasonableness as a standard in only the first of the U.C.C.’s 

eleven Articles. The industry’s objection to a reasonableness standard is alarming, 

and indicative that—absent this requirement—these industry groups would seek to 

impose unreasonable measures to restrict revocation of consent. 

It is only when callers make it unduly cumbersome to revoke consent that they 

are likely to receive varying manners of revocation, which may or may not ultimately be deemed reasonable. For example, if the caller does not provide a mechanism to opt out when making a robocall (and many do not), the consumer might 

go to the brick and mortar storefront and ask a representative to remove his name 

from the calling list. 

Reasonable methods of revocation should include an easy-to-use opt-out mechanism provided within the call or text. Other methods may include going to the caller’s website, or calling the company’s customer service line. It stands to reason that 

consumers would be likely to use these methods. However, no specific method 

should be mandatory because not every method fits every scenario. 

Instead of requiring consumers to discern how to revoke consent for a particular 

business (i.e., XYZ Co. requires completion of a form), the onus must be on the caller. If a business wants to robocall consumers, it should train its employees how to 

handle a consumer’s wish to opt out of robocalls, and not shift its burden to consumers. 

Allowing the industry to limit mechanisms for revocation is contrary to the 

TCPA’s broad construction, and also disregards the myriad of ways in which businesses may be organized (i.e., not all have a website or customer service line). Allowing any reasonable manner of revocation that conveys a message to the caller 

that the recipient does not wish to receive future communications is appropriate. 

Some industry groups have suggested that the terms for revocation should be limited to the terms set out in the underlying contracts. However, not all communications are subject to a contractual relationship between the parties (e.g., wrong number calls), so even the most consumer-protective contract would not be a one-sizefits-all solution. More important, leaving the matter to contract opens the door to 

33 

65 U.S. Dept of Education, Federal Student Aid Portfolio Summary (May 2016), available at 

https://studentaid.ed.gov/sa/about/data-center/student/portfolio. 66 ‘‘Office of the Comptroller of the Currency, OCC Mortgage Metrics Report, Third Quarter 

2015 (Feb. 2016), available at http://www.occ.treas.gov/publications/publications-by-type/otherpublications-reports/mortgage-metrics/mortgage-metrics-q3–2015.pdf. 67 ‘‘U.S. Small Business Administration, Number of Approved Loans by Program (Feb. 2016), 

available at https://www.sba.gov/sites/default/files/WDSlTable3lApprovalCountlReport 

.pdf. 68 ‘‘U.S. Dep’t of Agriculture, Office of Inspector General, Rural Development’s Financial Statements for Fiscal Years 2015 and 2014 at 23, available at http://www.usda.gov/oig/webdocs/ 

85401-0005-11.pdf. 69 Internal Revenue Service Data Book, SOI Tax Stats—Delinquent Collection Activities, Table 

16 (2015), available at https://www.irs.gov/uac/SOI-Tax-Stats-Delinquent-Collection-ActivitiesIRS-Data-Book-Table-16. 70 Internal Revenue Service Data Book 43 (2015), available at https://www.irs.gov/pub/irssoi/15databk.pdf. 71See 26 U.S.C. § 6306 (amended by Pub. L. No. 114–94, 129 Stat. 1312 (Dec. 4, 2015)). 72See Press Release, Justice Department Reaches $60 Million Settlement with Sallie Mae to 

Resolve Allegations of Charging Military Servicemembers Excessive Rates on Student Loans 

Continued 

unequal bargaining positions in contractual drafting and obscure provisions in fine 

print, all leading to consumer confusion about how to revoke consent. Better to keep 

the FCC’s approach: that revocation must simply be reasonable. 

3. The importance of passing the HANGUP Act. 

Unfortunately, a provision seriously undermining the important protections of the 

TCPA was jammed through Congress as part of the Bipartisan Budget Act of 2015. 

Section 301 of this Act creates an exemption to the TCPA that permits robocalls and 

texts by debt collectors of Federal debt—primarily student loan borrowers who are 

delinquent on Federal student loan payments, as well as taxpayers pursued by private collectors—to be made to cellphones without the consent of the consumer. This 

is a dangerous precedent that will harm tens of millions of Americans, and it should 

be repealed. Senate Bill 2235, the HANGUP (Help Americans Never Get Unwanted 

Phone calls) Act, repeals the enactment of Section 301 in the budget bill. We strongly support the HANGUP Act. 

Our best estimate of the total number of people who could be negatively impacted 

by Section 301 is over 61 million people. This includes: 

• Federal Student Loans. The total number of unduplicated recipients of Federal 

student loans (including Direct loans, Federal Family Education loans, and Perkins loans) was 41.8 million as of Q1 2016.65

• Federally Guaranteed Mortgages. As of September 2015, there were a total of 

4,934,260 mortgages with an explicit guaranty from the U.S. Government, including the Federal Housing Administration, the U.S. Department of Veterans 

Affairs, and certain other departments to a lesser extent. This number includes 

both current and performing mortgages (4.4 million) as well as delinquent mortgages (474,000).66

• Small Business Loans. The Small Business Administration (SBA) offers several 

kinds of guaranteed loan programs, as well as direct business loans and disaster loans. For Fiscal Year 2015, the SBA approved over 80 thousand loans.67

• Agriculture Loans. The U.S. Department of Agriculture (USDA) offers various 

kinds of loan programs, including direct and guaranteed loans for single/multifamily housing, community facilities, and business programs. The USDA’s Rural 

Development loan programs serve 306,552 borrowers through direct programs 

and 942,367 borrowers through guaranteed programs, as of Fiscal Year 2015.68

• IRS Taxpayer Delinquent Accounts. Since 2004, the number of taxpayer delinquent accounts subject to collection activities has grown each year.69 As of September 30, 2015, a total of 13.3 million taxpayer accounts were subject to IRS 

delinquent collection activities.70 These accounts are now subject to robocalling 

by private debt collectors.71

Student loan collectors’ and servicers’ repeated debt collection violations. Student 

loan collectors and servicers have frequently violated the laws and regulations designed to protect consumers from overreaching, abuse and harassment. For example, 

consider the student loan servicer Navient’s recent settlements with the FDIC and 

the Department of Justice. On May 13, 2014, Navient reached an agreement with 

the Department of Justice requiring it to pay $60 million to compensate student 

loan debtors for interest overcharges that violated the Servicemembers Civil Relief 

Act (SCRA).72 On the same day, the FDIC announced a separate $96.6 million setVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00037 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
34 

(May 13, 2014), available at http://www.justice.gov/opa/pr/justice-department-reaches-60-million-settlement-sallie-mae-resolve-allegations-charging. 73See Press Release, FDIC Announces Settlement with Sallie Mae for Unfair and Deceptive 

Practices and Violations of the Servicemembers Civil Relief Act (May 13, 2014), available at 

https://www.fdic.gov/news/news/press/2014/pr14033.html. While this matter involved private 

student loans, rather than the Federal student loans for which section 301 provides a carveout, the behavior of student loan servicers is relevant to the discussion. 74 Hearing on the Impact of Student Loan Debt on Borrowers and the Economy Before the 

United States Senate Comm. on the Budget, 113th Cong., 2d Sess. (June 4, 2014) (testimony 

of Rohit Chopra, Assistant Director & Student Loan Ombudsman, Consumer Financial Protection Bureau) (emphasis added). 

tlement with Navient for manipulating the allocation of students’ payments in order 

to maximize late fees, misrepresenting and inadequately disclosing how borrowers 

could avoid late fees, and violating SCRA requirements.73

Moreover, in 2014 testimony to Congress about problems with student loans, the 

Consumer Financial Protection Bureau’s Student Loan Ombudsman stated: 

Loan servicers are the primary point of contact on student loans for more than 

40 million Americans. . . . . 

As the recession decimated the job market for young graduates, a growing share 

of student loan borrowers reached out to their servicers for help. But the problems they have encountered bear an uncanny resemblance to the problems faced 

by struggling homeowners when dealing with their mortgage servicers. Like 

many of the improper and unnecessary foreclosures experienced by many homeowners, I am concerned that inadequate servicing has contributed to America’s 

growing student loan default problem, now topping 7 million Americans in default on over $100 billion in balances. 

The Bureau has received thousands of complaints from borrowers describing the 

difficulties they face with their student loan servicers. Borrowers have told the 

Bureau about a range of problems, from payment processing errors to servicing 

transfer surprises to loan modification challenges. To ensure that we do not see 

a repeat of the breakdowns and chaos in the mortgage servicing market, it will 

be critical to ensure that student loan servicers are providing adequate customer service and following the law.74

Student loan collectors and servicers have also frequently been subject to private 

suits for TCPA violations. For example, Nelnet was a defendant in a recent TCPA 

action, Cooper v. Nelnet, because it contacted third parties’ cell phones with pre-recorded messages. Mr. Cooper does not have a student loan serviced by Nelnet. Yet, 

he received the following pre-recorded call several times on his cell phone in addition to texts and other calls: 

Hello, this is an important message for Leonor Vargas from Nelnet, calling on 

behalf of the U.S. Department of Education. We do not have a current address, 

phone number, or e-mail on file for Leonor Vargas. Without current contact information, we are unable to provide important information about their student 

account. Please contact Nelnet 24/7 at 888–486–4722 or visit us at 

www.nelnet.com. This matter requires your immediate attention. Thank you. 

Similarly, Sallie Mae was the defendant in Cummings v. Sallie Mae, 12–cv–09984 

(N.D. Ill.), a case involving allegations that Sallie Mae called people who were references for the students’ loans with pre-recorded debt collection messages. Sallie 

Mae had no relationship with these references in regards to the accounts that were 

the subject of the calls. 

These examples demonstrate that student loan servicers and collectors are 

autodialing and delivering artificial voice messages to cell phones in violation of the 

TCPA, as well as violating other critically important consumer protections. Until the 

servicers and collectors begin complying with the rules and regulations to which 

they are currently subject, it is a mistake to create special exemptions from consumer protection law for their benefit. The situation calls for stronger enforcement, 

not weaker protections. 

Financially distressed consumers. Studies have shown—and executives in the 

credit industry have repeatedly admitted—that the major causes of serious consumer delinquency are unemployment, illness, and marital problems. Moreover, the 

credit industry’s overextension of credit, particularly high-cost credit, greatly inhibits debtors’ ability to repay. 

When Congress wrote the Federal Fair Debt Collection Practices Act (FDCPA) it 

explicitly recognized that most delinquency is not intentional. Just the opposite is 

the case. Most overdue debts are not the fault of the consumer: 

35 

75S. Rep. No. 95–382, 95th Cong., 1st Sess., reprinted in 1977 U.S. Code Cong. & Admin. 

News. (Aug. 2, 1977) (emphasis added). 76David Caplovitz, Consumers in Trouble: A Study of Debtors in Default ch. 11 (1974). See 

also Teresa A. Sullivan, Elizabeth Warren, and Jay Lawrence Westbrook, As We Forgive Our 

Debtors: Bankruptcy and Consumer Credit in America (1989). 77Sumit Agarwal and Chunlin Liu, Determinants of Credit Card Delinquency and Bankruptcy: 

Macroeconomic Factors, 27 Journal of Economics and Finance 1 (2003). 78See e.g. Theresa Tamkins, ‘‘Medical Bills Prompt More than 60 percent of Bankruptcies,’’ 

CNN Original Series, June 5, 2009. 79See Anya Kamenetz, Corinthian Colleges Misled Students On Job Placement, Investigation 

Finds, Higher Ed, Nov. 17, 2015, available at http://www.npr.org/sections/ed/2015/11/17/ 

456367152/corinthian-misled-students-on-job-placement-investigation-finds. See also Annie 

Waldman, How a For-Profit College Targeted the Homeless and Kids With Low Self-Esteem, 

ProPublica, Mar. 18, 2016 (newly released e-mails and PowerPoints show first-hand Corinthian 

Colleges’ predatory practices), available at https://www.propublica.org/article/how-a-for-profitcollege-targeted-homeless-and-kids-with-low-self-esteem: Press Release, CFPB Sues For-Profit Corinthian Colleges for Predatory Lending Scheme (Sept. 16, 2014) (Bureau Seeks More than $500 

Million In Relief For Borrowers of Corinthian’s Private Student Loans), available at http:// 

www.consumerfinance.gov/about-us/newsroom/cfpb-sues-for-profit-corinthian-colleges-for-predatory-lending-scheme/. 80Danielle Douglas-Gabriel, Is this the beginning of the end for ITT? Washington Post, 

Oct. 19, 2015 (CFPB accused the company of providing zero-interest loans to students but failing to tell them that they would be kicked out of school if they didn’t repay in a year; when 

students could not pay up, ITT allegedly forced them to take out high-interest loans to repay 

the first ones),available at https://www.washingtonpost.com/news/grade-point/wp/2015/10/ 

19/is-this-the-beginning-of-the-end-for-itt/ 81Staff of S. Comm on Health, Education, Labor, and Pension, 112th Cong., For Profit Higher 

Education: The Failure to Safeguard the Federal Investment and Ensure Student Success 

(2012), available at http://www.help.senate.gov/imo/media/forlprofitlreport/Contents.pdf. 

One of the most frequent fallacies concerning debt collection legislation is the 

contention that the primary beneficiaries are ‘‘deadbeats.’’ In fact, however, 

there is universal agreement among scholars, law enforcement officials, and 

even debt collectors that the number of persons who willfully refuse to pay just 

debts is minuscule. Prof. David Caplovitz, the foremost authority on debtors in 

default, testified that after years of research he has found that only 4 percent 

of all defaulting debtors fit the description of ‘‘deadbeat.’’ This conclusion is supported by the National Commission on Consumer Finance which found that 

creditors list the willful refusal to pay as an extremely infrequent reason for 

default. 

The Commission’s findings are echoed in all major studies: the vast majority of 

consumers who obtain credit fully intend to repay their debts. When default occurs, it is nearly always due to an unforeseen event such as unemployment, overextension, serious illness, or marital difficulties or divorce.75

The FDCPA, along with other laws protecting debtors from abuse and harassment, is based on this recognition, rather than on the myth that draconian collection 

tactics are justified by the existence of substantial numbers of debtors who sought 

out credit without the intention or wherewithal to repay.76

There are clear, objective, widely recognized causes of delinquency and default on 

consumer debt. Unemployment is widely recognized as the leading cause of the failure to pay credit card debt.77 Excessive medical debt is also widely seen as cause 

for the non-payment of other bills.78

The impact of the FCC’s proposed rule on borrowers with Federal debt from forprofit colleges. There are numerous for-profit colleges that have been repeatedly investigated or sued for fraudulent activities that seriously harm consumers, especially low-income consumers. Just two examples are Corinthian 79 and ITT.80 As the 

result of predatory practices, students who attend for-profits often do not benefit 

from the education paid for with the Federal student loans, and thus disproportionately default on their Federal student loans. 

The vast majority of students at these for-profit colleges have Federal student 

loans. A 2012 report from the U.S. Senate’s Health Employment Labor and Pension 

Committee that examined 30 publicly traded for-profit colleges, found that these institutions were up to 450 percent more expensive than their public counterparts, 

and that 96 percent of students who attend for-profit colleges borrow in order to do 

so.81 Further, students who attend for-profit colleges are far less likely to be able 

to repay their loans, leading to greater default and serious financial consequences 

for former students. Nationally, the for-profit college sector generates nearly half of 

36 

82Peter Smith & Leslie Parrish, Do Students of Color Profit from For-Profit College? Poor Outcomes and High Debt Hamper Attendees’ Future, Center for Responsible Lending (Oct. 2014), 

available at http://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crl-for-profit-univ-final.pdf. 83 Id. 84 Chris Morran, Government’s Own Budget Analysis Shows that Allowing Debt Collection 

Robocalls is Pointless, Consumerist, Oct. 28, 2015, available at https://consumerist.com/2015/ 

10/28/governments-own-budget-analysis-shows-that-allowing-debt-collection-robocalls-is-pointless/. 85See, e.g., CashCall, Inc. v. Morrisey, 2014 WL 2404300 (W. Va. May 30, 2014) (84,371 calls 

to 292 consumers) (unpublished); Meadows v. Franklin Collection Serv., Inc., 414 Fed. Appx. 230 

(11th Cir. 2011) (200–300 calls); Rucker v. Nationwide Credit, Inc., 2011 WL 25300 (E.D. Cal. 

Jan. 5, 2011) (approximately 80 phone calls in one year); Krapf v. Nationwide Credit, Inc., 2010 

WL 2025323 (C.D. Cal. May 21, 2010) (four to eight calls daily for two months); Turman v. Central Billing Bureau, Inc., 568 P.2d 1382 (Or. 1977) (at least four calls over nine days). 86See, e.g., Margita v. Diamond Mortgage Corp., 406 N.W.2d 268 (Mich. Ct. App. 1987) (stress 

from telephone collection efforts including phone calls aggravated paroxysmal atrial tachycardia); Turman v. Central Billing Bureau, Inc., 568 P.2d 1382 (Or. 1977) (affirming tort verdict; 

blind consumer rehospitalized with anxiety and glaucoma complications after repeated collection 

calls); GreenPoint Credit Corp. v. Perez, 75 S.W.3d 40 (Tex. App. 2002) (affirming jury verdict 

all student loan defaults, while enrolling only about 13 percent of all students.82

These harmful practices most often impact vulnerable populations including low-income persons, people of color, and veterans, all of whom are overrepresented in enrollment at for-profit colleges. This is illustrated in an October 2014 Center for Responsible Lending: 

We find that students who attend for-profit colleges are more likely to need to 

borrow for their education and tend to borrow more than their peers at public 

or private, non-profit schools. Unfortunately, this financial investment does not 

appear to pay off for many for-profit students, who graduate at lower rates, are 

more likely to default on their loans, and may face poor employment outcomes. 

African Americans and Latinos are at greater risk of the high debt burdens and 

poor outcomes caused by for-profit colleges because they are more likely to attend these schools than their white peers. 

[A]id received by recent veterans as part of the new Post-9/11 GI bill does not 

count towards the 90 percent limitation on Federal aid [that for-profits receive]. 

As a result, for-profit colleges target their recruitment efforts toward current 

and former members of the military, whose additional grant aid can be counted 

towards the 10 percent of funds that are intended to come from private 

sources.83

Vulnerable populations with delinquent Federal student loans from potentially 

fraudulent for-profit schools should not be further harassed by robocalls to their cell 

phones. 

Abusive debt collection calls. Collectors are not generally dealing with people who 

are choosing not to pay something they can pay. Rather, they are dealing with people who are already struggling to pay their debts, for whom choosing to pay one debt 

will often mean that other debts or necessities will go unmet. This is supported by 

estimates indicating that the new loophole for debt collection robocalls will not generate significant revenue for the Federal Government. As pointed out by 

Consumerist, the Congressional Budget Office projects that debt collection robocalls 

will raise, at most, $500,000 per year over the next ten years.84 This is why both 

debt collection regulation and cell phone regulation should not permit abuse, harassment or unfair or deceptive practices. 

Causing one’s cell phone to ring repeatedly is even more abusive for consumers 

than causing one’s home phone to ring. Debt collection often begins with a series 

of form letters and then graduates to phone calls from collection employees. The industry’s technological capabilities, along with the perverse incentives it provides its 

employees, often ensure that these calls are frequent and often abusive. In particular, the collection employee is often eligible for salary incentives based on the 

amount he or she collects. Collectors use automated dialing systems that will place 

a million calls per day. 

As is indicated by the numerous cases filed in the courts about multiple calls as 

a collection tactic, people find it enormously stressful to receive multiple collection 

calls every day.85 The calls are highly intrusive. They cause great distress and trigger difficulties in marriages. Numerous collection calls interfere with daily life. The 

calls themselves, the dread of future calls, and the fear of the dissemination of personal, embarrassing information to friends, neighbors, co-workers and employers 

permeate the lives of consumers. Indeed, in some cases, aggressive collection efforts 

have caused such significant emotional distress as to cause physical illness.86

37 

of $5 million in compensatory damages against debt collector; elderly consumer suffered severe 

shingles-related sores, anxiety, nausea, and elevated blood pressure due to repeated telephone 

and in-person harassment over a debt she did not owe). 87 Consumer Financial Protection Bureau, Consumer Response Annual Report 16 (January 1– 

December 31, 2015) available at http://files.consumerfinance.gov/f/201604lcfpblconsumer-re- sponse-annual-report-2015.pdf. 88 Id. 89Marcia Frellick, Survey: Debt collection calls growing more frequent, aggressive, 

Creditcard.com, Jan. 28, 2010, available at http://www.creditcards.com/credit-card-news/debtcollectors-become-more-aggressive-break-law-1276.php. 90David Dayen, Someone Else’s Debt Could Ruin Your Credit Rating, New Republic, Mar. 31, 

2014, available at http://www.newrepublic.com/article/117213/debt-collector-malpractice-someone-elses-debt-could-ruin-your-credit. 91Kevin B. Anderson, Federal Trade Commission, Staff Report of the Bureau of Economics, 

Consumer Fraud in the United States, 2011: The Third FTC Survey (April 2013), available at 

https://www.ftc.gov/sites/default/files/documents/reports/consumer-fraud-united-states-2011- 

third-ftcsurvey/130419fraudsurveyl0.pdf. The survey identified approximately 3.5 million telemarketing fraud cases in 2011 with a median loss per case of $100. Id. at 38 and 39. 92 Ringing off the Hook: Examining the Proliferation of Unwanted Calls before the United 

States Senate Special Comm. on Aging, 114th Cong., 1st Sess. (2015) (testimony of the Federal 

Trade Commission), available at http://www.aging.senate.gov/imo/media/doc/FTClGreisman 

l6l10l15.pdf. 93Federal Trade Commission, FTC DNC and Robocall Enforcement, (Apr 19, 2016) (on file 

with the author). 94See 26 U.S.C. § 6306 (amended by Pub. L. No. 114–94, 129 Stat. 1312 (Dec. 4, 2015)) (requiring the IRS to enter into tax collection contracts for all inactive tax receivables). 95 Internal Revenue Service, Phone Scams Continue to be a Serious Threat, Remain on IRS 

‘‘Dirty Dozen’’ List of Tax Scams for the 2016 Filing Season (Feb. 2, 2016), available at https:// 

Continued 

Complaints about debt collection—wrong people called routinely. The Consumer 

Financial Protection Bureau’s Annual Report for 2015 shows that 40 percent of debt 

collection complaints involved continued attempts to collect debts not owed, which 

include complaints that the debt does not belong to the person called.87 Almost one 

fifth of all the complaints related to debt collector communication tactics.88

Similarly, a 2009 survey conducted by the Scripps Survey Research Center at 

Ohio University shows that 30 percent of respondents were being called regarding 

debt that was not their debt.89 And according to statistics from the Federal Reserve, 

one in seven people in the United States is being pursued by a debt collector, a substantial percentage of whom report being hounded for debts they do not owe.90

Senate Bill 2235, the HANGUP Act, repeals the enactment of Section 301 in the 

budget bill. The best protection against unwanted robocalls is to require the consent 

of the called party, as the TCPA does for all other non-emergency robocalls and 

texts made to cell phones. 

We urge you to pass S. 2235 as soon as possible. 

4. Federal law should be strengthened to deal with abusive robocalling to 

consumers. 

As is evident from the growing number of complaints about robocalls, as well as 

the growing litigation, American consumers are suffering from two problems related 

to robocalls. One is too many robocalls from legitimate companies. The other is the 

escalating number of robocalls from scammers. In the public’s mind, these two 

issues are intertwined. And, until they are each independently dealt with, the complaints—both to government agencies and through the courts—will continue to escalate. 

The TCPA and the Do Not Call Registry provide some protection for consumers 

from unwanted robocalls from legitimate companies, but these mechanisms have 

completely failed to address the entire robocall problem. Major phone companies 

provide little effective protection from the calls sent by scammers and unscrupulous 

actors. These calls cost consumers an estimated $350 million in 2011.91 Many of 

these scam robocalls originate from overseas, outside of the reach of the law.92 The 

FTC has had difficulty in enforcing the restrictions against unwanted calls, collecting less than 12 percent of the $1.2 million it has charged to Do Not Call and 

robocall violators since it created the national registry.93

The confluence of two changes in the law in 2015 with the ongoing caller ID spoofing problems will tremendously exacerbate existing problems. Scammers posing as 

IRS collection agents have long been known as perpetrating one of the worst consumer scams. Now that private debt collectors can collect IRS debts,94 it will be especially difficult for consumers to determine the difference between real collectors 

for the IRS and scammers.95 This likely confusion is made worse by a new statutory 

38 

www.irs.gov/uac/Newsroom/Phone-Scams-Continue-to-be-a-Serious-Threat,-Remain-on-IRSDirty-Dozen-List-of-Tax-Scams-for-the-2016-Filing-Season. 96 Jon Morgan, Federal Trade Commission, It’s the IRS calling . . . or is it? (Mar. 12, 2015) 

(‘‘This has all the signs of an IRS imposter scam. In fact, the IRS won’t call out of the blue 

to ask for payment, won’t demand a specific form of payment, and won’t leave a message threatening to sue you if you don’t pay right away. Have you gotten a bogus IRS call like this? If 

you did, report the call to the FTC and to TIGTA—include the phone number it came from, 

along with any details you have.’’). 97Federal Communications Commission, ‘‘Spoofing and Caller ID,’’ available at https:// 

www.fcc.gov/consumers/guides/spoofing-and-caller-id. 98 H.R. 4932 (ROBOCOP Act), 114th Cong., 2d Sess. (2016). 99Tom Wheeler, Another Win For Consumers, Federal Communications Commission Blog, 

(May 27, 2015) available at https://www.fcc.gov/news-events/blog/2015/05/27/another-win- consumers. 100Letter from National Association of Attorneys General to Randall Stephenson (AT&T), 

Lowell C. McAdam (Verizon), Glen F. Post, III (CenturyLink), Marcelo Claure (Sprint), John 

Legere (T-Mobile) (July 22, 2015), available at http://www.oag.state.md.us/Press/NAAG 

lCalllBlocking.pdf. 101My understanding is that Twitter has already arranged for a private database providing 

this information. 

provision authorizing the debt collectors of IRS debt to robodial consumers without 

consent. Calls from real collectors for the IRS will be permitted to robodial consumers—which directly conflicts with the explicit advice of the FTC ‘‘that the IRS 

never calls consumers out of the blue.’’ 96

One part of the problem is that scammers are able to use a spoofed caller-ID so 

that it may look to the consumer answering the telephone as though a legitimate 

business is actually calling. That spoof is often the beginning of a telemarketing 

scam. Until we deal with caller ID spoofing, we won’t be able separate the robocalls 

from legitimate businesses from the scammers. 

What is needed. The telephone companies must be required to provide easy to use 

and free services that enable consumers to block unwanted callers, especially 

robocalls. Additionally, effective and mandatory anti-spoofing technology needs to be 

developed and adopted immediately. 

We appreciate the sentiment behind Senator Nelson’s introduction of Senate Bill 

2558: the Spoofing Prevention Act of 2016. This bill is a good start in the battle 

to push for a solution to the serious problem of caller ID spoofing. However, we fear 

that the effective anti-spoofing technology will not be developed until the telephone 

companies themselves are required to employ it. 

H.R. 4932, the ROBOCOP (Repeated Objectionable Bothering of Consumers on 

Phones) Act, gives consumers the ability to protect themselves from scam robocalls. 

It directs the FCC to require phone companies to offer free, optional tools to all of 

their customers that will block unwanted autodialed or prerecorded calls. Emergency robocalls and those calls to which the consumer has consented would not be 

affected by this mandate. The bill would also require phone companies to address 

the ‘‘spoofing’’ problem 97 by improving call-blocking technologies and robocall enforcement.98 This bill outlines a comprehensive solution to the robocall problem, and 

we ask the Senate to introduce a companion bill as quickly as possible. 

Our groups also encourage consumers to put pressure on the major phone companies to offer all of their customers effective robocall-blocking tools at no additional 

cost. The FCC has declared that phone companies ‘‘should’’ offer these technologies,99 and last summer, 45 state attorneys general called on five major phone 

companies to provide them to their customers.100 Over 600,000 people have already 

signed Consumers Union’s petition asking AT&T, Verizon, and CenturyLink to provide these technologies to their customers. Consumers can join the campaign at 

www.EndRobocalls.org. 

5. A real fix for the reassigned number problem. 

One of the chief bugaboos in the discussions about callers’ professed difficulties 

complying with the FCC’s 2015 Omnibus Order is this industry’s statements that 

it has no reasonable way of knowing when the phone numbers have been reassigned 

to new people. So, they say, how can they reasonably avoid making these wrong 

number calls? 

There are several ways to avoid these calls. First, the calling industry can arrange 

for a fully accurate database by setting up one with the cooperation of the cell phone 

providers.101 A database would be fully accurate and relatively inexpensive to operate and access by the caller if has the following components: 

1. All cell phone providers would participate by providing timely information 

about cell phone numbers that change ownership. 

39 

102For more information, see Early Warning’s website at http://www.earlywarning.com/ 

about-us.html. 103Data Sheet from 2014, describing the mobile number verification service offered by Early 

Warning (emphasis added). This data sheet is on file with the author. 104 Id. 

2. The information provided would simply be—on each reporting date—any telephone number that had been returned to the cell phone company (because it 

was dropped or abandoned or terminated) since the previous reporting date. 

3. The providers would make these reports within a short time (one day? two 

days?) from the date that the number was dropped. 

4. Callers could access the database easily online and simply ask: ‘‘For telephone 

number XYZ, when was the last time it changed ownership?’’ There would be 

no big data dump from the database, just the simple answer to the question: 

‘‘Number XYZ most recently changed ownership on ABC date.’’ 

5. The fees charged to callers for accessing the information would pay for the 

maintenance of the database. 

The keys components here are (a) all cell phone providers would participate, (b) 

by providing timely and updated information, (c) allowing reasonable cost for callers 

to access. 

Indeed, there are already database systems on the market that provide, with a 

high degree of accuracy, information about whether phone numbers have been reassigned. For example, Early Warning, a data exchange company,102 runs a database 

that can be accessed by callers to determine the status of each of the numbers they 

want to call. Early Warning describes its procedure in this way: 

How Mobile Number Verification Service Works: 

1. Organizations query the service, in real-time or batch, prior to calling customers. 

2. The service returns a number match or mismatch indicator based on: 

» Changes to the account since the last date the [caller] contacted the customer. 

» The network status of the number, if deactivated or suspended. This allows 

the organization to refrain from making an outbound call to an outdated number or out of service number. 

3. If the response returned is a ‘‘number match’’, then organizations can add the 

verified number to the Auto-Dialer/Contact Center process. If a number is 

flagged as a mismatch, organizations can take the steps necessary to re-verify, 

confirm or update the customer file.103

This company claims a high degree of accuracy: ‘‘In a recent test, Mobile Number 

Verification Service correctly identified over 99 percent of mobile changes.’’ 104 We 

think it is likely that there are other companies that provide similar services or can 

develop them. 

Additionally, callers can and should employ best practices that would include a 

number of practices to increase the accuracy of the callers’ records to assure that 

the phone numbers for which they have consent to call still belong to their customers. After all it is in their interest to ensure that they are actually reaching their 

intended customers. Some ideas for these best practices might include: 

• Capturing incoming numbers from customers and providing an alert when the 

number called from is different than the one for which the consumer has provided consent. 

• Requesting current telephone numbers in all interactions with customers, including online and paper transactions. 

The reassigned number problem need not really be a problem. Simple solutions 

are within reach. Congress should require that the cell phone providers participate 

in the database described above, and thereby provide a reasonable way to eradicate 

the reassigned numbers issue. 

6. The vicarious liability rules under the TCPA are appropriate. 

The issue of the extent to which one company should be liable for the TCPA violations of others has arisen recently, largely as the result of a case brought against 

DISH Network, L.L.C. The case was first filed in 2009 by the U.S. Department of 

Justice and the states of Illinois, California, Ohio and North Carolina. 

The litigation was brought because DISH Network’s dialers, as well as several of 

its retailers, were aggressively marketing DISH Network through robocalling conVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00043 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
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105 In re DISH Network, L.L.C., CG Docket No. 11–50, Declaratory Ruling, FCC 13–54, at 11 

(May 9, 2013). 106 United States v. DISH Network, L.L.C., 75 F. Supp. 3d 942, 1042 (C.D. IL 2014), vacated 

in part on reconsideration, (Feb. 17, 2015). 107 In re DISH Network, L.L.C., CG Docket No. 11–50, Declaratory Ruling, FCC 13–54, at 4 

(May 9, 2013). 

sumers. Many of the calls were made to consumers who were on the National Do 

Not Call Registry. Some had specifically requested to DISH that they not to be 

called again. Consumers testified about the substantial inconvenience that DISH’s 

calls caused them. Illinois consumers, for example, testified that the calls interrupted family meals, childcare, and taking care of sick relatives. 

Retailers were paid by DISH simply based on the sign-up volume. The evidence 

produced at trial demonstrated that DISH knew many of the retailers would do telemarketing as part of their sales practices. The Federal and state governments argued at trial that, among other things, DISH knew the retailers were making outbound telemarketing calls with automatic dialers, and that DISH was aware there 

were violations of both TCPA and telemarketing laws because of consumer complaints and enforcement actions. 

The issue is whether DISH Network can be held liable for the TCPA violations 

of its dialers and retailers. The FCC ruled that the Federal common law of agency 

is sufficient to show vicarious liability.105 The court has since agreed with that position, holding that the facts could support a finding that DISH Network is liable for 

the TCPA violations of the retailers making calls on its behalf.106 Although there 

have been reasoned positions advanced that third-party liability under the TCPA 

should reach further than agency principles to any act by a representative of or for 

the benefit of another,107 the FCC and the court were clearly right to apply at least 

the common law rules of agency liability to the entity—DISH Network—on whose 

behalf the calls were made. 

Congress should not consider passing any change to the vicarious liability standards applicable to TCPA enforcement cases. 

Conclusion. Thank you very much for the opportunity to testify today. I would be 

happy to answer any questions. 

APPENDIX

Descriptions of National Organizations On Behalf of Which This Testimony 

Is Filed 

Americans for Financial Reform is an unprecedented coalition of over 250 national, state and local groups who have come together to reform the financial industry. Members of our coalition include consumer, civil rights, investor, retiree, community, labor, faith based and business groups. 

The Center for Responsible Lending (CRL) is a nonprofit, non-partisan research 

and policy organization dedicated to protecting homeownership and family wealth 

by working to eliminate abusive financial practices. CRL is an affiliate of Self-Help, 

a nonprofit community development financial institution. For 30 years, Self-Help 

has focused on creating asset building opportunities for low-income, rural, womenheaded, and minority families, primarily through financing safe, affordable home 

loans. 

Consumer Action has been a champion of underrepresented consumers nationwide 

since 1971. A non-profit 501(c)(3) organization, Consumer Action focuses on consumer education that empowers low-and moderate-income and limited-Englishspeaking consumers to financially prosper. It also advocates for consumers in the 

media and before lawmakers to advance consumer rights and promote industry-wide 

change. By providing consumer education materials in multiple languages, a free 

national hotline, a comprehensive website (www.consumer-action.org) and annual 

surveys of financial and consumer services, Consumer Action helps consumers assert their rights in the marketplace and make financially savvy choices. Over 7,000 

community and grassroots organizations benefit annually from its extensive outreach programs, training materials and support. 

The Consumer Federation of America is an association of nearly 300 nonprofit consumer groups that was established in 1968 to advance the consumer interest 

through research, advocacy and education. 

Consumers Union is the public policy and advocacy division of Consumer Reports. 

Consumers Union works for telecommunications reform, health reform, food and 

product safety, financial reform, and other consumer issues. Consumer Reports is 

the world’s largest independent product-testing organization. Using its more than 

41 

50 labs, auto test center, and survey research center, the nonprofit rates thousands 

of products and services annually. Founded in 1936, Consumer Reports has over 8 

million subscribers to its magazine, website, and other publications. 

MFY Legal Services envisions a society in which there is equal justice for all. Its 

mission is to achieve social justice, prioritizing the needs of people who are low-income, disenfranchised or have disabilities. MFY does this through providing the 

highest quality direct civil legal assistance, providing community education, entering into partnerships, engaging in policy advocacy, and bringing impact litigation. 

MFY assists more than 20,000 New Yorkers each year. MFY’s Consumer Rights 

Project provides advice, counsel, and representation to low-income New Yorkers on 

a range of consumer problems, including unwanted and harassing debt collection 

robocalls, and supports strengthening the TCPA. 

The National Association of Consumer Advocates (NACA) is a non-profit association of attorneys and consumer advocates committed to representing consumers’ interests. Its members are private and public sector attorneys, legal services attorneys, law professors, and law students whose primary focus is the protection and 

representation of consumers. As a national organization fully committed to promoting justice for consumers, NACA’s members and their clients are actively engaged in promoting a fair and open marketplace that forcefully protects the rights 

of consumers, particularly those of modest means. 

National Center for Law and Economic Justice (NCLEJ) works with low-income 

families, individuals, communities, and a wide range of organizations to advance the 

cause of economic justice through ground-breaking, successful litigation, policy work, 

and support of grassroots organizing around the country. 

The National Consumer Law Center (NCLC) is a non-profit corporation founded 

in 1969 to assist legal services, consumer law attorneys, consumer advocates and 

public policy makers in using the powerful and complex tools of consumer law for 

just and fair treatment for all in the economic marketplace. NCLC has expertise in 

protecting low-income customer access to telecommunications, energy and water 

services in proceedings at state utility commissions, the FCC and FERC. We publish 

and annually supplement nineteen practice treatises that describe the law currently 

applicable to all types of consumer transactions, including Access to Utility Service 

(5th ed. 2011), covering telecommunications generally, and Federal Deception Law 

(2d ed. 2016), which includes a chapter on the Telephone Consumer Protection Act. 

Public Citizen is a national non-profit organization with more than 225,000 members and supporters. We represent consumer interests through lobbying, litigation, 

administrative advocacy, research, and public education on a broad range of issues 

including consumer rights in the marketplace, product safety, financial regulation, 

safe and affordable health care, campaign finance reform and government ethics, 

fair trade, climate change, and corporate and government accountability. 

U.S. Public Interest Research Group (U.S. PIRG) serves as the Federation of State 

PIRGs, which are non-profit, non-partisan public interest advocacy organizations 

that take on powerful interests on behalf of their members. For years, U.S. PIRG’s 

consumer program has designated a fair financial marketplace as a priority. Our research and advocacy work has focused on issues including credit and debit cards, 

deposit accounts, payday lending and rent-to-own, credit reporting and credit scoring and opposition to preemption of strong state laws and enforcement. On the web 

at www.uspirg.org. 

The CHAIRMAN. Thank you, Ms. Saunders. 

Mr. Lovich. 

STATEMENT OF RICHARD LOVICH, NATIONAL LEGAL 

COUNSEL, AMERICAN ASSOCIATION OF HEALTHCARE 

ADMINISTRATIVE MANAGEMENT 

Mr. LOVICH. Chairman Thune, Ranking Member Nelson, and 

members of the Committee, thank you for the opportunity to submit this testimony for the record. 

My name is Richard Lovich, and I serve as the National Legal 

Counsel for the American Association of Healthcare Administrative 

Management, known as AAHAM, which is a national organization 

actively representing the interests of healthcare administrative 

management professionals through a comprehensive program of 

legislative and regulatory monitoring and participation in many inVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00045 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\24146.TXT JACKIE
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dustry groups. I appreciate your holding this hearing today on 

these important issues. 

As you know, the FCC last July ruled on more than 20 petitions 

seeking clarifications to the Telephone Consumer Protection Act 

and the FCC’s TCPA rules. AAHAM was one of the petitioners and 

saw the clarification of what prior express consent means in the 

healthcare context, as well as a partial exemption from the Act to 

facilitate important healthcare-related calls. The FCC’s ruling did 

not clarify consent and exempted only certain types of calls made 

by healthcare providers. These calls cannot be financial in nature. 

Because of the ambiguity of the term ‘‘prior express consent’’ and 

whether related entities are protected, many well-intended 

healthcare organizations have been sued, and TCPA litigation continues to skyrocket. 

To be clear, healthcare providers cannot do their jobs effectively, 

efficiently, or cost-effect—in a cost-effective manner without using 

appropriate technology. The TCPA inhibits the use of such technology, and, as a result, drives the cost of healthcare higher. 

The TCPA was intended primarily to protect consumers from receiving unsolicited telemarketing calls in their homes at all hours 

of the day and night by restricting the use of autodialers and 

through requiring consent to be called. Mr. Chairman, AAHAM 

fully supports the goal and mission of the TCPA in helping to reduce unsolicited telemarketing calls. The complaints that have 

been mentioned here today typically are not involving healthcare 

providers. 

Despite its positive intent, 25 years since its passage, the TCPA 

has become severely outdated. It prevents Americans from receiving non-marketing service messages that they want, including 

healthcare appointment reminders, insurance coverage eligibility 

issues, Social Security disability eligibility and payment options, 

credit-card fraud alerts, notifications of travel changes, package delivery information, and many more. Further, it prevents them from 

receiving these communications on the devices that they prefer; 

specifically, their mobile telephones. 

At the time the TCPA legislation was passed, over 90 percent of 

U.S. households relied on their home or landline phone. Today, the 

trend is away from landline phones; in fact, nearly half of all American homes no longer maintain a landline, relying exclusively on 

wireless or cell technology. Since the enactment of the TCPA, the 

use of text messaging has exploded. In 2012, more than 2.19 trillion text messages were sent and received. This could not be anticipated when the TCPA was first enacted. 

To make matters worse, new laws and regulations have been 

passed that make compliance with the TCPA even more difficult. 

Two examples are the Affordable Care Act and the new IRS regulations dealing with charitable hospitals. 

The ACA requires hospitals and outpatient clinics to perform 

post-discharge follow up with patients to reduce the rate of readmission, which is a big contributor to the cost of healthcare. We 

know the reminders, surveys, and education that have proven to 

lower readmission rates can be successfully and cost-effectively conducted by phone. However, this cannot be economically done under 

the current TCPA. 

43 

Similarly, the IRS’s 501(r) regulations create another unfunded 

Federal mandate. These regulations require hospitals to make reasonable efforts to determine whether an individual is eligible for financial assistance with regard to their hospital bills. Again, the 

TCPA prohibits the use of the most efficient manner in which to 

do this. 

By requiring the use of more labor-intensive methods to comply 

with the regulations, the FCC’s TCPA decisions have added unnecessary expense, diverting resources that could otherwise be dedicated to patient care. 

In today’s technologically burgeoning society, it makes no sense 

for the FCC to allow technology to be used to contact consumers 

via their landline phone but not their cell phones. Today, the FCC 

is looking at the modernization of the TCPA in the wrong way. The 

FCC should be looking at balancing the needs of consumers to obtain healthcare and other information quickly and efficiently 

through their mobile devices, and also be protected by the strong 

anti-telemarketing rules that already exist. We urge Congress to 

modernize the TCPA to allow automated dialing technology to be 

used to text or call mobile phones as long as these texts or calls 

are not for telemarketing purposes. 

Mr. Chairman and Ranking Member Nelson, modernization of 

the TCPA in the healthcare arena is not a partisan issue, nor 

should it be. This issue simply points out the need for government 

regulations to keep pace with the needs of today’s consumers and 

businesses. This is about government working to bring healthcare 

costs down for consumers, not drive them up by continuing to require adherence to outdated rules and regulations. 

The current TCPA invites opportunistic parties to pressure caregivers for huge payouts. Lawsuits, even unsuccessful ones, require 

extraordinary time, cost, and effort to defend, and, thus, rob hospitals of the ability to fulfill their mission, which is delivering quality healthcare at a reasonable cost. 

Thank you for this opportunity. And if you or your staff have any 

questions, please feel free to contact me. I would love to work with 

the Committee on real solutions to this very important issue. 

[The prepared statement of Mr. Lovich follows:] 

PREPARED STATEMENT OF RICHARD LOVICH, NATIONAL LEGAL COUNSEL, 

AMERICAN ASSOCIATION OF HEALTHCARE ADMINISTRATIVE MANAGEMENT

Chairman Thune, Ranking Member Nelson, and members of the Committee, 

thank you for the opportunity to submit this testimony for the record. 

My name is Richard Lovich and I serve as National Legal Counsel for the American Association of Healthcare Administrative Management (AAHAM), which is the 

national organization actively representing the interests of healthcare administrative management professionals through a comprehensive program of legislative and 

regulatory monitoring and its participation in industry groups such as ANSI, DISA, 

WEDI and NUBC. AAHAM is a major force in shaping the future of healthcare administrative management. 

I appreciate your holding this hearing today. As you know, the Federal Communications Commission recently ruled on over 22 petitions seeking changes to the current rules governing the Telephone Consumer Protection Act (TCPA). AAHAM was 

one of those groups that submitted a petition seeking clarification of how the FCC 

defines consent. Consent by definition may seem like something simple to answer, 

but we have found that consent does not mean the same thing to so many people 

and thus has caused our members to be sued over this issue. Healthcare providers 

44 

cannot do their job effectively, efficiently, or in a cost effective manner without using 

technology today. 

The TCPA was signed into law in 1991 and already is out of date, yet, the FCC 

seems unwilling to consider real modernization. Technology has advanced so rapidly 

since 1991 and continues to develop at a pace the government cannot keep up with, 

yet agencies like the FCC, are unwilling to keep pace with these changes. 

The TCPA was designed to protect consumers from receiving unsolicited telemarketing calls in their homes at all hours of the day and night. To prevent these 

intrusive calls, Congress restricted the use of ‘‘automatic telephone dialing systems,’’ 

broadly limited the use of pre-recorded voice messages and prohibited outreach to 

mobile phones without ‘‘prior express consent’’ from the call recipient. Mr. Chairman, AAHAM supports that goal and mission of the TCPA. Nothing we or others 

have proposed would change that. 

Twenty three years since its passage, the TCPA has become outdated. It restricts 

Americans from receiving customer service messages they want—including 

healthcare appointment reminders, credit card fraud alerts, notifications of travel 

changes, power outage restoration, UPS delivery information and more. Further, it 

prevents them from receiving these communications on the device they prefer, their 

mobile phones. 

• At the time the TCPA legislation was passed, over 90 percent of U.S. households relied on their home or landline phone. Only 3 percent of Americans had 

a mobile phone, they were truly the province of the elite. So much has changed 

since then. 

• Today, the trend is away from landline phones, in fact nearly 2 in 5 American 

homes no longer maintain a land line and rely exclusively on wireless or cell 

technology. 

• Since the enactment of the TCPA, a new form of communication, text messaging, has emerged. In 2012, more than 2.19 trillion text messages were sent 

and received. In 1991, legislators had no way of predicting the growth of the 

mobile market or the rapid adoption of text messaging as a critical form of communication. 

To make matters worse, new laws and regulations have been passed that make 

compliance with the TCPA even more difficult. The Affordable Care Act (ACA) as 

well as new IRS regulations dealing with charitable hospitals, place unfunded mandates on hospital providers the fulfillment of which is made difficult if not impossible by the current language and interpretation of the TCPA. 

The ACA was passed in 2011, requires hospitals and outpatient clinics to perform 

post-discharge follow-up with patients to reduce the rate of readmission, a big contributor to the cost of healthcare. We know the reminders, surveys, and education 

that have proven to lower readmission rates, can be successfully and cost effectively 

conducted by phone. 

However, under the TCPA, these calls place the hospital at high-risk of violating 

the statute and facing penalties and defense fees and costs where the patient’s primary contact number is a mobile number and the patient didn’t expressly provide 

the mobile phone number for that purpose. The FCC’s recent ruling helps by making some slight changes to the TCPA for healthcare related calls, but it just touches 

the surface and does not get to the root of the problem. 

The IRS’s 501(r) regulations create another Federal Government unfunded mandate. These regulations require hospitals to call patients and orally inform them 

they may be eligible for financial assistance. A laudable endeavor and one hospitals 

are fully in favor of conducting. However, this is a process that could be more effectively, efficiently, and economically performed through the use of technology. The 

chilling effect of the ambiguity of the TCPA has required hospitals to refrain from 

the use of auto dialers and contacting patients through the use of mobile technology. 

By requiring the use of more labor intensive methods to comply with the regulations, the TCPA adds unnecessary expense which requires diverting resources that 

could otherwise be dedicated to patient care. 

President Obama has proposed ‘‘clarifying that the use of automatic dialing systems and pre-recorded messages is allowed when contacting wireless phones in the 

collection of debt owed to or granted by the United States. In this time of fiscal constraint, the Administration believes that the Federal Government should ensure 

that all debt owed to the United States is collected as quickly and efficiently as possible and this provision could result in millions of defaulted debt being collected 

. . .’’ 

The practical impact on the care provider community is devastating. It is a significant financial strain on a hospital or any size, let alone a physician’s office to try 

45 

and determine if the phone number a patient left is a cell number or landline number. Then is it is a wireless number, determining if the provision of the number constituted express consent to call them and for what purpose? In addition, when can 

a hospital vendor rely upon the level of consent provided to the hospital to gauge 

if their work on behalf of the hospital is protected at least to the limited extent that 

the hospital is protected. 

The bottom line is that healthcare providers must be able to effectively, efficiently, and economically communicate with their patients. The TCPA robs our community of this fundamental aspect of the careprovider-patient relationship by imposing outdated and artificial restraints on effective communication. In addition, the 

TCPA prevents providers from fulfilling statutory and regulatory mandates in an effective and efficient manner, all at the expense of greater patient care. 

Those in the healthcare sector aren’t looking to inundate consumers with telemarketing calls. The great majority of the communication with patients is care related and mandated by Federal statute or regulation. Any government mandate in 

and of itself should provide a safeguard against unwarranted lawsuits against hospitals for fulfillment of the essence of the caregiver-patient relationship and to make 

calls they are required by law to make. 

In today’s technologically burgeoning society, it makes no sense for the FCC to 

allow technology to be used to contact consumers via their landline phone, but not 

their cell phones. Almost 40 percent of homes today rely on their cell phones as the 

primary means of communication. This number is expected to continue to rise. With 

this the trend, the FCC is missing a golden opportunity to truly modernize the 

TCPA in a way that will have beneficial impacts on industry, while also safeguarding the protections consumers want. 

Today the FCC is looking at the modernization the TCPA the wrong way. The 

FCC should be looking at meeting two mutually achievable goals-balancing the 

needs of consumers for obtaining healthcare and other information quickly and efficiently through their mobile devices, with maintaining the strong anti-telemarketing 

rules that already exist. 

This is not a challenging endeavor. AAHAM has met with key members of the 

FCC several times and the message has been the same. AAHAM has explained in 

great detail what healthcare calls are and what, in the healthcare industry, would 

be considered (and prohibited) healthcare telemarketing calls. Yet, still getting the 

needed changes has been challenging. 

We urge Congress to immediately modernize the TCPA to allow automated dialing 

technology to be used to text or call mobile phones, as long as these texts or calls 

are NOT for telemarketing purposes. These changes are critical to the future of care 

giver-patient communication. 

Mr. Chairman and Ranking Member Nelson this is not a partisan issue, nor 

should it be. This is a simple issue of the need for government regulations to keep 

pace with the needs of today’s consumers and businesses. This is an issue about government working to bring healthcare costs down for consumers, not drive them up 

by continuing to rely on outdated rules and regulations. 

The TCPA is outdated and needs to be modernized immediately. The FCC’s recent 

decision was disappointing and troubling for us in the healthcare industry. 

AAHAM’s petition was very modest and simply asked for clarification on the definition of consent. The ruling did not effectively end this inquiry. This means that the 

care giver community, those upon which we all rely to provide effective healthcare 

to us, will continue to be subjected to costly lawsuits draining resources that would 

otherwise go to patient care. 

Thank you for this opportunity and if you or your staff have any questions, please 

feel free to contact me. I would love to work with the Committee on real solutions 

to this very important issue. 

The CHAIRMAN. Thank you, Mr. Lovich. 

Ms. Desai. 

STATEMENT OF MONICA S. DESAI, PARTNER, 

SQUIRE PATTON BOGGS 

Ms. DESAI. Good morning, Chairman Thune, Ranking Member 

Nelson, and members of the Committee. Thank you very much for 

the opportunity to address the effects of the TCPA on consumers 

and on businesses. 

46 

My name is Monica Desai. I’m a Partner at Square Patton Boggs. 

I’m testifying today in my own individual capacity and not on behalf of any specific client. 

Before joining Squire Patton Boggs, I spent over a decade in senior positions at the Federal Communications Commission, including 

service as Chief of the Consumer and Governmental Affairs Bureau, which is the bureau that oversees implementation of the 

TCPA policies and rules. 

In private practice, I work with a wide range of clients in a—in 

various industry sectors on TCPA compliance. They all share one 

very serious dilemma: how to manage TCPA risk in an environment where the normal, expected, or desired way to communicate 

is by calling a cell phone or sending a text, and where regulators 

and industry standard require certain out-bound communications 

via a call or a text, but where every single call to a cell phone or 

every single text carries with it the potential risk of ruinous damages. 

When Congress implemented the TCPA, it struck a careful balance in protecting consumers from abusive calls that made them 

feel frightened and harassed, protecting public safety entities and 

businesses from the jammed phone lines caused by specialized dialing equipment that automatically generated and dialed thousands 

of random or sequential numbers, and protecting normal, expected, 

or desired communications. 

Today, there are no longer any safeguards protecting callers from 

TCPA liability for normal communications. It doesn’t matter if 

you’re a national bank, a local blood bank, or tire banks. You may 

have obtained prior express consent, but you will never know for 

certain before you make a call whether that number has been reassigned. 

The FCC created a safe harbor, but that safe harbor doesn’t 

work. The safe harbor doesn’t apply after one single reassigned 

call, whether or not there’s any actual knowledge of a reassignment. You may be using modern technology that does not use, or 

even have, a random or sequential number generator, but, according to the FCC, you’re still using an automatic telephone dialing 

system if your equipment has something more than the theoretical 

potential to be modified at some hypothetical point in the future to 

become an ATDS. No one knows what this means. This is not 

workable and not what Congress intended. 

As a result, beneficial consumer communications are chilled, 

compliance-minded entities are put into a Catch 22. Consumers 

trying to manage default and companies trying to engage in financial education are punished. 

First, many types of important and beneficial consumer communications trigger TCPA risk in the current environment, including 

communications from utilities to warn of service outages, mobile 

health programs, such as Text for Baby, schools to provide attendance notifications, nonprofits to ask for cans to restock food banks, 

credit unions to provide low-balance alerts, political candidates to 

provide information regarding townhalls and election information. 

The list goes on and on and on. 

Second, while the environment surrounding communications has 

become increasingly punitive, other regulatory agencies are inVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00050 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\24146.TXT JACKIE
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1 47 U.S.C. § 227; see also 47 C.F.R. § 64.1200. 

creasingly encouraging, and even requiring, contact through phone 

calls and texts. Companies are diverting resources from core business functions and taking inefficient steps to mitigate TCPA risk. 

For example, companies are replacing modern technologies, which 

have many consumer benefits, with low-tech systems and fat-finger 

dialing, although this creates a higher risk of wrong-number calls. 

Larger companies with more resources are paying for multiple 

databases without any assurance of additional accuracy. Small 

businesses often can’t afford to do so. Companies are requiring consumers to provide notice of any phone number change, and subjecting them to lawsuits for failure to do so. 

Finally, I want to emphasize that not getting a call doesn’t mean 

that a debt will go away. What a call is likely to do, if a person 

is reached, is educate the consumer about available repayment options and potentially avoid negative consequences, such as the 

shutting off of a service, a bad credit report, foreclosure, or other 

legal remedy. The Department of Education stated that, when 

servicers are able to contact a borrower, they have a much better 

chance at helping the borrower resolve the delinquency or the default. 

In conclusion, I very much appreciate that the Commerce Committee wants to understand how the TCPA is impacting consumers 

and businesses today. I have three recommendations for restoring 

the balance that Congress worked so hard to achieve. 

First, I would—I would ask Congress to support the creation of 

a reassigned numbers database and allow a safe harbor for any 

caller who checks against the database to confirm that a number 

has not been reassigned. 

A second quicker step would be for Congress to confirm that, 

when it created a statutory defense for prior express consent of the 

called party, it did not intend for that defense to be meaningless. 

Third, Congress should confirm that, when it precisely defined an 

automatic telephone dialing system, it did not intend to broadly 

sweep into that definition any and every modern dialing technology. 

Congress did not intend for the TCPA to serve as a litigation 

trap, with callers being put at untenable risk for normal, expected, 

or desired communications and with consumers ultimately suffering the consequences. 

Thank you, and I look forward to your questions. 

[The prepared statement of Ms. Desai follows:] 

PREPARED STATEMENT OF MONICA S. DESAI, PARTNER, SQUIRE PATTON BOGGS

Good morning Chairman Thune, Ranking Member Nelson, and Members of the 

Committee. Thank you for the opportunity to speak to the Committee today to address the effects of the Telephone Consumer Protection Act (TCPA)1 on consumers 

and business. My name is Monica Desai, and I am a partner at the law firm of 

Squire Patton Boggs. I am testifying today in my individual capacity, and not on 

behalf of any specific client. 

When the TCPA was enacted 25 years ago, it was a welcome shield to protect consumers from abusive calls that made them feel frightened and harassed, and to protect essential public safety services and businesses from the jammed phone lines 

caused by specialized dialing equipment that automatically generated and dialed 

48 

2See H.R. Rep. 102–317 (Nov. 15, 1991); Rules and Regulations Implementing the Telephone 

Consumer Protection Act of 1991, CG Docket No. 02–278, Report and Order, FCC 03–153 

(July 3, 2003). 3See U.S. Chamber of Commerce et al. Notice of Ex Parte, CG Docket No. 02–278, at 4 

(Sep. 24, 2014). 4 47 U.S.C. § 227(b)(1)(A); 47 C.F.R. § 64.1200(a)(1). 

5 47 C.F.R. § 64.1200(a)(2); Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02–278, Report and Order, FCC 12–21, ¶ 20 (Feb. 15, 2012). 6 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG 

Docket No. 02–278, Report and Order, FCC 03–153, ¶ 165 (July 3, 2003). 7 47 U.S.C. § 227(a)(1). 

thousands of random or sequential numbers.2 Over time, the TCPA has been transformed into a sword for harassing and abusive lawsuits, with astonishingly disproportionate settlements for cases with little to no actual harm. Consumers and 

business, as well as governmental entities, suffer from the lack of common sense application of the statutory language to modern technology and the failure to take into 

account how consumers and businesses communicate today. The careful balance 

that Congress struck between protecting consumers and safeguarding beneficial calling practices has all but been eliminated. The resulting state of disarray is not without significant cost. I will focus my testimony on three direct results of unchecked 

abusive litigation under the TCPA: 

(1) detrimental impact to beneficial consumer communications, 

(2) detrimental impact to businesses, non-profits and government entities engaging in normal, expected or desired communications, and 

(3) detrimental impact to consumers trying to manage default and keep current 

on their payments. 

Background 

Before joining Squire Patton Boggs, I spent over a decade in senior positions at 

the Federal Communications Commission (FCC) under both Republican and Democratic administrations, including service as Chief of the Consumer and Governmental Affairs Bureau at the FCC, the Bureau that oversees implementation of 

TCPA policy and rules. 

Since leaving the FCC in 2010, I have advised a broad range of clients in a wide 

variety of industries on TCPA compliance, including those in the retail, financial 

services, debt collection, insurance, energy, education, technology, and communications sectors. They all share one very serious dilemma: how to manage TCPA risk 

in an environment where the normal, expected or desired way to communicate is 

by calling a cell phone or sending a text, and where regulators and industry standards require certain outbound communications via call or text, but where every single call to a cell phone or every single text carries with it the risk of tens of millions 

to hundreds of millions in damages. While the plaintiffs bar advertises apps designed to entrap legitimate businesses with slogans such as ‘‘Laugh all the Way to 

the Bank,’’ 3 such exposure is no joke for compliance-minded companies and organizations, and is ultimately harmful for consumers. This could not have been what 

Congress intended. 

The TCPA—Trigger Points for Litigation 

The TCPA generally prohibits calls made to a cell phone using an ‘‘automatic telephone dialing system’’ (or ‘‘ATDS’’), or artificial or prerecorded voice, without the 

prior express consent of the called party.4 The FCC has since ruled that if such calls 

deliver a telemarketing message, they require a very specific form of ‘‘prior express 

written consent.’’ 5 The FCC has also determined that a text message counts as a 

‘‘call’’ under the TCPA.6 Two of the largest areas of controversy triggering TCPA litigation involve whether an ATDS was used in a particular communication, and what 

happens when a caller calls a number that has been provided, but the number has 

been subsequently reassigned to another person without the knowledge of the caller. 

What is an ATDS? Congress provided that statutory liability for a call to a cell 

phone is not triggered unless a calling party uses an ATDS, or unless a caller uses 

an artificial or prerecorded voice. An ATDS is ‘‘equipment which has the capacity 

. . . to store or produce telephone numbers to be called, using a random or sequential number generator; and . . . to dial such numbers.’’ 7 Whether or not particular 

dialing equipment is an ATDS has been a contentious issue in litigation. The definition turns in part on the ‘‘capacity’’ of that equipment. The term ‘‘capacity’’ is not 

defined in the statute—and many plaintiffs have taken the position that ‘‘capacity’’ 

means future, hypothetical ability to perform the requisite statutory functions—and 

49 

8See, e.g., Hunt v. 21st Mortg. Corp., 2013 U.S. Dist LEXIS 132574, at *11 (N.D. Ala. 2013); 

Gragg v. Orange Cab Co., 995 F. Supp. 2d 1189, 1193 (W.D. Wash. 2014). 9 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 et al., 

CG Docket No. 02–278 et al., Declaratory Ruling, FCC 15–72, ¶ 19 (July 10, 2015) (‘‘2015 TCPA 

Order’’). 10 2015 TCPA Order ¶ 18. 11 2015 TCPA Order ¶ 18. 12 ACA International et al. v. FCC et al., No. 15–1211, Brief for Respondents, at 34–36 (filed 

Jan. 15, 2016); see also ACA International et al. v. FCC et al., No. 15–1211, Brief for Petitioners 

ACA International et al., at 2, 13, 15, 24–25, 30–31 (filed Nov. 25, 2015); 2015 TCPA Order ¶ 21. 13 47 U.S.C. § 227(b)(1)(A); 47 C.F.R. § 64.1200(a)(1). 14 By one estimate, almost 37 million phone numbers are recycled each year. Alyssa Abkowitz, 

Wrong Number? Blame Companies’ Recycling, The Wall Street Journal (Dec. 1, 2011), available 

at http://www.wsj.com/articles/SB10001424052970204012004577070122687462582. 

15 2015 TCPA Order ¶ 85 (‘‘The record indicates that tools help callers determine whether a 

number has been reassigned, but that they will not in every case identify numbers that have 

been reassigned. Even where the caller is taking ongoing steps reasonably designed to discover 

reassignments and to cease calls, we recognize that these steps may not solve the problem in 

its entirety.’’) See also Comments of Twitter, Inc., CG Docket No. 02–278, at 9 (Apr. 23, 2015) 

(stating that ‘‘Twitter obtains information about deactivated numbers from those wireless carriers willing to supply it, and then uses privately purchased data to assess whether the number 

was reassigned’’). 16 2015 TCPA Order ¶ 90. 17 47 U.S.C. § 227(b)(3). 

not the present ability. Last year, despite numerous court cases to the contrary,8

the FCC agreed with the plaintiffs bar and found that ‘‘capacity’’ means ‘‘potential 

ability.’’ 9 Whether or not equipment uses or even has the statutorily required ‘‘random or sequential number generator’’ makes no difference under the FCC’s interpretation. According to the FCC, if there is ‘‘more than a theoretical potential that the 

equipment could be modified’’ to meet the statutory definition of ATDS, then it is 

an ATDS.10 Or, in other words, the statutory definition does not matter. If the 

phone or dialing equipment used to make a call or send a text can ‘‘theoretically’’ 

become an ATDS in the future, the calling party is liable as if using an ATDS now, 

statute notwithstanding. The only equipment that the FCC confirms does not fall 

under this sweeping interpretation is a ‘‘rotary-dial phone.’’ 11 Indeed, the FCC even 

refused to rule out the possibility that a smartphone now qualifies as an ATDS.12

Reassigned Numbers: Who is the ‘‘Called Party’’? Congress created a statutory defense to the TCPA—calls and messages made to cell phones with the ‘‘prior express 

consent of the called party’’ are exempt from liability.13 ‘‘Called party’’ is not defined 

under the statute. Callers have commonly been sued when they obtain the requisite 

consent but the number is then reassigned to a new person unbeknownst to the caller.14 The FCC acknowledged that there is no comprehensive database of reassigned 

numbers, and many carriers do not participate in any database at all.15 Yet the 

FCC ruled strict liability under the TCPA is triggered if a caller calls or texts a 

number that the caller had consent to contact, even if the number was subsequently 

reassigned to a new subscriber without the knowledge of the caller (and without any 

practical way for the caller to find out in advance). The FCC created a ‘‘one call safe 

harbor’’ but the safe harbor stops applying literally after ‘‘one’’ call—whether or not 

there is any actual knowledge of a reassignment,16 including, for example, if the 

caller is greeted with a machine voice-mail message. There is no explanation of how 

the ‘‘safe harbor’’ would work in the text context. This interpretation of ‘‘called 

party,’’ combined with the unworkable ‘‘safe harbor,’’ eviscerates the statutory defense for ‘‘prior express consent’’ provided by Congress. 

These interpretations leave callers in an impossible situation—(1) they cannot 

rely on the statutory definition of an ATDS, because the FCC has determined that 

the definition applies so long as there is the ‘‘theoretical potential’’ that their dialing 

equipment ‘‘could be modified’’ to become an ATDS in the future; and (2) they cannot rely on consent (as Congress intended) because of the lack of any reliable way 

to determine if a number has been reassigned, and the uselessness of the ‘‘one call 

safe harbor.’’ 

Combine this impossible situation with a private right of action for violations, strict liability statutory damages of $500 per call or text (and up to $1,500 for each 

‘‘willful’’ or ‘‘knowing’’ violation),17 and the result is liability exposure in a single 

class action lawsuit quickly reaching tens of millions to hundreds of millions of dollars or higher. 

(1) Detrimental Impact to Beneficial Consumer Communications 

I first became aware of abusive TCPA litigation in 2012, when SoundBite Communications, Inc., located in Bedford, Massachusetts, approached me after it had been 

targeted with a multi-million dollar TCPA class action lawsuit. The purported violaVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00053 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
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18SoundBite Communications, Inc. Petition for Declaratory Ruling, CG Docket No. 02–278 

(Feb. 16, 2012). 19Letter from Senators John F. Kerry and Scott P. Brown to Chairman Julius Genachowski, 

Federal Communications Commission (Apr. 13, 2012); SoundBite Communications, Inc. Notice 

of Ex Parte, CG Docket No. CG 02–278, at 2 n. 4 (June 29, 2012). 20See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991; 

SoundBite Communications, Inc. Petition for Expedited Declaratory Ruling, CG Docket No. 02– 

278, Declaratory Ruling, FCC 12–143, ¶ 8 (Nov. 29, 2012). 21 Retail Industry Leaders Association Petition for Declaratory Ruling, CG Docket No. 02–278 

(Dec. 30, 2013); Comments of RILA, CG Docket No. 02–278, at 2 (Feb. 21, 2014). 22 2015 TCPA Order ¶¶ 103–06 (the FCC ‘‘agree[d] with commenters’’ that ‘‘consumers welcome’’ such text messages). 23 Edison Electric Institute and the American Gas Association Petition for Expedited Declaratory Ruling, CG Docket No. 02–278, at 3 (Feb. 12, 2015) (‘‘EEI/AGA Petition’’). The EEI/AGA 

Petition explains that one EEI member company was sued under the TCPA after it sent a text 

message to its customers that had previously provided a wireless telephone number to the company notifying them of a new text program designed ‘‘to inform customers of power outages by 

text message, and to allow customers to report an outage to the utility by text message.’’ Id. 

at 10; see also Grant v. Commonwealth Edison, No. 1:13–cv–08310 (N.D. Ill.). 24 Anthem Petition for Declaratory Ruling and Exemption Regarding Non-Telemarketing 

Healthcare Calls, CG Docket No. 02–278, at 4–5 (June 10, 2015) (‘‘Anthem Petition’’); see also 

tion? Sending an immediate, one-time confirmation reply message whenever a customer sent a request to stop receiving future text messages. In sending the confirmation message, SoundBite was adhering to consumer best practices, and acting 

consistent with wireless industry requirements to send such a confirmation. I 

learned that SoundBite was not alone—at the time, many other companies, including Redbox, American Express, Barclays Bank, Citibank, Taco Bell, NASCAR, the 

NFL, and GameStop, were all being targeted with multi-million dollar class action 

lawsuits based on these one-time confirmations. Due to the lawsuit, SoundBite, then 

a publicly traded company with approximately 150 employees, was threatened with 

going into bankruptcy because of the potential risk of TCPA exposure. We petitioned 

the FCC to provide relief on this issue.18 Then-Senator John Kerry and Senator 

Scott Brown asked the FCC to take into consideration that sending a confirmation 

in response to a request to cease future text messages ‘‘is not harmful to consumers, 

it is useful.’’ 19 We were grateful the FCC recognized the usefulness of such messages to consumers and found them to be consistent with consumer expectations 

when it granted our petition and declared a simple confirmation of an opt-out did 

not violate the TCPA.20

Similarly, the Retail Industry Leaders Association (RILA) explained to the FCC 

that while it has become increasingly common for smartphone-equipped consumers 

to expect and demand concierge-like, personalized experiences from retailers, the 

fear of TCPA litigation threatened one particularly popular emerging service—‘‘on 

demand’’ texts.21 In that context, a consumer sees a display advertisement (e.g., a 

store display ad to text ‘‘offer to 12–345 for 20 percent off your next purchase’’). If 

interested, the consumer texts the word ‘‘offer’’ to 12–345, and receives a near instant response text containing the desired offer. We were again grateful that the 

FCC recognized that this type of convenient and efficient communication—that consumers were proactively requesting—should not subject a retailer to frivolous class 

action lawsuits.22

However, there are many, many other types of communications that are also useful to consumers, or that are otherwise normal, expected or desired, that are already 

the subject of TCPA class action litigation or create risk for TCPA liability—with 

potentially ruinous results for the entities sending the text messages or making the 

calls. For example: 

• Utilities are at risk: Calls or texts to warn about planned or unplanned service 

outages, provide updates about outages or service restoration, ask for confirmation of service restoration or information about the lack of service, provide notification of meter work, tree-trimming, or other field work, verify eligibility for 

special rates or services, such as medical, disability, or low-income rates, programs and services, warn about payment or other problems that threaten service curtailment, and provide reminders about time-of-use pricing and other demand/response events, are all threatened by TCPA litigation.23

• Mobile health programs are at risk: The U.S. Department of Health and Human 

Services has touted mobile health programs as ‘‘an opportunity to improve 

health knowledge, behaviors, and clinical outcomes, particularly among hard-toreach populations’’ through text programs, including, for example, to influence 

behavior changes to improve short-term smoking cessation outcomes as well as 

short-term diabetes management and clinical outcomes.24 Federal agency poliVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00054 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
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U.S. Dep’t of Health & Human Services, Using Health Text Messages to Improve Consumer 

Health Knowledge, Behaviors, and Outcomes: An Environmental Scan, at 1 (May 2014), available at Khttp://www.hrsa.gov/healthit/txt4tots/environmentalscan.pdf. 25 Anthem Petition at 5–8 (noting the societal benefits of these communications). 26 Blackboard, Inc. Petition for Declaratory Ruling, CG Docket No. 02–278, at 8 (Feb. 24, 

2016). 27 Comments of National Council of Nonprofits, CG Docket No. 02–278, at 2–3 (Sept. 24, 

2014). 28The FCC recognized that financial institutions must be able to contact consumers to quickly 

alert them to fraud, a data breach, related remediation, and money transfers. 2015 TCPA Order 

¶¶ 125, 127–39. Although the FCC provided an exemption for such communications, the conditions it imposed in connection with the exemption made the exemption virtually unusable. See 

American Bankers Association Petition for Reconsideration, CG Docket No. 02–278 et al. 

(Aug. 8, 2015). 29See Marco Trujillo, Lawmakers could be violating robocall restrictions, The Hill (July 28, 

2015); Federal Communications Commission, FAQs—Tele-Town Halls (July 31, 2015), available 

at https://www.fcc.gov/document/faqs-tele-town-hall-robocalls. 

30The American Association of Political Consultants, The Democratic Party of Oregon, Public 

Policy Polling, Tea Party Forward PAC, and Washington State Democratic Central Committee 

have filed a lawsuit alleging that the ban on certain calls to cell phones under the TCPA is 

an unconstitutional violation of their First Amendment rights because it is content based and 

cannot withstand strict scrutiny. American Association of Political Consultants, Inc. et al. v. Loretta Lynch, Case No. 5:16–cv–00252–D, Complaint (May 12, 2016); see also Shamblin v. Obama 

for America et al., 2015 U.S. Dist. LEXIS 54849 (M.D. Fla. Apr. 27, 2015) (complaint alleged 

violations of TCPA based on prerecorded calls explaining how to vote by mail, and calls encouraging early voting, instructions to bring a driver’s license to vote, and voting locations; case decided on class certification issue without discussion of TCPA claims). 31 ACA International et al. v. FCC et al., No. 15–1211, Brief of Retail Litigation Center, Inc., 

National Retail Federation, and National Restaurant Association as Amici Curiae in Support of 

Petitioners, at 9–10 (D.C. Cir. filed Dec. 2, 2015). 

cies encourage aggressive use of such programs and use text messaging and 

ATDS calls, but TCPA lawsuits stifle such programs. Anthem points out that 

federally supported text messaging initiatives are all at risk, including 

Text4baby, which provides information and referral times keyed to the prenatal 

stage or age and developmental stage of the child; QuitNowTXT, which delivers 

day-specific quit messages to persons in the process of smoking cessation; and 

Health Alerts On-the-Go, which provides the Centers for Disease Control and 

Prevention’s health information, including seasonal flu and public health emergencies.25

• Important school communications are threatened by TCPA litigation: Attendance 

messages alerting parents that a child did not arrive at school as expected; 

alerts regarding emergency situations (weather, facilities issue, fire, health risk, 

threat situation); outreach messages providing information regarding school activities (teacher conferences, back-to-school night); and survey messages, which 

allow recipients to RSVP to events or provide input on an important issue using 

a telephone keypad, are all at risk.26

• Nonprofits are equally impacted: The National Council of Nonprofits has noted 

that nonprofits—including entities like American Red Cross, Salvation Army, 

United Ways, food banks, emergency shelters, food pantries and soup kitchens—call and send text messages for a wide variety of reasons, including to provide event updates, schedule changes, and important safety information, and to 

provide patients and clients with reminders of appointments, and other helpful 

notifications that people generally want.27 These communications are subject to 

TCPA risk. 

• Financial institutions are constrained in their ability to deliver time-sensitive 

and valued financial communications: Fraud and identity theft alerts, out-ofpattern activity notices, data breach information, fund transfer confirmations, 

responses to service inquiries, FEMA disaster related financial relief and service options, fee avoidance and low balance notifications, due date reminders, notifications to prevent lapses in insurance coverage, account closure and other 

milestone notice, and loan repayment counseling, are all at risk.28

• Political discourse and communications that provide important information 

about issues of public concern, including ‘‘tele-town hall’’ discussions,29 the voting process, and other election information.30

• Shopping and retail notifications requested by consumers: Threatened communications include those that inform a consumer that an online purchase is available or has been delivered or offers and discount information that a consumer 

signs up for and expects to receive.31

52 

32See, e.g., Comments of Twitter, Inc., CG Docket No. 02–278, at 3 (Apr. 22, 2015) (Twitter 

allows users to choose to ‘‘have Tweets sent to their cell phones as text messages’’ by inputting 

their phone numbers and providing express consent, but because telephone numbers are reassigned so frequently and due to the ‘‘hyper-litigious [TCPA] environment, innovative companies 

increasingly must choose between denying consumers information that they have requested or 

being targeted by TCPA plaintiffs’ attorneys filing shake-down suits.’’). 33 Rubio’s Restaurant, Inc. Petition for Declaratory Ruling, CG Docket No. 02–278, at 1–3 

(Aug. 11, 2014) (In order to ‘‘promptly respond to health and safety issues affecting the over 

190 of Rubio’s restaurant locations,’’ Rubio’s provides a ‘‘Remote Messaging’’ service that contacts only telephone numbers of Rubio’s ‘‘Quality Assistance’’ staff. The Remote Messaging service is used ‘‘exclusively to report food safety-related issues, including, but not limited to, alleged 

foodborne illnesses, alleged foreign objects found in food, or suspicions of a team member having 

a disease transmittable through food.’’ Rubio’s was sued under the TCPA when a Remote Messaging alert was ‘‘sent to a cellphone number previously assigned to a Rubio’s [Quality Assistance] Staff member who subsequently lost his phone,’’ after which the number was reassigned 

without Rubio’s knowledge.). 34The Center for Disease Control’s December 2015 Wireless Substitution Report estimates 

wireless use during the first half of 2015, finding: (1) as of June 2015, 71.3 percent of young 

adults (ages 25–29) lived in wireless only households. Also, 67.8 percent of adults aged 30–34 

lived in wireless-only households, and the percentage of adults living with only wireless telephones decreased as age increased beyond 35 years—56.6 percent for those 35–44; 40.8 percent 

for those 45–64; and 19.3 percent for those 65 and over; and (2) the rate of wireless-only households has grown significantly over the past several years. For example, the number of adults 

aged 25–29 that live in households with only wireless telephones increased by 10 percentage 

points between 2012 and 2015. The number of adults aged 35–44 that live in wireless-only 

households grew by 17.5 percentage points between June 2012 and June 2015. See U.S. Dep’t 

of Health and Human Services, Centers for Disease Control and Prevention, Wireless Substitution: Early Release of Estimates from the National Health Interview Survey, January–June 

2015, at 6 (Dec. 2015), available at http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless 

201512.pdf. 35See, e.g., the CFPB ‘‘Early Intervention Rule.’’ 12 C.F.R. § 1024.39(a). 36 CTIA—The Wireless Association, CTIA Short Code Monitoring Program Short Code Monitoring Handbook, v. 1.5.2, at 2 (Oct. 1, 2015) (requiring that an ‘‘opt-in confirmation message 

. . . must be sent to customers always’’ (emphasis retained)). 37 2015 TCPA Order ¶ 85 (the FCC ‘‘agree[d] . . . that callers lack guaranteed methods to discover all reassignments immediately after they occur’’). 38See WebRecon, LLC, Out Like a Lion . . . Debt Collection Litigation & CFPB Complaint 

Statistics, Dec 2015 & Year in Review, Consumer Litigation: 2007–2015 (2016), available at 

http://webrecon.com/out-like-a-lion-debt-collection-litigation-cfpb-complaint-statistics-dec-2015- 

year-in-review/. 39 Id. 40 ‘‘A problematic situation for which the only solution is denied by a circumstance inherent 

in the problem or by a rule.’’ Merriam-Webster, Catch-22 (last visited May 16, 2016), available 

at http://www.merriam-webster.com/dictionary/catch%E2%80%9322. 

41 12 C.F.R. § 1024.39(a). 

• Social media notifications that consumers expect and desire.32

• Food safety notices have been the subject of TCPA litigation.33

A confluence of factors have fueled this fire of TCPA litigation: (1) increasing reliance on cell phones as the primary or only means of communications;34 (2) increasing requirements by regulatory agencies to make specific outbound communications;35 (3) industry guidelines requiring certain outbound communications in order 

to send messages through text channels;36 and (4) the fact that there is no reliable 

way to determine if a number has been reassigned.37 Combine these factors with 

high strict liability damages, no limits on total damages, and very low barriers to 

filing even the most frivolous of lawsuits, and the reasons for skyrocketing class action litigation in this area are clear. 

Unfortunately, these key background factors have not only persisted, but the situation has only become worse. In 2010, there were 354 TCPA cases filed.38 In 2015, 

there were 3,710.39

(2) ‘‘Catch-22’’ for Businesses, Non-Profits and Governmental Entities 

The specter of high-stakes ‘‘bet the company’’ litigation—which can be based on 

a single call or a single text—and which has now been amplified by the FCC’s recent 

interpretations, has made it punitive for businesses and other entities to engage in 

normal, expected or desired communications by call or text. 

Financial institutions in particular have often been trapped in a ‘‘catch-22’’ 40 as a result of myriad statutory and regulatory obligations to make outbound communications to customers, while FCC rules penalize them for doing so. For example, 

the Consumer Financial Protection Bureau’s (CFPB) ‘‘Early Intervention Rule’’ requires ‘‘live contact’’ or a good faith effort to establish live contact within 36 days 

after a mortgage loan becomes delinquent.41 The Home Affordable Modification Program requires that an entity ‘‘proactively solicit’’ customers for inclusion—by makVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00056 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
53 

42 Home Affordable Modification Program, Handbook for Servicers of Non-GSE Mortgages, 

Making Home Affordable Program, at 46 (Dec. 2, 2010), available at https://www.hmpadmin 

.com/portal/programs/docs/hamplservicer/mhahandbookl30.pdf. 43 CFPB, CFPB Mobile Financial Services: A summary of comments from the public on opportunities, challenges, and risks for the underserved., at 10. (Nov. 2015), available at http:// 

files.consumerfinance.gov/f/201511lcfpblmobile-financial-services.pdf. 44 CFPB, Prepared Remarks by Richard Cordray at the CFPB Roundtable on Overdraft Practices (Feb. 22, 2012), available at http://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-by-richard-cordray-at-the-cfpb-roundtable-on-overdraft-practices/. 45Federal Deposit Insurance Corporation, Request for Comments on Mobile Financial Services 

Strategies and Participation in Economic Inclusion Demonstrations (May 3, 2016), available at 

https://www.fdic.gov/news/news/financial/2016/fil16032.pdf. 46Federal Deposit Insurance Corporation, Qualitative Research for Mobile Financial Services 

for Underserved Consumers, at 19 (Oct. 30, 2015), available at https://www.fdic.gov/about/ 

comein/2015/come-in-2015.pdf. 47 Id. at 21. 48 Id. 49 CTIA—The Wireless Association, CTIA Short Code Monitoring Program Short Code Monitoring Handbook, v. 1.5.2, at 2 (Oct. 1, 2015). 50See Prepared Statement of Edith Ramirez, Protecting Personal Consumer Information from 

Cyber Attacks and Data Breaches, Before the Senate Committee on Commerce, Science, and 

Transportation, 113th Cong., at 2 (Mar. 26, 2014) (explaining that the ‘‘FTC supports Federal 

legislation that would strengthen existing data security standards and require companies, in appropriate circumstances, to provide notification to consumers when there is a security breach’’), 

available at https://www.ftc.gov/system/files/documents/publiclstatements/294091/ramirez ldatalsecuritylorallstatementl03-26-2014.pdf. 51For example, New York requires utilities to provide ‘‘[s]pecial notice . . . during the cold 

weather protection period (November 1 to April 15) before any heat related utility service can 

be shut off. The utility must notify each tenant that service will be shut off and must also attempt to find out if a serious health or safety program would be caused in the household by 

the shutoff.’’ See New York State Dep’t of Public Service, Consumer Guide: The Handbook for 

Utility Customers with Disabilities (Dec. 18, 2012), available at http://www3.dps.ny.gov/W 

/PSCWeb.nsf/All/1882DD3FA554D6D585257687006F395C?OpenDocument. 52See Consumer Product Safety Commission, Recall Guidance, Recall Checklist (last visited 

May 16, 2016), available at http://www.cpsc.gov/en/Business—Manufacturing/Recall-Guidance/. 

ing a minimum of four telephone calls to the customer at different times of the 

day.42

At the same time that financial regulators are advocating that financial institutions communicate with borrowers and create financial inclusion tools, the TCPA as 

interpreted by the FCC is stifling the exact type of communications that would benefit consumers. For instance, the CFPB recognized that especially for ‘‘economically 

vulnerable consumers,’’ tracking transactions through mobile technologies such as 

text messaging may help consumers ‘‘achieve their financial goals’’ and can ‘‘enhance access to safer, more affordable products and services in ways that can improve their economic lives.’’ 43 And, CFPB Director Richard Cordray positively described the use of text alerts to provide real time information about funds to customers as an ‘‘innovative approach[] to improving customer service.’’ 44 Further, just 

this month, the Federal Deposit Insurance Corporation (FDIC) released a request 

for comment on ‘‘Mobile Financial Services Strategies and Participation in Economic 

Inclusion Demonstrations’’ 45 as a continuation of their October 2015 qualitative research that found that text message alerts give consumers ‘‘Access to account information;’’ ‘‘Help[] consumers avoid fees;’’ and ‘‘Help[] monitor accounts for fraud.’’ 46

In fact, the FDIC research concluded that underbanked consumers may prefer texts 

to e-mails when receiving alerts because texts are ‘‘Faster,’’ ‘‘Easier to receive,’’ ‘‘Attention grabbing,’’ and ‘‘Quicker and easier to digest.’’ 47 According to an Underbanked Mobile Financial Services User interviewed as part of the study, ‘‘[t]ext-it’s 

immediate. E-mail, you have to go in and actually be checking your e-mail account.’’ 48

But it is not just financial institutions that are caught in this bind. The wireless 

industry requires sending an affirmative ‘‘opt-in confirmation message’’ in order for 

companies to send text messages associated with company programs across carrier 

networks.49 The Federal Trade Commission has emphasized the importance of 

proactive communications in connection with data breaches and is urging required 

notifications.50 Utilities are required under some state laws to engage in proactive 

communications.51 The Consumer Product Safety Commission’s product safety ‘‘Recall Checklist’’ recommends that companies send ‘‘text messages to customers’’ as 

part of an ‘‘effective and comprehensive product safety recall.’’ 52

Compliance-minded companies are diverting resources from core business functions and taking inefficient steps to avoid frivolous lawsuits, with detrimental results for both companies and consumers: 

54 

53 ACA International Notice of Ex Parte, CG Docket No. 02–278, at 3 (May 9, 2014). 54See Leschinsky v. Inter-Continental Hotels Corporation et al., Case No. 8:15–cv–01470–JSM– 

MAP, Defendants Orange Lake Country Club, Inc., and Inter-Continental Hotel Corporation’s 

Dispositive Motion for Summary Judgment and Incorporated Memorandum of Law, at 1–2, 5– 

9 (Sept. 28, 2015). 55 2015 TCPA Order ¶ 86, n. 302. In his dissent from the Order, Commissioner Pai stated that 

perhaps the ‘‘most shocking’’ part of the ruling was the FCC’s suggestion that ‘‘companies . . . 

sue their customers.’’ 2015 TCPA Order Dissenting Statement of Commissioner Ajit Pai at 121. 

Commissioner O’Rielly’s dissent also noted the oddity of the FCC’s position that it is ‘‘reasonable 

to have companies sue their own customers.’’ 2015 TCPA Order Statement of Commissioner Michael O’Rielly Dissenting in Part and Approving in Part at 134 (emphasis retained). 56 ACA International Notice of Ex Parte, CG Docket No. 02–278, at 2 (May 9, 2014). 

Purposefully Adding Technology Inefficiencies—Automated dialing technologies 

have many consumer benefits: they improve the ability to honor consumer contact preferences (such as time of day to call, specific dates to call, to what number to call); they improve the ability to honor ‘‘do not call’’ requests; they help 

govern call frequency attempts (daily, weekly, monthly); they help manage time 

between calls; and they improve access to historical account information, and 

information regarding financial assistance programs. Yet despite these benefits, 

companies that have already spent tens of thousands to hundreds of thousands 

of dollars on dialing technologies that are not an ATDS based on the statutory 

definition, are now evaluating and spending resources to add functions such as 

‘‘self-destruct’’ mechanisms that will wipe out a calling system in the event a 

software update attempt is made. Companies are making calls from the most 

basic, ‘‘de-engineered’’ systems, but are still getting sued on the theory that 

such a calling system could theoretically get ‘‘plug[ged] . . . into’’ an ATDS.53

Companies are moving to offshore call centers (where manual dialing is more 

efficient) and requiring manual dialing on desktop phones—and still getting 

sued.54 Companies are purposefully interjecting elements of ‘‘human intervention’’ to make calls even where that carries a risk of wrong number calls and 

is less efficient. 

Databases—Companies that have more resources are sometimes paying for multiple databases to check for reassigned numbers, still without any assurance of 

accuracy (as many carriers do not participate in any database at all). Smaller 

organizations, and those with more limited resources such as many non-profits, 

cannot afford to do so. 

Terms and Conditions—Per the FCC’s suggestion in the 2015 Order, companies 

are starting to add requirements to their terms and conditions that consumers 

who consent to receiving calls or texts must affirmatively provide a notification 

if they have abandoned the number they have provided. The FCC stated that 

‘‘[n]othing in the TCPA or our rules prevents parties from creating, through a 

contract or other private agreement, an obligation for the person giving consent 

to notify the caller when the number has been relinquished,’’ and that ‘‘the caller may wish to seek legal remedies for violation of the agreement.’’ 55 It appears 

that the FCC is suggesting callers sue their customers for not notifying the caller when they change phone numbers. 

Reducing Communications—Companies are evaluating what communications 

are absolutely necessary, and reducing consumer-beneficial communications as 

described in the first section. Indeed, many companies have chosen to stop or 

significantly curtail elective helpful communications. 

Insurance Premiums—Due to the high risk of exposure to frivolous litigation 

and potentially astronomical damages, there is very little choice for TCPA insurance (sometimes none at all); if insurance is available, the premiums and the 

deductibles are extremely high.56

(3) Detrimental Impact to Consumers Trying to Manage Default and Keep Current 

on Payments 

Keeping customers up to date on payments and managing their default is critical 

for financial well-being. Defaulting on payments can have long-term devastative 

consequences for consumers by impacting their credit score and ability to obtain 

credit in the future. Most people need credit to buy their home, finance their child’s 

education, or start the small business they have worked toward. These purchases 

are made much more difficult with a damaged—or even bruised—credit score, which 

is why it is vital that consumers are aware of their financial obligations. 

It is important to keep in mind that not getting a call does not mean that the 

debt will somehow go away. What a call is likely to do, if a person is reached, is 

educate the consumer about available repayment options, potentially avoid negative 

55 

57 Id. at 5. 58 City of Philadelphia, Request for Information, Accounts Receivable Management & Collections, The Office of the Chief Revenue Collections Officer, Exhibit 1 at 2 (Aug. 8, 2013); ACA 

International Notice of Ex Parte, CG Docket No. 02–278, at 1 (May 5, 2014). 59 H.R. Rep. 102–317 (Nov. 15, 1991) (emphasis added). 60The Office of Management and Budget, Budget of the United States Government, Fiscal Year 

2013, at 232 (2012), available at https://www.whitehouse.gov/sites/default/files/omb/budget 

/fy2013/assets/budget.pdf; The Office of Management and Budget, Analytical Perspectives, 

Budget of the United States Government, Fiscal Year 2013, at 168 (2012), available at https:// 

www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/spec.pdf; The Office of 

Management and Budget, Budget of the United States Government, Fiscal Year 2016, at 116 

(Feb. 2, 2015), available at https://www.whitehouse.gov/sites/default/files/omb/budget/ 

fy2016/assets/budget.pdf; The Office of Management and Budget, Analytical Perspectives, Budget of the United States Government, Fiscal Year 2016, at 127–28 (2015), available at https:// 

www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/spec.pdf. 61 Bipartisan Budget Act of 2015 § 301; 47 U.S.C. § 227(b)(1)(A)(iii). However, the FCC has proposed rules that would appear to thwart this Congress’ intent in creating an exemption for Federal debt calls, by limiting the number of calls that can be placed to delinquent or defaulting 

account holders to three calls per month—regardless of whether or not the call results in a conversation with the borrower. Three calls per month is not sufficient to (1) have a live conversation with a borrower; (2) discuss available repayment, forbearance and deferment options with 

the borrower; and (3) enroll the borrower in the right plan based on the borrower’s circumstances. See, e.g., Statement of Commissioner Michael O’Rielly Dissenting in Part and Approving in Part, Rules and Regulations Implementing the Telephone Consumer Protection Act of 

1991, CG Docket No. 02–278, Notice of Proposed Rulemaking, FCC 16–57, at 2 (May 6, 2016). 

consequences such as shutting off of a service, increased debt due to added collection 

costs and fees, a bad credit report that can harm future borrowing, foreclosure on 

a home, repossession, or other legal remedy. There are consumer benefits to these 

calls in addition to avoiding default—for example, by one estimate, around 25 percent of identity theft occurrences are discovered through the debt collection process.57

In addition to consumers’ critical credit needs, servicing debt and managing default are critical to government and non-government entities alike. Being able to 

make a call to discuss a debt is impactful for the Federal Government, state and 

local governments, colleges and universities, healthcare institutions, retailers, financial institutions, and indeed all types of businesses large and small. 

The City of Philadelphia, for example, said in a 2013 Request for Information that 

funds recovered by debt collection agencies ‘‘are essential to support important community services, like public safety, a clean environment and quality public schools. 

Failure to collect all funds owed to the City jeopardizes much needed services and 

increases the financial burden on compliant taxpayers and residents.’’ 58

Nothing in the legislative history suggests that Congress intended the TCPA to 

be used as a shield against communications between a creditor and its customers 

concerning a past due obligation. Indeed, as the report of the House Committee on 

Energy and Commerce clearly states: 

The restriction on calls to emergency lines, pagers, and the like does not apply 

when the called party has provided the telephone number of such a line to the 

caller for use in normal business communications. The Committee does not intend for this restriction to be a barrier to the normal, expected or desired communications between businesses and their customers. For example, a retailer, 

insurer, banker or other creditor would not be prohibited from using an automatic dialer recorded message player to advise a customer (at the telephone 

number provided by the customer) that an ordered product had arrived, a service was scheduled or performed, or a bill had not been paid.59

Fundamentally, congressional recognition of TCPA privacy rights applicable to 

mobile telephone customers was intended to provide choice of contact, not isolation 

from contact. Those who elect to conduct telecommunications solely by cell phone, 

or who choose to identify mobile telephone numbers as their preferred method of 

contact in dealing with service providers, have exercised the privacy choice protected 

by the TCPA. It is not good policy to make that choice more burdensome and less 

efficient. 

To conclude otherwise would significantly harm both private and public debt collection programs, further straining our distressed economy. Indeed, the White 

House has over the last four years consistently emphasized the importance of contacting debtors specifically ‘‘via their cell phones’’ in connection with the collection 

of debt owed to or granted by the United States.60 This Congress agreed when it 

exempted such calls from the TCPA.61

The same principle—that a call to a cell phone is beneficial in helping borrowers 

resolve delinquencies—applies with equal force to state and local governments, and 

56 

62 U.S. Dep’t of Education, Strengthening the Student Loan System to Better Protect All Borrowers, at 16 (Oct. 1, 2015), available at http://www2.ed.gov/documents/press-releases/strength 

ening-student-loan-system.pdf. 63 Navient Corp. Notice of Ex Parte, CG Docket No. 02–278, at 2 (Mar. 29, 2016). 64 Cynthia Battle & Eileen Marcy, Late Stage Delinquency Assistance, Federal Student Aid, 

at 7 (last visited May 16, 2016), available at https://www.ifap.ed.gov/presentations/attach 

ments/06FSAConfSession41.ppt. 65See 15 U.S.C. § 1692 et seq.; Pub. L. 111–203; 15 U.S.C. § 1681 et seq.; 15 U.S.C. § 45 et seq.; Pub L. 106–102; 15 U.S.C. § 1601 et seq.; 15 U.S.C. § 1637(c); Title 11 of the U.S.C.; 12 

U.S.C. § 2601 et seq. There are also numerous state laws in place providing oversight and constraint. Approximately 35 states have laws or requirements specific to debt collection communications. Examples: Cal. Civ. Code § 1812.700 (special text requirement); Iowa Code Ann. 

§ 537.7103(3)(a)(6) (call frequency); Me. Rev. Stat. Ann. tit. 32 § 11013(3)(C) (postdated checks); 

Minn. Stat. § 332.37(13) (prerecorded messages); W. Va. Code Ann. § 46A–2–125(d) (call frequency). Approximately 40 states have laws specific to licensing. 66 15 U.S.C. §§ 805(c), 1692c. 67See 15 U.S.C. § 1692l(d). 68See Consumer Financial Protection Bureau, Fall 2015 Regulatory Agenda submitted by the 

Consumer Financial Protection Bureau to the Office of Management and Budget (Nov. 20, 2015), 

available at http://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATIONlGETl 

AGENCYlRULElLIST¤tPub=true&agencyCode=&showStage=active&agencyCd=3170. 69 CFPB, Fair Debt Collection Practices Act, CFPB Annual Report 2016, at 2 (Mar. 2016), 

available at http://files.consumerfinance.gov/f/201603lcfpb-fair-debt-collection-practices-act 

.pdf. 

businesses large and small. This is supported by findings of the Federal Government and loan servicers. The U.S. Department of Education stated in a 2015 report 

that when ‘‘servicers are able to contact a borrower, they have a much better chance 

at helping that borrower resolve a delinquency or default.’’ 62 For example, there are 

Income Driven Repayment (IDR) plans available to qualifying borrowers under 

which monthly payments may be as low as $0, and qualifying borrowers may have 

remaining balances forgiven after 20–25 years. The U.S. Department of Education 

endorsed allowing servicers to use modern technology to contact borrowers to help 

educate them about this and other repayment options and avoiding default. 

One servicer estimates that it is able to help more than 90 percent of student loan 

borrowers avoid default when it has a telephone conversation with the borrower; 

conversely, 90 percent of student loan borrowers who have not had a telephone conversation with the servicer default.63 And Federal Student Aid—an office of the U.S. 

Department of Education—estimates that 93 percent of persons in default ‘‘were not 

successfully contacted by telephone during the 360 day collection effort.’’ 64

Moreover, there is in place substantial oversight of the operating practices of financial service companies, including their interactions with consumers, through 

Federal laws such as the Fair Debt Collection Practices Act (FDCPA), the DoddFrank Act prohibition against Unfair, Deceptive and Abusive Acts and Practices, the 

Fair Credit Reporting Act, section 5 of the Federal Trade Commission Act, the 

Gramm Leach Bliley Act, the Truth in Lending Act, the Fair Credit and Charge 

Card Disclosure Act, the Federal Bankruptcy Code, and the Real Estate Settlement 

Procedures Act, and through oversight from a number of different Federal entities 

including the Federal Reserve, Federal Trade Commission, FDIC, Office of the 

Comptroller of the Currency, and the CFPB.65 Additionally, the FDCPA explicitly 

outlines how a consumer can end any communications with a debt collector.66

It is also important to recognize that when Congress enacted the Dodd-Frank Act, 

it expressly assigned the regulation of debt collection to the CFPB. It granted the 

Bureau rulemaking authority for the FDCPA, which was designed to protect consumers when communicating with debt collectors and to provide remedies for abusive collection practices.67 Significantly, the CFPB has announced its intention to 

initiate a rulemaking process to update and modernize the FDPCA and to promulgate comprehensive rules to govern the debt collection industry, covering first-party 

creditors (i.e., financial institutions collecting debt owed to them) under its DoddFrank Act authority to prevent unfair, deceptive or abusive practices, and thirdparty collectors under the FDCPA.68

Consistent with this mandate, the CFPB has been actively pursuing abusive debt 

collection practices and expects to release a debt collection proposed rule this year. 

In the CFPB’s fifth annual Fair Debt Collection Practices Act Report, CFPB Director 

Cordray indicated that ‘‘[i]n 2015 such actions by the CFPB returned $360 million 

to consumers wronged by unlawful debt collection practices and collected over $79 

million in fines. During this time period, our colleagues at the Federal Trade Commission (FTC) banned 30 companies and individuals that engaged in serious and repeated violations of the law from ever again working in debt collection.’’ 69 Further, 

the CFPB has resources on its website informing consumers of their rights against 

57 

70 CFPB, Are there laws that limit what debt collectors can say or do? (last visited May 16, 

2016), available at http://www.consumerfinance.gov/askcfpb/329/are-there-laws-that-limitwhat-debt-collectors-can-say-or-do.html. 71 CFPB, What is harassment by a debt collector? (last visited May 16, 2016), available at 

http://www.consumerfinance.gov/askcfpb/336/what-is-harassment-by-a-debt-collector.html. 72 CFPB, Is there a limit to how many times a debt collector can call me? (last visited May 16, 

2016), available at http://www.consumerfinance.gov/askcfpb/1397/there-limit-how-many-timesdebt-collector-can-call-me.html. 

debt collectors, including explaining the laws mandating what debt collectors can or 

cannot do,70 what is harassment by a debt collector,71 and how many times a debt 

collector may call a consumer.72

Correcting the Imbalance 

I appreciate that the Commerce Committee wants to understand how the TCPA, 

enacted in 1991, is impacting consumers and businesses today. The current TCPA 

litigation environment, combined with the FCC’s recent interpretations, is punitive 

to compliance-minded businesses, governmental entities, and non-profits that want 

to engage in normal, expected or desired communications with consumers. The environment is also detrimental to consumers, who expect to communicate via their cell 

phones and through texts, and who find it convenient and beneficial to do so. In 

today’s environment, a compliance-minded caller or sender of text messages can 

have obtained the prior express consent that Congress established would protect a 

caller from TCPA liability, can be using modern technology that is not an ATDS 

under the statutory definition, and can still be subjected to potentially ruinous liability for every single call or text. This is fundamentally unfair to any entity making calls or sending texts, and is fundamentally unfair to consumers—who are increasingly paying the societal costs of abusive lawsuits. When Congress enacted the 

TCPA 25 years ago, it sought to implement a careful balance between protecting 

beneficial, normal, expected or desired communications and protecting public safety 

entities and consumers from abusive practices. That balance must be restored. 

Mandate a Reassigned Number Database: One idea moving forward would be to 

establish a telephone number subscriber database that would require the participation of all carriers, and timely updates by the carriers to the database. The database 

would link each telephone subscriber—and to the extent possible any persons on 

that subscriber’s family or business plan—with their telephone number. Callers or 

those sending text messages could check against the database to determine whether 

a number for which they have been given consent to call or text now belongs to a 

different subscriber. A TCPA safe harbor should be provided for callers who check 

the database for confirmation that the number that they have been provided consent 

to call or text has not been reassigned. 

Privacy concerns could be avoided by allowing a calling party to check against the 

database only to see whether (and if so, when) a number has been reassigned to 

a different subscriber—but not provide the identity of the subscriber. There is no 

doubt that any combined database of 80+ carriers would take significant time, effort, and resources. If this could be accomplished, the benefits would be tremendous. 

Compliance-minded callers and texters who have obtained prior express consent 

could rely on that consent, as Congress intended. Those callers or texters would not 

be placed in the impossible situation of risking TCPA liability for each and every 

call or text based on a factor over which they have zero control—knowledge of a reassignment. Consumers would be less likely to receive calls or texts based on a reassigned number, and would be less likely to miss important, beneficial or desirable 

communications that they provided consent to receive. 

Prior Express Consent is Not Meaningless: Another, more simple option may be 

for Congress to confirm that when it provided a statutory defense for ‘‘prior express 

consent of the called party,’’ it did not intend for that defense to be meaningless. 

Congress intended that when a caller received prior express consent, it could rely 

on that consent until a caller had actual knowledge that consent has been withdrawn (including through a reassignment). 

ATDS Definition is Not Meaningless: Another option may be for Congress to explicitly confirm that when it provided a narrow, specific and precise statutory definition of an ‘‘automatic telephone dialing system,’’ it did not intend to broadly sweep 

into the definition any and every software system or device that ‘‘theoretically’’ could 

be modified at some hypothetical future point in the future to ‘‘store or produce 

numbers to be called, using a random or sequential number generator, and to dial 

such numbers.’’ 

Restore the Balance: Congress should confirm that when it enacted the TCPA it 

did not intend for it to become a ‘‘litigation trap’’ where compliance-minded callers 

are put at untenable risk for engaging in beneficial, normal, expected or desired 

58 

communications, and where consumers are also suffering the consequences. Congress should consider taking steps to restore the balance that it intended when it 

enacted the TCPA. 

The CHAIRMAN. Thank you, Ms. Desai. 

Let’s start with 5-minute rounds of questions. 

I’ll start with Ms. Wahlquist. As you know, the FCC’s concluded 

that, and I quote, ‘‘Service outages and interruptions in the supply 

of water, gas, or electricity could, in many instances, pose significant risk to public health and safety, and the use of prerecorded 

message calls could speed the dissemination of information regarding service interruptions or other potentially hazardous conditions 

to the public.’’ Nonetheless, and despite receiving prior consent, a 

number of utilities have faced expensive litigation and potentially 

ruinous judgments for making just such calls. 

Do you agree that the Commission’s action on the Edison Electric 

Institutes and the American Gas Association’s petition for declaratory ruling filed with the Commission over a year ago would help 

utilities avoid meritless but oftentimes costly litigation for these 

notices? And do you think that that ruling is long overdue? 

Ms. WAHLQUIST. I would agree that it would be helpful to the 

electric companies to have that ruling. I agree that it is overdue. 

I am concerned, though, that it’s—would just be one more exception that the FCC would add into the checkbox of, ‘‘Here’s a few 

kinds of calls we think are OK.’’ And in the 2015 order, they listed 

a few. And this would just add a few more. OK? So, the electric 

companies can now say something about outage. And the problem 

is, there are all of these other calls that consumers would want, 

that they’ve signed up for, that they’ve requested, they’ve asked, 

that businesses are afraid to make, or, if they’re making, they’re 

getting sued under the TCPA. So, I think that the FCC does need 

to rule on that order. And I don’t know why it wasn’t in the earlier 

ruling. 

Clearly, people need to know if there are power outages. I believe 

one of the petitions pointed out that people may have medical 

equipment at home that relies on power, and we need to be able 

to alert them to an outage. So, it—I think that should be ruled on. 

But, I think there needs to be a much bigger look across the board 

at calls that are legitimate calls that are generating lawsuits. 

The CHAIRMAN. Ms. Desai, at a recent field hearing, CFPB Director Cordray said, and I quote, ‘‘Let me also take a moment to acknowledge another positive development, which is the decision 

some banks and credit unions have made to provide consumers 

with real time information about the funds in their accounts available to be spent. They are doing this through text and e-mail 

alerts, which can reduce the risks that consumers inadvertently 

overspend their accounts.’’ 

How can banks, credit unions, and other financial institutions increase communications with their consumers if they have the 

threat of TCPA litigation hanging over their heads? 

Ms. DESAI. Well, thank you, Chairman Thune. You raise a very 

important point. There are all types of time-sensitive consumerbeneficial communications, such as the example you raised, available funds to reduce the risk of overspending, but also high-purchase alerts, low-balance alerts. And these types of time-sensitive 

59 

communications are only possible through modern technology. 

These communications can’t be made through a rotary phone. 

And this is the heart of the challenge, not only for my financial 

institution clients, but, frankly, all of my clients who engage in 

communications with consumers and with their customers. They 

are paying a significant cost for the additional risk that any timesensitive communication they make runs the risk of being sent to 

a reassigned number, and that is a factor that they cannot fully 

control. As a result, many of my clients are choosing to decrease 

beneficial elective communications through cell phone or text because they know that every single one of these communications 

does carry that additional risk. 

The CHAIRMAN. Mr. Lovich, you stated that, ‘‘The practical impact of TCPA restrictions on the care provider community is devastating.’’ I’m wondering if you could sort of elaborate on what 

that—devoting so many resources to TCPA compliance means for 

patient care. 

Mr. LOVICH. Thank you, Chairman. I think that’s probably the 

most important question that I could be asked today, because it 

does impact upon patient care, which is obviously the most important aspect of providing healthcare. 

As any other enterprise, a hospital has to make economic decisions when they are dealing with a finite pot of resources. If resources have to be dedicated to an administrative action, such as 

dealing with the TCPA, that requires decisions to be made with regard to staffing. If that impacts, for example, the number of nurse 

to—nurses that are there to treat patients, it reduces the direct 

interaction between the nurses and the patient, the delivery of direct follow up instructions, other instructions with regard to the 

patient care. 

There have been studies done by the Department of Health and 

Human Services. The Agency for Healthcare Research and Quality 

has found that the reduction in nursing staffing has a direct relationship to negative patient outcomes with regard to the treatment 

of their conditions. 

So, the more resources that have to be dedicated to the non-use 

of up-to-date technology calls from that pool of talent that is not 

being directed to patient care. And I don’t think that’s something 

that we want to do as a Nation. 

The CHAIRMAN. My time’s expired. I’ve got some other questions, 

but I’ll hand it off to Senator Nelson. 

Senator NELSON. Mr. Chairman, I’m going to defer my questions 

until later, but I just want to introduce a thought. The law says 

that it’s illegal, robocalls on cell phones. And yet, our consumers receive millions of those robocalls on cell phones. Can you imagine 

if we made it legal, what would happen? 

I’m going to defer and let our members ask their questions first. 

The CHAIRMAN. Next up is Senator Blunt. 

Oh, well, I’m sorry, if you—that’s right. We’ll keep it even. I have 

Blumenthal, not here. Senator McCaskill would be up. 

60 

STATEMENT OF HON. CLAIRE MCCASKILL, 

U.S. SENATOR FROM MISSOURI 

Senator MCCASKILL. So, this is not that complicated. All you 

have to have is the permission of the person you’re calling, and call 

them. I mean, you guys make this sound like this is an impossible 

thing to do. I mean, Mr. Lovich, you have somebody who leaves 

your hospital, and you guys can’t manage to get their permission 

to follow up with them by phone and call them? Why is that so economically difficult for you? 

Mr. LOVICH. Thank you, Senator. The problem is, as my colleague, Ms. Wahlquist, had indicated in her testimony—is that the 

plaintiffs’ bar has taken the opportunity to twist the language with 

regard to the use of consent, and has chosen to sue most of the 

members of my association with regard to the inexactitude of the 

language involved in the consent process. Typically, consent is obtained through the conditions of admission when someone is admitted to the hospital. That’s a written document that’s signed by the 

patient. That language is then torn apart by some of my brethren—— 

Senator MCCASKILL. Why don’t you just do a simple—when 

someone checks out of a hospital, why don’t you just present them 

a simple card and said, ‘‘Do you mind if we call you on follow up?’’ 

and have them sign that? I don’t think lawyers would have much 

luck with that in front of a jury. And if you guys are settling those 

cases, shame on you. Take them to trial and kick them in the rear 

in the courtroom. That’s what you do. 

You guys need to understand this. This is the biggest consumer 

problem in the country. No bigger problem. And some of these witnesses—you all are in here whining about these poor businesses, 

and consumers really want these. They don’t want them, Ms. 

Wahlquist. They don’t want them. And when somebody has a reassigned number, you need to call them 40 times to figure out it’s a 

reassigned number? That was your testimony. What about mail? 

Can you drop them a note in the mail and figure out that they 

have a different phone number? 

Ms. WAHLQUIST. Yes, Senator. The problem is that not all the 

numbers are reassigned. There are numbers that are wrongly provided from the start. And if it was just that one number, it 

wouldn’t be the issue. The issue is that, as long as there’s one number, then a class-action is brought. You have a class-action, there 

was no statute of limitations put into the TCPA when it was drafted. So, then suddenly all phone calls made by that company for 4 

years are put at issue. And that’s what makes it not simple. 

Senator MCCASKILL. Let me ask you, Mr. Zoeller. Have the complaints gone down or up on robocalls in the last several years? 

Mr. ZOELLER. They’ve gone up every year in our office, and we’re 

on track to set all new records yet this year. 

Senator MCCASKILL. So, you would think that, if in fact these 

lawsuits were really damaging the cost of doing business in this 

country, you would see the opposite impact, wouldn’t you, Attorney 

General? 

Mr. ZOELLER. Well, you know, I think the massive amounts of 

phone calls are not from people being represented here, so the 

problem we have are the bulk calls that come from overseas, where 

61 

none of us have the ability, other than—I guess I’ll throw the FCC 

under the bus—that they’re the only ones who can really regulate 

those huge, massive calls that originate outside of our jurisdiction. 

So, without any enforcement ability, those are the ones that really 

are, let’s say, well over half of the complaints we get. 

Senator MCCASKILL. Although, I will tell you—I know you work 

with my Attorney General, Chris Coster, closely—in the last few 

months, he’s brought against an insurance company, a lawn-care 

service, a home security company, a duct-cleaning service, and a 

charity for violating the Missouri law. Now, I don’t hear tones of 

international in any of that list. So, this is a real problem. 

And, by the way, Ms. Wahlquist, I would just suggest this. I 

know that the carriers are all members of the Chamber. We know, 

from hearings we’ve had in this committee, that the technology is 

available that the carriers could adopt. And it has been clarified by 

the FCC that there is no duty to connect calls that prohibits them 

from adopting this technology. They can adopt technology and 

make it available to consumers that allows consumers to opt out 

without having to take these calls. And what we’re really trying to 

do here—we’re not trying to punish people with litigation. We’re 

trying to put power in the hands of the consumer. And this may 

not be the most artful way to do it, but I will just speak for me, 

and I think probably for a whole lot of people who run for office 

that hang out around here, if you think I’m backing up on going 

after people who make robocalls, in light of what I encounter every 

day from people I meet, including my own family—I mean, my son 

can’t get two companies to quit calling him on his cell phone. He 

finally handed the phone to me. You know, and I said, ‘‘I’m a U.S. 

Senator. I’m going to sue you.’’ Guess what? They called him 15 

minutes later. 

Ms. WAHLQUIST. Your Honor, I think that those are really the 

bad actors that need to be targeted, that have been getting targeted, and continue—would have liability under whatever modification you’re doing to the TCPA, because I’m not saying that, when 

somebody receives notice, ‘‘This is a wrong number,’’ and they receive it in a reasonable way, where they know, they should have 

a little bit of chance to implement that knowledge, and the calls 

should stop. And if they haven’t, then—— 

Senator MCCASKILL. But, they don’t. Ask Ms. Saunders. They 

don’t stop. 

Ms. WAHLQUIST. The—she has some examples of ones that didn’t. 

I have processes and procedures in place with most of my clients, 

where this is—it works for 99 percent of the time, but you have 

human error, you have something that doesn’t happen. You might 

have a vendor that hasn’t been following the company’s procedures 

and policies and didn’t record the Do Not Call. And companies 

don’t want to call the people that aren’t their clients. We’re trying 

to call our customers to convey information to those customers. 

There’s no desire to continue to call someone who’s not a customer 

with this information. 

Senator MCCASKILL. Doesn’t feel like that on the receiving end. 

It doesn’t feel like that. I’m just telling you. That’s not the perception consumers have. 

Thank you, Mr. Chairman. 

62 

The CHAIRMAN. All right. 

We’ll go to the other half of the Missouri duo here. 

Senator BLUNT. Exactly. 

The CHAIRMAN. Senator Blunt. 

STATEMENT OF HON. ROY BLUNT, 

U.S. SENATOR FROM MISSOURI 

Senator BLUNT. Well, thank you, Chairman. 

What I think Attorney General Zoeller said was that half of the 

robocalls come from out of the country. What could we do about 

that? 

Mr. ZOELLER. Senator, I—that’s a great question. And again, between, you know, addressing this with the FCC, which has the regulatory authority, and the carriers, which I’ll agree with the Senator, your colleague, that they do have some ability. They’ve pointed to one another for years. So, up until recently, I’ve always been 

critical of the FCC and their failure to regulate. The carriers have 

always said, ‘‘We’re nervous about whether we have the ability to 

use the technology.’’ Now that they’ve passed the rule, which we’ve 

long asked for, the ball is back to the carriers to say, ‘‘Why aren’t 

you using the technology that’s currently available to block some 

of these’’—and we’re not talking about any of the types of calls that 

you’re hearing about. These are the massive calls that literally call 

everybody in a—in an area code. So, when I get the complaint, I 

literally tell people, ‘‘Don’t feel too special, because they called 

9,999 other people that same minute.’’ So, it’s only the FCC and 

the carriers. Somewhere in that finger-pointing is the answer to 

your question. 

Senator BLUNT. Well, it seems to me that one of the things you 

said is exactly the crust of what we are talking about here. We’re 

talking about two different problems. We’re talking about massive 

robocalls, half of them, based on your information, from outside the 

country. Then the other thing is people legitimately trying to contact someone whose number they either no longer have or never 

had given to them in the correct way. Surely, there’s some way we 

can separate this discussion to where we deal with these problems 

in the way they ought to be dealt with. 

You know, Ms. Desai, I’ve heard that some banks, for instance, 

no longer even try to notify on what they would see as a routine 

problem that I’d like to be notified of, such as some activity in my 

account that doesn’t seem to make sense, but they don’t notify me, 

because they think they might be calling a number that they’re not 

sure of? Is that a real problem? 

Ms. DESAI. Yes. And the American Bankers Association actually 

submitted a filing on exactly that issue. I mean, it is a problem. 

And, you know, it—we—I wish it was as easy as just simply getting consent. But, once you have consent, you have to be able to 

rely on that consent. And the problem with TCPA liability, the way 

it has been interpreted, is that you cannot any longer rely on that 

consent, because there’s no way of knowing if a number has been 

reassigned. And that’s why there are increasing numbers of banks 

and other institutions that are afraid to make routine calls or send 

routine messages. 

63 

Senator BLUNT. Does anybody on the panel know? How long does 

it take to reassign a number? If I give up my cell phone number, 

is there a definite period that that can’t be available to anybody 

else? Or how long does is it take before somebody else is answering 

the number I used to have that I gave the hospital or I gave the 

bank or I gave the college—how long might it be before somebody 

else has that number? 

Ms. WAHLQUIST. Senator, it depends on the provider of the cell 

phone number. I think it can be as short as 30 days. Some providers wait 6 months before reassignment. It’s just kind of a hodgepodge. And part of the problem also is, the business doesn’t know 

who the cell phone provider is on any given number. You wouldn’t 

know the timeframe in which it’s switching out. 

Senator BLUNT. Well, say we had a rule that you couldn’t do it 

any quicker than 6 months. Anybody that got my cell phone number earlier than 6 months wouldn’t have any certainty that it was 

still my number. Is that right? Until they called it. Ms. Saunders, 

does that sound right to you? 

Ms. SAUNDERS. Yes, sir. But, I think the cell phone companies 

may not agree to wait 6 months, because some cell phone companies have a smaller batch of numbers that they’re going to want 

to recirculate. But, I—if I might—— 

Senator BLUNT. You might. 

Ms. SAUNDERS.—I think that several of us agree on this panel 

that one way of dealing with the calls to reassigned numbers is for 

there to be a mandatory database that all cell phone companies 

participate in that would allow callers to access and ask, ‘‘When 

was the last time this particular phone number was transferred?’’ 

And once that answer is provided, the caller would know whether 

or not they had valid consent. And the problem with the situation 

now is, apparently there are no full databases that are—that include all the cell phone companies. So, I think several of us on different sides of this issue have all been encouraging both the cell 

phone companies and the FCC to either voluntarily do this or mandate it. But, that would solve a lot of the litigation against the 

wrong—about the wrong-number calls. 

Senator BLUNT. It just seems to me, Mr. Chairman, that we’ve 

got two very different problems here. One, it’s really easy to be outraged about. And in the Missouri delegation, Senator McCaskill 

usually deals with the outrage better than I do. And I appreciate 

that. And I like to see that happen. 

Senator MCCASKILL. It’s called good cop, bad cop. 

Senator BLUNT. Well, maybe so. And the other one is a problem 

that we’re all very sympathetic to. If we could figure out how to 

divide this discussion into those two categories, we’re much more 

likely to find a solution to both problems than not. And I hope we 

can figure out how to do that. 

The CHAIRMAN. Thank you, Senator Blunt. And that suggestion 

is one we may want to explore and take a look at if everybody sort 

of agreed that that would make sense. I know, definitely in the 

Missouri delegation, if I have to call somebody, I’m going to call the 

good cop. 

[Laughter.] 

The CHAIRMAN. Somebody doesn’t like unsolicited phone calls. 

64 

I have up next—Senator Klobuchar and then Senator Daines. 

STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM MINNESOTA 

Senator KLOBUCHAR. OK, very good. Thank you very much. 

Thank you, Mr. Chairman, and thank you, Senator Nelson, for 

your leadership on this, as well as Senator Markey and many others. 

So, I’m a cosponsor of the HANGUP Act to repeal a provision 

from the Bipartisan Budget Act of 2015 allowing robocalls to cell 

phones for the collection of debt owed to the government. 

Ms. Saunders, in your testimony, you estimate that this provision would impact 61 million people. You also point out that, in 

many cases, debt collectors do not have accurate information about 

who owes the debt. 

Mr. Zoeller, you testified that 90 percent of the debt-collection 

complaints your office received last year were because the caller 

was harassing the wrong person. 

In both of your opinions, how significantly does the provision undermine existing robocalling protections? Because I can tell you, 

when—we just did the senior tour around Minnesota, our staff and 

in my own experiences meeting with people, robocalls are still one 

of the number one things that they list as something that they’re 

very angry about. They get sucked into things they don’t want to. 

And, well, you know all about it. 

So, Ms. Saunders? 

Ms. SAUNDERS. We think this—the provision is very dangerous. 

One of the concerns—one of the many concerns that I have heard 

is that the FTC and other government agencies, such as Attorney 

General Zoeller’s, tell people not to answer any robocalls. The FTC 

has said publicly, repeatedly, ‘‘The IRS won’t call you.’’ But, now, 

because the IRS can hire debt collectors and because the IRS debt 

collectors can robocall without consent, that advice from the FTC 

is no longer available. And yet, how do people who are receiving 

the scam calls know the difference? And so, I can go on, but I— 

the problem is—— 

Senator KLOBUCHAR. Right. 

Ms. SAUNDERS.—tremendous, and it is not a good resolution to 

allow consumers who owe money to be called more. 

Senator KLOBUCHAR. Yes. 

Attorney General Zoeller? 

Mr. ZOELLER. You know, and I’ll add to that. My earlier focus 

about—you know, in carving out the exception, we may well have 

lost the ability to defend the TCPA as a constitutional matter, because, again, in our experience, going up through the—Indiana and 

then the 7th Circuit Court of Appeals, it was because we did not 

distinguish between the types of calls being prohibited that it was 

neutral. Once you’ve started to carve this out—and I think it’s— 

it almost goes back to the point about looking at these things differently. The very different part about creating a better defense, 

we’re not against defending, and I think it would go a long way to 

eliminate some of the—let’s say, the frivolous litigation. And I’m 

not here to defend the trial bar. But, I think, to create a better deVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00068 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\24146.TXT JACKIE
65 

fense, as opposed to an exception—once you’ve got these exceptions, 

our ability to defend these statutes really is compromised. So—— 

Senator KLOBUCHAR. And you point to a rise in the phone scams 

involving government impersonation. And I know that often these 

scams involve someone spoofing to try to fool a victim into thinking 

they’re someone calling from the government. And if we don’t pass 

this HANGUP Act, or some kind of strong antispoofing legislation, 

do you think you would see more of this going on? 

Mr. ZOELLER. Well, I got a little bit numb to it until they started 

to spoof using Office of the Indiana Attorney General. 

Senator KLOBUCHAR. Well, there you go. 

Mr. ZOELLER. So, I’ll stand as outraged. 

Senator KLOBUCHAR. OK. That’s pretty bad. So, you’ve actually 

had people use your own office name? And what were they calling 

to say that they wanted to do? 

Mr. ZOELLER. Well, there were a number of issues. But, again, 

the fact that I was constantly telling people, you know, to be careful of this—the spoofing, and that you can’t really rely on it. They 

can put any number up there. OK, it’s another violation of the law. 

But, by the time they were using mine, it was because we were so 

public about, ‘‘Of course, you can trust the Office of the Attorney 

General.’’ So, what little credibility my office tries to maintain and 

trust—— 

Senator KLOBUCHAR. Yes. 

Mr. ZOELLER.—was being used against us. 

Senator KLOBUCHAR. Exactly. 

It has been 13 years now since the Do Not Call Registry was 

started. While there are more than 222 million numbers registered, 

it shows that the public is incredibly supportive of this concept. 

There are also more complaints than ever. Robocalls and text 

spamming have proliferated due to advanced technologies, which 

were discussed here earlier. Again, to both of you, we know that 

more needs to be done to protect consumers from fraudsters and 

robocalls. What, in your opinion, are the most significant limitations of the Do Not Call Program in addressing the current 

robocalling problem? 

Ms. SAUNDERS. I think we’ve mentioned it here, and it’s the 

spoofing problem. And while I very much appreciate Senator Nelson’s bill on antispoofing, we really think that the law needs to be 

much more heavy-handed and require that the cell phone—that all 

of the phone companies adopt antispoofing technology. I find it very 

hard to believe, in this day and age, with the advanced—— 

Senator KLOBUCHAR. When the technology is out there. 

Ms. SAUNDERS. The technology—— 

Senator KLOBUCHAR. So, you would pass Senator Nelson’s bill 

and then also add in this? 

Ms. SAUNDERS. Yes. Yes, ma’am. 

Senator KLOBUCHAR. All right. 

Attorney General? 

Mr. ZOELLER. Well, while we’re doing that, you know, the idea 

of having some ability to stop all the illegal ones that are being 

done from overseas, I think that’s something that, you know, technology has gotten us into this problem, and we really need to focus 

on how can it get out. So, when the FCC passed their recent reguVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00069 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\24146.TXT JACKIE
66 

lation, I know the carriers were concerned that they were going to 

require the use of the technology to block the overseas calls. When 

that wasn’t in there, I know they all had a sigh of relieve. But, 

quite frankly, we were all hoping that it would be in there. 

Senator KLOBUCHAR. Got it. And I’m not going to do anything 

more. I’m over my time. But, as you know, I’ve been doing a lot 

on the call-completion issue and dropped calls. And so, I’ll put 

something on the record on that. We’re hoping to have a markup 

soon. 

Thank you. 

The CHAIRMAN. OK, we’re going to—Senator Daines, then Senator Blumenthal. 

STATEMENT OF HON. STEVE DAINES, 

U.S. SENATOR FROM MONTANA 

Senator DAINES. Thank you, Mr. Chairman. 

I brought along a phone from 1992. The size of it is only exceeded by its weight. It would make a good boat anchor. And this is 

25 years old, and it is approximately the same time TCPA was enacted. We can see how far technology has come from this device to 

what I have in my hand, my iPhone 6, that’s reduced the need for 

a lot of phone calls because of the power of the knowledge here, 

where I can make an airline reservation, I can do my online banking, I can SnapChat Cory Booker. I can do a lot of things here on 

my iPhone 6. 

But, as we’ve heard today, now 25 years later, unwanted phone 

calls are still among the top consumer complaints. And even when 

consumers do file lawsuits for violations, it seems like the trial lawyers are the only ones that truly benefit. In fact, I’ve heard the 

TCPA has even been referred to the ‘‘Total Cash for Plaintiffs Attorneys.’’ 

Ms. Wahlquist, consumers are still receiving unwanted calls. In 

your testimony, in fact, you said the average payout to the trial 

lawyers on a case in 2014—I believe it was $2.4 million, while the 

consumer average payout was $4.12. Is the TCPA really helping 

consumers today? 

Ms. WAHLQUIST. Senator, I just really don’t think that it is. The 

abuses that are happening on the litigation side mean that it’s 

really become a lawyer-driven statute, when we have the suits for 

it. And it—the kinds of calls that are driving everyone crazy—and 

I get them, too—the spoofed calls and—that’s not what is getting— 

nobody would sue for that. There’s no money, there’s no pocket at 

the end of it. 

So, for example, I have a restaurant client that had an opt-in put 

on their menu, ‘‘If you want to get our coupons, you know, on a 

weekly basis, text us this and we’ll start sending them to you.’’ And 

this purely opt-in thing that a lot of young people joined up for and 

were doing, one text message that was sent, that one plaintiff’s 

lawyer brought a suit on, and suddenly my client is facing $32 million in statutory damages for that single text message that went 

to the club, and stopped the club. Nobody’s getting the coupons 

anymore. And this kind of thing doesn’t benefit consumers. Now 

nobody’s getting their coupons. 

67 

Senator DAINES. In a state like Montana, we have a lot of small 

businesses. They’re not trying to call their customers to sell them 

products they don’t need. They’re not inundating them with texts 

and faxes. But, they are trying to reach their customers to remind 

them of appointments or alert them to a potential service disruption. 

Ms. Desai, is it reasonable to ask small businesses to comply 

with the 2015 TCPA order? 

Ms. DESAI. I think the interpretations provided by the FCC in 

2015 were particularly damaging for small businesses. They 

shouldn’t have to check a database to see if the number that they 

were provided by their own customer has suddenly been reassigned. They probably can’t afford to do so. And if they did, it 

wouldn’t give them an accurate answer anyway. 

I think it’s expensive for a small business to have to turn to manual dialing in order to reach their customers. 

Senator DAINES. I grew up in a small business. My mom and dad 

run a little construction business. Their compliance department 

would be my mom and dad, versus a large business, where a compliance department could be an entire wing of the headquarters of 

a building. 

Ms. DESAI. Yes. 

Senator DAINES. So, what kinds of compliance costs and challenges would these small businesses face? 

Ms. DESAI. Well, you know, in order to be completely sure that 

they’re using a dialing equipment that won’t trigger TCPA liability, 

they’d have to invest in a rotary phone, if they could find one. They 

would have to try to figure out on a regular basis, whether the 

numbers that they’ve been provided consent to call are still accurate. 

I don’t have dollar figures for you. I don’t know. Even my large 

clients, who have thousands of employees, have a difficult time trying to figure out how to manage TCPA risk. I can’t imagine what 

a small company would have to do. 

Senator DAINES. Mr. Lovich, I want to bring up this issue of 

rural healthcare. Again, a lot of states who serve on this committee 

are from more rural States. And if you’ve visited Montana, hospitals are simply not around every corner. Patients really rely on 

technology to communicate with their doctors. Oftentimes, 30, 40, 

50, 60 miles away, even further, from a hospital. Can you explain 

how today’s application of the TCPA impacts patients in rural communities who do not have easy access to a clinic? 

Mr. LOVICH. Certainly. Thank you, Senator. 

I would think that the impact on a rural community would be 

even more devastating than one in a metropolitan community. The 

interaction between the physician and the patient and the 

healthcare provider is a sacred relationship. And if there isn’t an 

ability to, for example, follow up on inpatient care, to provide instructions with regard to further care, remind people about prescription pickups, remind people about appointments, it all would 

be devastating to the effectiveness of the healthcare that’s provided. 

One of the things that the healthcare community is trying to do 

is cut down on readmissions. That is a tremendous drain on the 

68 

healthcare system, is when a patient isn’t adequately treated the 

first time because of the rush to discharge them. With adequate instruction, adequate interaction between the caregiver and the patient, readmissions will reduce, and therefore the overall cost of 

healthcare will go down. 

The inability to use the most current technology to pursue that 

end is devastating to the industry and just causes more cost and 

more administrative draining of revenue that, again, impacts on 

patient care, it reduces the availability of the caregiver to the patient, and that is the essence of the relationship in—with regard 

to healthcare. 

Senator DAINES. Thank you, Mr. Lovich. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Daines. 

And I’d just want to know where the Senator from Montana 

came up with that Vanilla Ice vintage mobile phone there, because 

that’s—— 

Senator DAINES. Mr. Chairman—— 

The CHAIRMAN. Please tell me you got that in a museum and you 

aren’t collecting—— 

Senator DAINES. We did. And it’s heavy enough—I see you doing 

curls in the gym every morning with this thing. 

[Laughter.] 

The CHAIRMAN. Thank you, Senator Daines. 

Senator Blumenthal. 

STATEMENT OF HON. RICHARD BLUMENTHAL, 

U.S. SENATOR FROM CONNECTICUT 

Senator BLUMENTHAL. Thanks, Mr. Chairman. 

If there is a form of consumer complaint that is common and passionate among the people of Connecticut, it is unwanted calls, 

whether from telemarketers or local officials or politicians. And 

among those calls, the most aggravating and annoying are the 

robocalls. If we overlook the anger and aggravation caused by these 

calls, we are doing a grave disservice to the people of America, and 

they want stronger measures, like the ones that I and Senator 

Markey have proposed, that give consumers, essentially, more control over the calls they receive. That’s essentially it. Whether it’s 

through a private right of action or stronger consumer protection 

from government authorities, there’s no question in my mind that 

the present law needs to be updated and upgraded to provide better, swifter, stronger protection, because this problem is only going 

to increase. 

Mr. Zoeller, you do now what I used to do for 20 years, and a 

lot of your mandate is consumer protection. Are you finding an increase in the number of complaints, as I have received, for example, from a 76-year-old woman in Dayville, Connecticut, who says 

to me, ‘‘I’m weary of all the robocalls that I receive. Can’t the Senate address this issue?’’—which seems to be noncontroversial, to 

me. A 76-year-old research scientist. I have reams of complaints 

from people who are upset about these calls. Quote, ‘‘Every day, I 

get unwanted robocalls. Most annoying, I have reported these to 

the No Call List people, but nothing is done.’’ That’s the reason 

69 

that we have a private right of action. Public authorities are doing 

perhaps less than they should. What’s your experience? 

Mr. ZOELLER. Well, Senator, as a former Attorney General, as 

well as Senators Ayotte and Sullivan, you all kind of remember the 

days where we literally did have some protection. And, I think, 

particularly in Indiana and Missouri, which had the strongest of all 

Do Not Call laws, we literally had quiet at home. So, I think, going 

from the perspective where people knew that they could be 

stopped, they understood that something was going right, their 

government had protected them, to the point where now the vast 

majority have taken out their landlines, and when I tell them, ‘‘Believe it not, the U.S. Congress is thinking about opening up new 

exemptions to allow robocalling to cell phones,’’ they’re outraged. 

So, again, not to say that it might diminish the high standing that 

the Congress has held by the public, but you really risk the fear 

that people are going to come here with pitchforks and torches, because this is a very passionate—and I’ve got plenty of those same 

stories. So, you’re right on the money. 

Senator BLUMENTHAL. Well, I’ve heard the verbal pitchforks, and 

worse. And I think you’re absolutely right. For a Congress that has 

done so little, to now do something so bad as to dilute the consumer protection laws would be absolutely outrageous. The calls I 

get are not normally outraged, but incredulous. 

Let me ask Ms. Saunders, What do you think is preventing the 

implementation of call-blocking software by the phone companies? 

Because, again, giving consumers control, empowering consumers, 

is basically the goal of these laws. It’s not to restrict calls that consumers want. It’s to enable consumers to stop the calls that they 

find bothersome, annoying, intrusive, invasive, and worse. 

Ms. SAUNDERS. I don’t know the answer to that question, Senator. I think you’ll need to ask the phone companies why they 

won’t employ those call-blocking methodologies. I would point to 

the example of what this Congress did 40 years ago, when it passed 

the Consumer Credit Protection Act, putting the burden on banks 

for losses when credit cards—when there were credit—when there 

was credit-card fraud. And, because the banks had that burden, the 

banks have been very vigorous in developing antifraud protections, 

so there are very little losses, because the losses that are suffered 

are then suffered by the banks. If the phone companies had the 

same losses that were—resulted from robocalls, especially overseas 

telemarketing spammers, they would be very quick to employ very 

vigorous antispoofing and call—robocall-blocking technologies. 

Senator BLUMENTHAL. Thank you. 

My time has expired. I have many more questions and many 

more comments. I will put them in the record. 

I do believe that the present penalties in the TCPA are inadequate as a deterrent for the bad actors and repeated violators. 

And I hope that we can strengthen, not weaken, this important 

Federal measure. 

Thank you very much, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Blumenthal. 

Senator Markey. 

70 

STATEMENT OF HON. EDWARD MARKEY, 

U.S. SENATOR FROM MASSACHUSETTS 

Senator MARKEY. Thank you, Mr. Chairman, very much. 

I enjoy this conversation, because we’re kind of in the wayback 

machine, to a certain extent, when Senator Daines holds up a cell 

phone from 1992. Because, when I authored this law in 1991—I am 

the author of it—it was because there was an epidemic of calls that 

were going into people’s homes. There were no laws. And so, people 

were almost afraid to look at their phone at night, because it would 

just start to ring at about 6 o’clock, and it wouldn’t stop until 9:30 

or 10 o’clock at night. So, we had to put a law on the books. I was 

the Chairman of the Telecommunications Committee. It’s my law. 

And, to Senator Daines’ point about the primitive nature of the 

phone which he had in his hand, I also knew that we were putting 

in 200 megahertz of spectrum so that we could create the third, 

fourth, fifth, and sixth cell phone license in America, that we would 

go digital, and everyone would have one in their pocket by the year 

1995. So, that’s how quickly that all changed. So, we were building 

in—I was building in anticipatory consumer protections. 

Now, when people hold this phone in their pocket right now and 

it starts to ring, people say, ‘‘It’s probably somebody I know. I think 

I’ll take the call on my wireless device. I think I’ll take it.’’ Why? 

Because the protections in that law in 1991 are very high for wireless devices. It’s probably somebody you know. That’s what you 

think. But, when that phone is ringing at home at night, even 

today, that landline phone, people look at it, almost terrorized, ‘‘It 

could be somebody I don’t know. It could be somebody who’s going 

to harass me. It could be somebody that’s still calling me the same 

way they were in 1991 or 2001.’’ And that’s the truth. 

Now, should we change the laws to make it easier to call people 

on these wireless devices? I don’t think so. Because it’s personal. 

It’s on you. How much of an intrusion would that be on people, to 

have that phone going off all day long with these robocalls? And, 

by the way, what happens, of course—Senator McCaskill was right 

on the point here—these firms have moved overseas, yes. But, who 

is paying them? People in America are paying people in India to 

be harassing people so they can get around the laws. That’s what’s 

going on. We should try to figure out how to make the laws tougher 

so that these offshore overseas calls are harder to make. 

So, if I can, Ms. Saunders—and perhaps I was influenced by the 

fact that I did work for the National Consumer Law Center when 

I was in law school, so maybe I was infected by this philosophy of, 

‘‘The consumer should be protected first.’’ I was there the first year 

the Consumer Center was established, working there as a law student researcher. 

So, can you talk a little bit about this concept of consent and 

whether or not it might be possible, actually, to have the information come in by e-mails or the consumer would be able to respond 

by e-mails rather than having the phone be ringing, the wireless 

or home phone? Are there ways of dealing with this issue that are 

much less intrusive on the consumer in our country? 

Ms. Saunders? 

Ms. SAUNDERS. Yes, there are. I think the first point really needs 

to be made is that there’s not a constitutional right to make 

71 

robocalls. And before the automated systems developed, businesses 

communicated quite well with their customers through manual 

dialed calls or e-mails or, in the olden days, snail mail. And I remember getting calls from my credit card company, where they— 

I actually had a person on the line who said, ‘‘There’s a suspicious 

activity. Is this your—really your credit card use?’’ And there’s no 

reason that that can’t be used when the business is not sure about 

who actually has consented and currently owns the phone. 

Senator MARKEY. Well, let me—— 

Ms. SAUNDERS. But—— 

Senator MARKEY.—Ms. Saunders, and you, Attorney General 

Zoeller—we’re talking about, last year, a relaxation of the laws, in 

terms of being able to call people who have debts. And it’s people 

with student loans. There are 40 million of them in America. Now 

it’s easier to harass them by phone. Can you each talk about that 

and what might be better ways, you know, for people to be communicated with who have debts in our country? 

Attorney General Zoeller? 

Mr. ZOELLER. Well, again, I think, at the beginning, when people 

sign up for debt, you know, to get their opt-in as part of the, you 

know, transaction. And again, I’ll agree that we could make that 

defense, so, you know, I’m not here to defend, again, the plaintiffs’ 

bar. So, tightening up a better line of defense. But, I would point 

out that it’s the exceptions that I’m nervous about. And again, 

when we went up to the 7th Circuit, it was clear that, because we 

had no exceptions, the political free speech against personal privacy, two very important constitutional rights, and we won, based 

on the fact that it was not limiting free speech. There are plenty 

of opportunities to speak, just not by ringing the phone. So, be 

careful of the difference between that defensive side, which, again, 

we would support bolstering—don’t make exceptions because you’ve 

suddenly picked winners and losers, and the courts won’t allow 

that—limitations on free speech. 

Senator MARKEY. With your indulgence, Mr. Chairman, could I 

ask Ms. Saunders to respond to a little bit—— 

Ms. SAUNDERS. The idea that calling a debt—a consumer that 

owes a debt multiple times will assist them in paying back the debt 

is somewhat flawed. I think the record is full of examples of both 

consumers who owe the debt and consumers who don’t owe the 

debt being called numerous times, robocalled, which is harassing 

and abusive. It’s also not particularly helpful and against the—and 

not—not in furtherance of good public policy to bother people into 

paying a debt. 

Senator MARKEY. And again, in last year’s Budget Act, there was 

a provision snuck in—snuck in—to a must-pass piece of legislation 

that makes it much easier for debt collectors to call consumers— 

students—40 million students who owe student loans, and makes 

it a lot easier for them to do that. And I’ve introduced the HANGUP Act that would just stop that. It’s absolutely irresponsible. 

And I ask unanimous consent, Mr. Chairman, to add two letters 

to the record, one from 25 attorneys general, led by Attorney General Zoeller, who is testifying here today, and one from 16 consumer groups who have all written in support of the HANGUP Act, 

so that—— 

72 

The CHAIRMAN. Without objection, it will be entered into the 

record. 

Senator MARKEY. And I appreciate that, Mr. Chairman. 

[The information referred to follows:] 


518FEB1.eps
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518FEB3.eps
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518NOV1.eps
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The CHAIRMAN. Thank you. 

Senator MARKEY. We thank all of you for being here today. 

The CHAIRMAN. Thank you, Senator Markey. 

Senator Nelson, anything for the—OK. 

Let me just ask one last question. And again, this kind of gets 

at the point of other regulatory bodies. And, Ms. Desai, you, I 

think, indicated that some don’t have the same view as the FCC 

when it comes to communicating with consumers via cell phone. 

Have other regulators seen consumer benefits in communicating 

with consumers via mobile phone or text message? 

Ms. DESAI. Oh, sure. Yes, thank you for the question. 

The Consumer Financial Protection Board has an early intervention rule that encourages out-bound communications. The Home 

Affordable Modification Program, the Federal Deposit Insurance 

Corporation, the Federal Trade Commission, the Consumer Product 

Safety Commission have all discussed the benefits of out-bound 

communications, both by call and by text. There are also State laws 

that require out-bound communications, because they see the value 

in that. For example, with utilities. 

The CHAIRMAN. Well, I just want to make, kind of, one final 

point, and that is, nobody is proposing that consumers shouldn’t 

have the right to stop unwanted calls at any point. Even with the 

Obama robocall carve-out that was mentioned a couple of times 

today that passed last fall, the FCC’s proposed rules would allow 

consumers to demand that a caller stop calling immediately, even 

in that particular circumstance. 

And I also want to be very clear, there is, I believe, and I think 

you heard it here today, strong bipartisan interest in ensuring that 

consumers are protected from harassing robocalls. The problem we 

have is that the TCPA is no longer working as well as it should. 

As we’ve heard, all of us are plagued by unwanted calls, even on 

our cell phones, which is, I think, the point that Ms. Saunders is 

getting at. At the same time, you have legitimate companies that 

are facing needless lawsuits, and consumers are being denied information that they need. And I think what this cries out for is a balanced solution. 

And your input today and testimony, I think, has been very helpful in elevating these issues and getting a discussion. Frankly, for 

that matter, I thought hearing some—perhaps some common 

ground when it comes to, you know, the bad, the harassing, the bad 

actors and the good actors, and perhaps we’ll be able to find a way 

to come up with some solutions that reflect that common ground. 

So, I want to thank you all very much for being here. 

Senator MARKEY. Could—Mr. Chairman, is—— 

The CHAIRMAN. Yes. 

Senator MARKEY.—is it possible I can ask one more question? 

Then that would be it. 

The CHAIRMAN. I kind of expected that would happen, so, Senator Markey, one more question. 

Senator MARKEY. And I appreciate that. And I know it’s an unwanted intrusion. 

The CHAIRMAN. It’s never unwanted. 

Senator MARKEY. But, I thank you. 

78 

Last year’s surface transportation bill, the FAST Act, included a 

provision requiring the IRS to hire private debt collectors to collect 

certain unpaid taxes, Attorney General. That means that the IRS 

is going to be hiring many people to go after those who may be unable to pay their taxes. This provision, coupled with the TCPA 

carve-out in the budget deal, will open the floodgates to private 

debt collectors robocalling and robotexting millions of Americans. 

The enactment of the two provisions coincide with the rise of tax 

and debt-collection scams as a serious problem, costing Americans 

millions and millions of dollars. Last year, bogus tax scams and 

fake debt collectors topped the Better Business Bureau’s list of top 

scams of 2015, with over 32 percent of all scam reports about 

phony tax and debt collectors. 

So, Attorney General, will these two changes in the budget and 

transportation laws on robocalls and robotext provisions make it 

harder for consumers to protect themselves from fraudulent tax 

and debt collectors? 

Mr. ZOELLER. Well, there’s no question of looking at those two, 

coupled together, that there was this kind of interest. And again, 

like the Chairman said, it was put into the must-pass budget. So, 

I think this idea of making the carve-out exception really puts consumers at risks, because we’ve told people, you know, ‘‘The IRS will 

not call you.’’ And that’s—‘‘Don’t worry, if that you do get the call.’’ 

So, this is not going to be a very effective tool to try to go after 

people, other than the harassment that—if that’s supposed to get 

things done. 

And I guess I would leave it that, again, this carve-out with the 

exception is going to make the constitutional question about whether the Federal Government has now made winners and losers in 

an area which is really covered with free speech. So, you may have 

really killed the whole TCPA by that carve-out. 

Senator MARKEY. Yes. So, they become electronic kind of Luca 

Brasis, you know, as debt collectors, which is bothering you all 

night long. 

Ms. Saunders, do you agree with the Attorney General? 

Ms. SAUNDERS. Yes, I do. 

Senator MARKEY. OK, thank you. 

I appreciate it, Mr. Chairman, very much. I think we should—— 

The CHAIRMAN. Thank you, Senator Markey. 

Senator MARKEY.—tread carefully into this. 

The CHAIRMAN. We do very much thank you for being here, taking the time, and for responding to our questions. And we will keep 

the hearing record open for 2 weeks, during which time Senators 

are asked to submit any questions for the record. And, upon receipt, we would ask all of you if you could submit your written answers to the Committee as soon as possible. 

So, thank you all for being here. 

This hearing is adjourned. 

[Whereupon, at 11:45 a.m., the hearing was adjourned.] 

(79) 

1Stephen J. Blumberg & Julian V. Luke, Wireless Substitution: Early Release of Estimates 

From the National Health Interview Survey, January–June 2015, National Center for Health 

Statistics (Dec. 1, 2015). http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless201512.pdf 

A P P E N D I X 

May 17, 2016 

Hon. JOHN THUNE, 

Chairman, 

Senate Committee on Commerce, 

Science, and Transportation, 

Washington, DC. 

Hon. BILL NELSON, 

Ranking Member, 

Senate Committee on Commerce, 

Science, and Transportation, 

Washington, DC. 

To the Members of the U.S. Senate Committee on Commerce, Science, and Transportation: 

We, the undersigned student loan organizations, commend the Committee for 

holding this hearing, ‘‘The Telephone Consumer Protection Act at 25: Effects on 

Consumers and Business,’’ to examine class action litigation abuses under the Telephone Consumer Protection Act (TCPA). The TCPA, which was enacted over 25 

years ago, was well-intentioned legislation aimed at protecting the privacy of American consumers against abusive telemarketing calls. The law has not kept up with 

technology and was implemented at a time when cell phones were a luxury and fees 

were commonly assessed for individual calls. This is no longer the case. According 

to a recent study from the Centers for Disease Control and Prevention,1 nearly onehalf of American homes (47.4 percent) had only wireless telephones during the first 

half of 2015—an increase of 3.4 percent over the last year. This number is even 

higher for those age brackets more likely to have student loans—more than twothirds of adults aged 25–29 (71.3 percent) and aged 30–34 (67.8 percent) live in 

households with only wireless telephones. 

In recent years, the TCPA’s original purpose has been corrupted by widespread 

and abusive class action litigation where the plaintiffs’ lawyers are the only big winners. Lawsuits have increased by over 940 percent between 2010 and 2015, often 

against legitimate businesses such as student loan servicers that are attempting to 

contact borrowers to provide important information, not to make telemarketing 

calls. As a result of this wide-spread litigation, some companies that have prior consent are considering not using automated call technology to contact borrower cell 

phones. If this occurs, even more struggling borrowers will not receive helpful information such as deadline reminders and repayment guidance that could prevent unnecessary student loan delinquency or defaults. 

We also commend the Congress for including a provision in the Bipartisan Budget 

Act of 2015 (BBA) that would exempt from the TCPA calls made using automated 

call technology to cell phones ‘‘to collect debt owed to or guaranteed by the United 

States.’’ This important provision will help student loan borrowers nationwide by 

enabling Federal student loan servicers and collectors to effectively contact and communicate with those who are struggling, to help borrowers navigate the often-confusing array of student loan repayment options, and to provide tailored solutions to 

prevent unnecessary delinquencies and defaults. Our members are not just calling 

borrowers to say ‘‘pay up;’’ they can offer real relief to struggling borrowers. The 

BBA provision is an important step in helping us communicate more effectively, and 

is an important beginning to TCPA reform. 

We were very disappointed that the Notice of Proposed Rulemaking (NPRM) 

issued by the Federal Communications Commission (FCC) does not fully recognize 

the importance of allowing student loan servicers the ability to call and text student 

loan borrowers in order to help them avoid the negative and costly consequences of 

delinquency and default. The NPRM proposes to arbitrarily limit the exemption to 

three (3) contact attempts per month, regardless of whether we reach the borrower 

or not. It would also subject these calls to the FCC’s recent rule on reassigned numVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00083 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
80 

bers, permitting only one call to a reassigned number before exposure to TCPA liability occurs. It commonly takes a number of call attempts simply to establish live 

contact with a borrower, and multiple live contacts to help the borrower enroll in 

an appropriate repayment plan, resolve a delinquency or, in the case of defaulted 

borrowers, to establish a rehabilitation program to cure their default and repair 

their credit. 

Under the provisions of the proposed rule, servicers and collectors will, in most 

instances, be unable to make live contact with a borrower before it is too late to 

help keep them out of delinquency or default, or to help those in default to rehabilitate their loans. As the rulemaking progresses, we look forward to providing the 

FCC with our specific recommendations to improve the proposed rule so that it focuses on most effectively helping student and parent borrowers. As stated, we believe a special case can and should be made to help Federal student loan borrowers. 

Today’s hearing serves as an important first step in telling the troubling litigation 

story under the TCPA, and in laying the groundwork for continued meaningful reform of the statute which was initiated by the BBA. We remain committed to working with this Committee to advance important reforms that will modernize the 

TCPA and allow us to better serve our student loan borrowers. 

Sincerely, 

DEBRA J. CHROMY, ED.D., 

President, 

Education Finance Council (EFC). 

JAMES P. BERGERON, 

President, 

National Council of Higher Education Resources (NCHER). 

WINFIELD P. CRIGLER, 

Executive Director, 

Student Loan Servicing Alliance (SLSA). 

May 17, 2016 

Hon. JOHN THUNE, 

Chairman, 

Committee on Commerce, Science, and 

Transportation, 

United States Senate, 

Washington, DC. 

Hon. BILL NELSON, 

Ranking Member, 

Committee on Commerce, Science, and 

Transportation, 

United States Senate, 

Washington, DC. 

Dear Chairman Thune and Ranking Member Nelson: 

We, the undersigned organizations, commend the Committee for holding today’s 

hearing to examine class action litigation abuses under the Telephone Consumer 

Protection Act (TCPA). The TCPA, which was enacted over 25 years ago, was wellintentioned legislation aimed at protecting the privacy of everyday Americans 

against abusive telemarketing calls. 

But the TCPA has become an engine for abusive class action litigation that has 

become widespread. The numbers are staggering. Last year alone, 3,710 TCPA lawsuits were filed in Federal court, and between 2010 and 2015, case filings increased 

by over 940 percent. 

Given that the TCPA has not been meaningfully amended by Congress since 1991, 

countless well-intentioned businesses and organizations (small and large) who legitimately try to communicate with employees, members or customers find themselves 

defending abusive class action litigation. The alleged liabilities appear in many 

forms and are usually based on expansive legal theories that Congress never intended when it first enacted the TCPA. 

Today’s hearing serves as an important first step to tell the troubling litigation 

story under the TCPA. We remain committed to working with this Committee to 

advance important reforms that will bring a 20th Century solution in line with 21st 

Century challenges. 

Sincerely, 

ACA International 

American Association of Healthcare Administrative Management (AAHAM) 

American Financial Services Association (AFSA) 

American Insurance Association (AIA) 

Coalition of Higher Education Assistance Organizations (COHEAO) 

81 

Consumer Bankers Association (CBA) 

Electronic Transactions Association (ETA) 

Financial Services Roundtable (FSR) 

Florida Chamber of Commerce 

Florida Justice Reform Institute (FJRI) 

Indiana Chamber of Commerce 

Las Vegas Metro Chamber of Commerce 

Missouri Chamber of Commerce and Industry 

Montana Chamber of Commerce 

National Association of Chain Drug Stores (NACDS) 

National Association of Mutual Insurance Companies (NAMIC) 

National Restaurant Association (NRA) 

National Retail Federation (NRF) 

Newspaper Association of America (NAA) 

Oregon Liability Reform Coalition (ORLRC) 

Professional Association for Consumer Engagement (PACE) 

Retail Industry Leaders Association (RILA) 

Satellite Broadcasting and Communications Association (SBCA) 

SLSA Private Loan Committee 

South Carolina Civil Justice Coalition (SCCJC) 

State Chamber of Oklahoma 

Student Loan Servicing Alliance (SLSA) 

Texas Civil Justice League (TCJL) 

U.S. Chamber of Commerce (USCC) 

U.S. Chamber Institute for Legal Reform (ILR) 

Washington Liability Reform Coalition 

Wisconsin Manufacturers & Commerce (WMC) 

West Virginia Chamber of Commerce 

cc: Members of the Committee on Commerce, Science, and Transportation 

PREPARED STATEMENT OF AMERICA’S HEALTH INSURANCE PLANS (AHIP) 

America’s Health Insurance Plans (AHIP) is the national trade association representing the health insurance community. AHIP’s members provide health and 

supplemental benefits through employer-sponsored coverage, the individual insurance market, and public programs such as Medicare and Medicaid. AHIP advocates 

for public policies that expand access to affordable health care coverage to all Americans through a competitive marketplace that fosters choice, quality, and innovation. 

We appreciate this opportunity to comment on the Telephone Consumer Protection Act of 1991 (TCPA) and how it affects the ability of health plans to communicate with and provide vital information to their customers. We want to highlight 

the following three points: 

• Telephonic communications play an essential role in supporting the innovative 

strategies through which health plans are working to improve health outcomes 

for their enrollees. 

• It is important to modernize the TCPA to account for changes in the health care 

and telecommunications markets over the past 25 years. Specifically, the law 

needs to be implemented in a way that allows health plans to focus on affirmative outreach and include essential communications relating to appointment and 

exam confirmations and reminders, wellness checkups, hospital pre-registration 

instructions, pre-operative instructions, lab results, post-discharge follow-up intended to prevent readmission, prescription notifications, and home health care 

instructions. 

• We are concerned about the Federal Communications Commission’s (FCC) 2015 

TCPA Order that would prohibit HIPAA-defined covered entities (e.g., health 

plans and health care clearinghouses) from fulfilling their statutory, regulatory 

and/or commercial contract obligations to place time-sensitive health care calls 

to members to support and enhance critical health care services and to ensure 

that members have the information necessary to make well-informed decisions 

regarding their health care. 

Telephonic Communications Are a Valuable Tool in Improving Patient 

Care 

Health plans have a long history of developing innovative tools and strategies to 

ensure that enrollees receive health care services on a timely basis, while also emphasizing prevention and providing access to disease management services for their 

82 

1 ‘‘Using Health Text Messages to Improve Consumer Health Knowledge, Behaviors, and Outcomes: An Environmental Scan,’’ prepared for the U.S. Department of Health and Human Services by the Mathematica Policy Research and Public Health Institute, May 2014. 

chronic conditions. Using systems of coordinated care, health plans work to ensure 

that physician services, hospital care, prescription drugs, and other health care services are integrated and delivered with a strong focus on preventing illness, improving health status, and employing best practices to swiftly treat medical conditions 

as they occur—rather than waiting until they have advanced to a more serious level. 

Communicating with health plan enrollees is essential to the success of the strategies health plans have developed to improve health care quality and health outcomes. This includes, for example, telephonic communications that remind enrollees 

to schedule appointments with their doctor and refill prescription drugs. In other 

cases, these messages provide information that can promote compliance with treatment regimens, encourage healthy activities, and improve the management of 

chronic conditions. These telephone messages are permitted, under certain circumstances, by an exemption from the TCPA’s restrictions on unsolicited phone 

calls. 

A May 2014 report 1, commissioned by the Department of Health and Human 

Services (HHS), identifies five categories of mobile health programs that use text 

messaging to communicate with consumers, health care professionals, and others: 

• Health Promotion and Disease Prevention—delivering health information and 

prevention messaging to promote healthy behaviors or referrals to services; 

• Treatment Compliance—providing patient reminders to take drugs or attend 

medical appointments to improve management of asthma, diabetes, or other 

conditions; 

• Health Information Systems and Point-of-Care Support—offering clinical support for health professionals and community health workers through telemedicine; 

• Data Collection and Disease Surveillance—obtaining real-time data on disease 

outbreaks from community health workers, patient self-reports, or clinic and 

hospital records; and 

• Emergency Medical Response—maintaining alert systems that disseminate information in an emergency or during disaster management and recovery. 

Health plans have demonstrated strong leadership in this area. For example, 

some health plans send phone calls of one minute or less, or text messages consisting of 160 characters or less, to remind members of upcoming appointments, 

home visits, or other notifications aimed at improving their health. These communications include: 

• Case management communications to members with helpful instructions on 

processes such as post-discharge follow-up and medication adherence; 

• Preventative care communications for screenings, vaccinations, and available 

services; and 

• Health plan benefits communications regarding provider/benefit changes, plan 

enrollment reminders, and even weather emergencies affecting an upcoming appointment. 

Implementation of the TCPA Needs to Keep Pace With Changes in the 

Health Care and Telecommunications Markets 

The TCPA was approved by Congress and signed into law in 1991. Over the past 

25 years, the TCPA has played a useful role in shielding consumers from many unsolicited phone calls, including those using automated and pre-recorded messages. 

As we noted above, an exemption from the law’s restrictions is provided for certain 

types of telephone messages that health plans use to promote the health and wellbeing of their enrollees. At the same time, health care communications conducted 

by telephone are subject to the privacy, security, and marketing protections of 

HIPAA. Patients should feel confident that when they receive telephonic communications from their health plans, their personal health information will receive the 

same level of protection that is assured in other circumstances. 

Unfortunately, the current TCPA exemption draws an arbitrary and antiquated 

distinction between the use of land line telephone numbers and cell phone numbers. 

Due to the complexity of the exemption—and its use of outdated definitions—health 

plans are reluctant to contact enrollees by cell phone, except in limited cases where 

they have proof that the enrollee has granted prior express consent for such communications. As a result, the TCPA health care exemption is essentially meaningless 

83 

1 ABA is the voice of the Nation’s $16 trillion banking industry, which is composed of small, regional, and large banks that together employ more than 2 million people, safeguard $12 trillion in deposits, and extend more than $8 trillion in loans. 2Founded in 1919, the Consumer Bankers Association (CBA) is the trade association for today’s leaders in retail banking—banking services geared toward consumers and small businesses. The nation’s largest financial institutions, as well as many regional banks, are CBA corporate members, collectively holding well over half of the industry’s total assets. CBA’s mission 

is to preserve and promote the retail banking industry as it strives to fulfill the financial needs 

of the American consumer and small business. 3 CUNA represents America’s credit unions and their more than 100 million members. 

4The Financial Services Roundtable represents the largest integrated financial services companies providing banking, insurance, payment and investment products and services to the 

American consumer. FSR member companies provide fuel for America’s economic engine, accounting for $92.7 trillion in managed assets, $1.2 trillion in revenue, and 2.3 million jobs. 5The Independent Community Bankers of America®, the Nation’s voice for more than 6,000 

community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership. 

for health plans that, as part of their quality improvement efforts, would like to 

send telephone messages to a cell phone. At a time when cell phones are replacing 

land lines in many households, these restrictions on the ability of health plans to 

contact enrollees on a cell phone have impeded the delivery of important medical 

care messages to certain at-risk populations and in some cases have barred health 

plans from completing quality-focused outreach that is required under state law. 

This policy is highly problematic, particularly in light of research findings that 

clearly demonstrate that telephonic communications on health care services are successful in improving quality and leading to better health outcomes. According to the 

HHS report mentioned above, a ‘‘substantial body of research’’ has shown that text 

messaging programs can: 

• Bring about changes in behavior that are helpful in improving short-term smoking cessation outcomes and improving short-term diabetes management and 

clinical outcomes; 

• Improve patients’ compliance with recommended treatments, including adhering 

to prescribed medications and showing up for doctor appointments; and 

• Improve immunization rates, increase knowledge about sexual health, and reduce risky behaviors related to HIV transmission (although the literature is less 

definitive in these areas). 

Further, the restrictive interpretation of the TCPA regarding health-related calls 

puts the TCPA at odds with the requirements of certain government programs, particularly Medicaid, in which state agencies either mandate or strongly encourage 

that health plans reach out to members to provide new member welcome calls and 

reminders to reestablish Medicaid eligibility. These state agencies also encourage 

plans (often through financial incentives) to take proactive efforts to improve quality 

through outreach to members, including many of the types of calls and texts noted 

above. 

Recognizing the advances that have occurred over the past 25 years in both the 

health care system (i.e., the use of text messaging through mobile health programs) 

and in the telecommunications market (i.e., the expanded use of cell phones), we believe it is time for Congress and the FCC to revisit the TCPA and reevaluate whether the current implementation approach is serving the best interests of consumers. 

We urge the Senate Commerce, Science, and Transportation Committee and the 

FCC to reconsider the parameters of the TCPA’s current health care exemption. By 

updating this policy to reflect the realities of the modern era—through a solution 

that creates parity between land lines and cell phones—policymakers can remove 

barriers to the delivery of important communications that have the potential to significantly improve health outcomes for consumers. 

PREPARED STATEMENT ON BEHALF OF THE AMERICAN BANKERS ASSOCIATION, 

CONSUMER BANKERS ASSOCIATION, CREDIT UNION NATIONAL ASSOCIATION, 

FINANCIAL SERVICES ROUNDTABLE, INDEPENDENT COMMUNITY BANKERS OF

AMERICA, AND NATIONAL ASSOCIATION OF FEDERAL CREDIT UNIONS

Chairman Thune, Senator Nelson, and members of the Committee, the American 

Bankers Association (ABA),1 Consumer Bankers Association (CBA),2 Credit Union 

National Association (CUNA),3 Financial Services Roundtable,4 Independent Consumer Bankers of America (ICBA),5 and National Association of Federal Credit 

84 

6The National Association of Federal Credit Unions is the only national trade association focusing exclusively on federal issues affecting the Nation’s federally insured credit unions. 

NAFCU membership is direct and provides credit unions with the best in Federal advocacy, education and compliance assistance. 7STEPHEN J. BLUMBERG & JULIAN V. LUKE, U.S. DEPT. OF HEALTH AND HUMAN SERVICES, 

CTR. FOR DISEASE CONTROL & PREVENTION, NAT’L CTR. FOR HEALTH STATISTICS, WIRELESS SUBSTITUTION: EARLY RELEASE OF ESTIMATES FROM THE NATIONAL HEALTH INTERVIEW SURVEY, JANUnions6 (collectively, the Associations) appreciate the opportunity to submit a statement for the record for this hearing on the effects of the Telephone Consumer Protection Act (TCPA). As you are aware, that statute prohibits, with limited exceptions, telephone calls to residential lines and calls and text messages to mobile 

phones using an automatic telephone dialing system (autodialer) unless the caller 

has the prior express consent of the called party. 

The Associations commend the Committee for holding this hearing. Reform of the 

TCPA is urgently needed. Enacted 25 years ago to limit aggressive telemarketing 

and secondarily, to protect the nascent wireless phone industry, the TCPA was designed to provide consumers with a right to pursue an individual claim against an 

unlawful caller in small claims court and without the need for an attorney. Since 

then, the TCPA has been interpreted by the Federal Communications Commission 

(Commission or FCC) to apply, potentially, to any dialing technology more advanced 

than a rotary phone and to impose liability for calls to numbers for which consent 

has been obtained but the number has been reassigned unbeknownst to the caller. 

With statutory damages of up to $1,500 per call, any call that is purported to have 

been made using an autodialer and that is inadvertently made to a wireless number 

without documented consent can result in a class action lawsuit with a damage 

claim in the millions, if not billions, of dollars. While the total dollar value of these 

class action lawsuits can be staggering, and frequently generate millions in fees for 

the attorneys that pursue the cases, these lawsuits rarely accomplish a substantial 

recovery for consumers. As the attached chart of recent TCPA settlements from one 

financial institution demonstrates, the median amount awarded to consumers would 

have been $7.70 if all class members submitted a claim. 

This risk of draconian liability has led financial institutions to limit—and, in certain instances, to eliminate—many pro-consumer, non-telemarketing communications, including calls to combat fraud and identity theft, provide notice of data security breaches, and help consumers manage their accounts and avoid late fees and 

delinquent accounts. The balance Congress struck between protecting consumers 

and allowing routine and important communications between a business and its customers to occur has been lost—and, all too often, the very consumers Congress 

sought to protect are harmed. 

In our statement, we make three points: 

• The TCPA, as interpreted by the Commission, has a detrimental impact on consumers by effectively preventing financial institutions from sending important, 

and often time-sensitive, messages to consumers. 

• The TCPA is out of touch with current technology and consumer communication 

preferences and expectations and prevents financial institutions from effectively 

serving consumers who wish to communicate by cell phone. 

• Congress should reform the TCPA by imposing a damages cap and mandating 

the establishment of a database of reassigned numbers. 

I. The TCPA Has a Detrimental Impact on Consumers by Effectively 

Preventing Financial Institutions from Sending Important, and Often 

Time-sensitive, Messages to Consumers 

Financial institutions seek to send automated messages to prevent fraud and 

identity theft, provide notice of security breaches, provide low balance and over-limit 

alerts, and help consumers avoid delinquency, among other beneficial purposes. 

Autodialers enable financial institutions to provide these important communications 

to large numbers of consumers quickly, efficiently, and economically. The Commission’s recent interpretation of the TCPA, coupled with the threat of class action liability, discourages financial institutions from making these calls that benefit consumers. 

A. The Significance of Facilitating Important Communications to Cell Phone Users, 

Particularly Low Income Users 

Consumers today value, and increasingly expect, the convenience of wireless 

connectivity and the convenience of being able to use mobile financial services. 

Nearly 50 percent of U.S. households are now ‘‘wireless-only,’’ with that percentage 

rising to over 70 percent for adults between 25 and 29.7

85 

UARY–JUNE 2015 (2015), available at http://www.cdc.gov/nchs/data/nhis/earlyrelease/ 

wireless201512.pdf (Tables 1 & 2). 8FED. DEPOSIT INS. CORP., QUALITATIVE RESEARCH ON MOBILE FINANCIAL SERVICES FOR UNDERSERVED CONSUMERS (Oct. 30, 2015), at 21, available at https://www.fdic.gov/about/comein/ 

2015/come-in-2015.pdf. 9FED. DEPOSIT INS. CORP., FIL–32–2016, REQUEST FOR COMMENTS ON MOBILE FINANCIAL

SERVICES STRATEGIES AND PARTICIPATION IN ECONOMIC INCLUSION DEMONSTRATIONS 3 (2016), 

available at https://www.fdic.gov/news/news/financial/2016/fil16032.pdf. 10 BUREAU OF CONSUMER FIN. PROT., MOBILE FINANCIAL SERVICES: A SUMMARY OF COMMENTS

FROM THE PUBLIC ON OPPORTUNITIES, CHALLENGES, AND RISKS FOR THE UNDERSERVED, at 10 

(Nov. 2015), available at http://files.consumerfinance.gov/f/201511lcfpblmobile-financialservices.pdf (emphasis added). 11 In 2015, 781 data breaches were reported, a 27 percent increase from 2013. Press Release, 

Identity Theft Resource Center, Identity Theft Resource Center Breach Report Hits Near Record 

High in 2015 (Jan. 25, 2016), available at http://www.idtheftcenter.org/index.php/ITRC-Surveys-Studies/2015databreaches.html. In 2014, 12.7 million people were victims of identity fraud. 

AL PASCUAL & SARAH MILLER, JAVELIN STRATEGY & RESEARCH, 2015 IDENTITY FRAUD: PROTECTING VULNERABLE POPULATIONS (Mar. 2015), https://www.javelinstrategy.com/coveragearea/2015-identity-fraud-protecting-vulnerable-populations. 12Gramm-Leach-Bliley Financial Services Modernization Act of 1999, Pub. L. 106–102, 113 

Stat. 1338, § 501(b); see, e.g., Cal. Civ. Code § 1798.29; Fla. Stat. § 817.5681; 815 ILCS § 530/ 

10(a); NY CLS Gen. Bus. § 899–aa; N.C. Gen. Stat. § 75–65; Rev. Code Wash. § 19.255.010. 

This new reality has profound implications for how financial institutions communicate with consumers, especially those of low and moderate incomes for whom a 

cell phone may be their only point of contact. Often, low income consumers strictly 

rely on their cell phone for Internet and other communications because purchasing 

multiple devices, such as landlines and laptops, can be prohibitively expensive. Research conducted by the Federal Deposit Insurance Corporation (FDIC) found that 

underbanked consumers prefer text messages to e-mails when receiving alerts from 

financial institutions because texts are faster, easier to receive, attention grabbing, 

and quicker and easier to digest.8 Building on this research, the FDIC is exploring 

the potential for mobile banking to promote and support underserved consumers’ 

banking relationships in part by increasing the communications and alerts sent to 

those underserved consumers that use mobile services.9 The Bureau of Consumer 

Financial Protection (Bureau) also concluded that alerts to cell phones help consumers, including low income consumers, access financial services and manage personal finances: 

By enabling consumers to track spending and manage personal finances on 

their devices through mobile applications or text messages, mobile technology 

may help consumers achieve their financial goals. For economically vulnerable 

consumers, mobile financial services accompanied by appropriate consumer protections can enhance access to safer, more affordable products and services in 

ways that can improve their economic lives.10

Financial institutions want to serve their customers and members—and promote 

financial inclusion—by connecting with consumers who may use only cell phones for 

communications. The TCPA should not interfere with the efforts of these institutions to provide financial services to consumers of all economic levels. 

B. The Threat of TCPA Litigation Unnecessarily Limits Several Types of ProConsumer Calls 

The threat of class action liability threatens to curtail the following categories of 

pro-consumer, non-telemarketing communications made by financial institutions: 

(1) Breach Notification and Fraud Alerts 

With identity theft and fraud losses at all-time highs,11 financial institutions are 

relentlessly pursuing fraud detection and prevention capabilities. A key component 

is autodialed calling to consumers’ wireline and mobile telephones, including text 

messaging to customers’ mobile devices, to alert customers to out-of-pattern account 

activity and threatened security breaches. In addition, financial institutions are required to establish response and consumer notification programs following any unauthorized access to consumers’ personal information, under Section 501(b) of the 

Gramm-Leach-Bliley Act, as well as under the breach notification laws of 46 states 

and the District of Columbia.12 The volume of these required notifications, which 

average 300,000 to 400,000 messages per month for one large financial institution 

alone, cannot be accomplished at all, much less with acceptable speed, unless the 

86 

13The greater efficiency of automated calling is suggested by a report issued by Quantria 

Strategies, LLC, which states that automated dialing permits an average of 21,387 calls per employee per month, as opposed to an average of 5,604 calls per employee per month when manual 

dialing is used. The gain in efficiency when automated methods are used is 281.6 percent. See 

J. Xanthopoulos, Modifying the TCPA to Improve Services to Student Loan Borrowers and Enhance Performance of Federal Loan Portfolios 9 (July 2013), available at http://apps.Com 

mission.gov/ecfs/document/view?id=7521337606. 14Fair Credit Reporting Act § 605A (codified at 15 U.S.C. § 1681c–1). 15FED. DEPOSIT INS. CORP., FIL–32–2016, REQUEST FOR COMMENTS ON MOBILE FINANCIAL

SERVICES STRATEGIES AND PARTICIPATION IN ECONOMIC INCLUSION DEMONSTRATIONS 3 (2016), 

available at https://www.fdic.gov/news/news/financial/2016/fil16032.pdf. 

process is automated.13 In addition, identity theft victims have the right, under the 

Fair Credit Reporting Act (FCRA), to have fraud alerts placed on their credit reporting agency files, which notify all prospective users of a consumer report that the 

consumer does not authorize the establishment of any new credit plan or extension 

of credit without verification of the consumer’s identity. Further, the FCRA expressly directs financial institutions to call consumers to conduct this verification.14

Although the Commission granted an exemption from the TCPA’s consent requirements for these data breach and suspicious activity alert calls, the Commission 

inexplicably required that exempted calls be made only to a number that was provided by the customer. As a result of this requirement, many consumers will not 

be contacted with time-sensitive messages intended to prevent fraud and identity 

theft simply because there is no documentation that the consumer, not a spouse or 

other joint account holder, provided the number to the financial institution. What 

we have learned from the marketplace is that the ‘‘provided number’’ condition is 

unnecessarily limiting the ability of financial institutions to send exempted messages: 

• One bank is unable to send approximately 3,000 exempted messages each day 

due to the provided number condition. 

• A second large bank is not able to send exempted messages to approximately 

6 million customers because of the condition. 

• A third bank is not able to send an exempted message to 62 percent of its customers because of the condition. 

Small financial institutions, including credit unions and community banks, have 

also expressed concerns, or found that they do not have the resources to comply with 

a number of conditions that must be met to qualify for this exemption. The experience of these financial institutions shows that the provided number condition, rather than serving the interests of consumers, has effectively prevented consumers 

from enjoying the benefits the exemption was intended to provide. 

(2) Consumer Protection and Fee Avoidance Calls 

Financial institutions use autodialed telephone communications to protect consumers’ credit and help them avoid fees. Institutions seek to alert consumers about 

low account balances, overdrafts, over-limit transactions, or past due accounts in 

time for those customers to take action and avoid late fees, accrual of additional interest, or negative reports to credit bureaus. Indeed, the FDIC listed ‘‘low-balance 

alerts’’ as one of the ‘‘most promising strategies’’ for financial institutions to help 

consumers avoid overdraft or insufficient funds (NSF) fees.15 Autodialed calls that 

deliver prerecorded messages are the quickest and most effective way for these courtesy calls to be made. Failure to communicate promptly with consumers who have 

missed payments or are in financial hardship can have severe, long-term adverse 

consequences. These consumers are more likely to face repossession, foreclosure, adverse credit reports, and referrals of their accounts to collection agencies. Prompt 

communication is a vital step to avoid these harmful consumer outcomes. 

(3) Loan Modification Calls 

Financial institutions also rely upon automated calling methods to contact consumers who are encountering difficulty paying their mortgages or student loans. 

Autodialers and prerecorded messages are used to initiate contact with delinquent 

borrowers, to remind them to return the paperwork needed to qualify for a modification, and to notify borrowers that a modification is being delivered so that the package will be accepted. Significantly, the Commission’s consent requirement is in conflict with the Bureau’s mortgage servicing rules, which require servicers to make a 

good faith effort to establish live contact with a borrower. If the servicer has not 

obtained the consent of the borrower, it cannot—consistent with the TCPA—effiVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00090 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
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16 H.R. Rep. 102–317 (1991). 17 47 U.S.C. § 227(a)(1) (emphasis added). 

ciently make the calls required by the Bureau’s rules to the approximately 50 percent of consumers with wireless numbers only. 

(4) Customer Service Calls 

Financial institutions rely upon the efficiency of autodialed calling to provide follow-up calls to resolve consumers’ service inquiries. For example, if a consumer inquiry requires account research, a customer service representative often completes 

the necessary research and places an autodialed follow-up call to the consumer. 

Autodialed calls are initiated also to remind consumers that a credit card they have 

requested was mailed and must be activated. 

(5) Insurance Policyholder Alerts 

Insurance providers use autodialers to advise consumers of the need to make payment on automobile and life insurance policies to prevent potential lapse. Automobile insurers are required to give written notice 10–30 days in advance before terminating policies for failure to pay. Using an autodialer helps ensure the consumer 

is aware of the need to make payment in time to avoid a lapse in policy, late fees, 

or driving without legally-required liability insurance. 

Similarly, life insurance policies require advance written notice of cancellation. If 

a policy lapses for non-payment, some individuals may no longer be eligible for life 

insurance or may have to pay substantially more for that insurance. Use of the 

autodialed messages helps avoid nonpayment cancellation of the life insurance. 

(6) Disaster Notifications 

Many property insurance companies rely on the speed of autodialers to notify 

their customers when a catastrophe is imminent of how and where to file a claim. 

Furthermore, immediately after a disaster, wireline phone use may be unavailable, 

claim locations may have changed, and normal communications may not be operating, necessitating calls to mobile phones. Similarly, autodialers may also be used 

by insurers to give information regarding the National Flood Insurance Program. 

II. The TCPA Prevents Financial Institutions from Effectively Serving 

Consumers who Wish to Communicate by Mobile Phone 

As interpreted by the Commission, the TCPA imposes significant impediments on 

the ability of financial institutions and other businesses to communicate with those 

consumers who elect to communicate by cell phone. Put simply, the TCPA effectively 

prevents financial institutions from using the most efficient means available to advise these mobile phone-electing consumers of important and time-sensitive information affecting the consumers’ accounts. This is not what Congress intended. In enacting the TCPA, Congress sought to provide consumers with choice of contact, not 

isolation from contact. Making that choice for cell phone users more burdensome 

and less efficient—as the Commission has done in its recent orders—is not what 

Congress sought to accomplish. The report of the House Committee on Energy and 

Commerce accompanying the enactment of the TCPA clearly states that, under the 

TCPA, ‘‘a retailer, insurer, banker or other creditor would not be prohibited from 

using an automatic dialer recorded message player to advise a customer . . . that 

an ordered product had arrived, a service was scheduled or performed, or a bill had 

not been paid.’’ 16

There are two primary ways in which the TCPA, as interpreted by the FCC, imposes significant impediments on the ability of financial institutions to contact consumers, as described below. 

A. The TCPA Has Been Interpreted to Sweep all Non-manual Dialing Technologies 

within the TCPA’s Limited Autodialer Category 

The Commission has construed the definition of an autodialer so broadly that it 

sweeps in technologies used by financial institutions to send important messages to 

consumers that were never contemplated to fall within the definition of this term. 

This expansive interpretation effectively prohibits financial institutions from using 

many efficient dialing technologies unless the consumer’s prior express consent has 

been obtained. Congressional action is needed to return the definition of autodialer 

to its original, limited application. 

As defined in the TCPA, an autodialer 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.’’ 17 Significantly, financial institutions, unlike the abuVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00091 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
88 

18 In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 

et al., 30 F.C.C. Rcd. 7961, 7976 (2015) (emphasis added). 19 Although the Commission established a ‘‘one call’’ safe harbor, this provides little comfort 

to financial institutions, as callers often do not learn whether a call has connected with the intended recipient—as opposed to a party to which the number may have been reassigned—and 

thus do not receive notice when the number has been reassigned to another consumer. 20 Alyssa Abkowitz, Wrong Number? Blame Companies’ Recycling, Wall Street J. (Dec. 1, 

2011), available at http://www.wsj.com/articles/SB100014240529702040120045770701226874 

62582#ixzz1fFP14V4h. 21See 137 Cong. Rec. 30821–30822 (1991) (statement of Sen. Hollings) (‘‘The substitute bill 

contains a private right-of-action provision that will make it easier for consumers to recover 

damages from receiving these computerized calls. The provision would allow consumers to bring 

an action in State court against any entity t hat violates the bill. The bill does not, because 

of constitutional constraints, dictate to the states which court in each state shall be the proper 

venue for such an action, as this is a matter for State legislators to determine. Nevertheless, 

it is my hope that states will make it as easy as possible for consumers to bring such actions, 

preferably in small claims court. . . . Small claims court or a similar court would allow the consumer to appear before the court without an attorney. The amount of damages in this legislation 

is set to be fair to both the consumer and the telemarketer.’’) (emphasis added). 

sive telemarketers from which Congress intended to protect consumers, are interested only in calling the telephone numbers of actual customers and members and 

have no desire or incentive to dial numbers generated randomly or in sequence. 

However, the Commission greatly expanded the scope of the devices classified as 

an autodialer beyond those devices that use a random or sequential number generator. In addition, the Commission concluded a device is an autodialer if it has the 

‘‘potential ability’’ to perform the autodialer’s functions—even if it does not have the 

present ability to do so.18 This interpretation, divorced from the statutory text, 

sweeps in dialing systems used by financial institutions, preventing them from sending important messages to consumers efficiently. In fact, one financial institution 

has resorted to purchasing last generation ‘‘flip’’ cell phones solely to ensure compliance with the Commission’s rulings concerning the TCPA. Financial institutions 

should not be forced to use all-but obsolete technology in order to remain compliant 

with federal law. 

B. The TCPA’s Imposition of Liability for Calling Reassigned Numbers is Harmful 

to Consumers 

As interpreted by the FCC, the TCPA creates a risk of liability for calling a number for which the caller has received consent, but which has been subsequently reassigned to another consumer unbeknownst to the caller. The potential liability for 

calls made in good faith to reassigned numbers threatens to curtail important and 

valued communications between the institution and consumers.19 If the fear of calling a reassigned number prevents a financial institution from sending an alert to 

a consumer about potential identity theft, suspicious activity on the account, or a 

low balance, the consumer suffers. 

The TCPA’s imposition of liability for calls made to reassigned numbers is wholly 

unnecessary to protect the privacy of consumers. There is simply no need or incentive for a financial institution to place a non-telemarketing, informational call to 

anyone other than the intended recipient. Moreover, institutions make significant 

efforts to promote accuracy in the numbers they call, such as providing consumers 

multiple means to edit contact information, confirming a consumer’s contact information during any call with the consumer, regularly checking to confirm that a residential landline number has not been transferred to a wireless number, or providing 

instructions for reporting a wrong number call. 

Financial institutions—which can place billions of informational calls annually— 

cannot completely avoid calling reassigned wireless telephone numbers. Telephone 

companies recycle as many as 37 million telephone numbers each year,20 and yet 

there is no public wireless telephone directory or tool available to identify numbers 

that have been reassigned. As discussed below, Congress should mandate the establishment of a database of reassigned numbers to assist callers with contacting consenting consumers at those consumers’ current number. 

III. Congress Should Reform the TCPA by Imposing a Damages Cap 

We urge Congress to reform the TCPA to ensure that financial institutions and 

other callers can make important, and often time-sensitive, calls to consumers. A 

statute designed to provide consumers with a right to pursue an individual claim 

against an unlawful telemarketer in small claims court and without the need for 

an attorney 21 now threatens any company or financial service provider that seeks 

to use automated dialing technologies to communicate with its customers or members with abusive class action litigation. The balance that Congress struck between 

89 

1The Telephone Consumer Protection Act at 25: Effects on Consumers and Business: Hearing 

Before the S. Comm. on Commerce, Science, & Transportation, 114th Cong. (2016) (‘‘2016 TCPA 

Hearing’’). 2See Bipartisan Budget Act of 2015 § 301, codified at 47 U.S.C. § 227 (2016) (the ‘‘Budget 

Act’’). 

protecting consumers and safeguarding beneficial calling practices has been eviscerated, and recent interpretations of the TCPA clearly demonstrate the Commission’s refusal to restore this balance. 

Congress should amend the TCPA by imposing a damages cap similar to the damage caps assigned to other consumer financial protection statutes. The Truth in 

Lending Act (TILA), the Electronic Funds Availability Act, and the Fair Debt Collection Practices Act each limit the amount awarded in individual and class action litigation. TILA, for example, includes not only individual statutory damages caps, but 

also imposes an aggregate cap in the event of a class action or series of lawsuits 

tied to the same lack of compliance. We believe that a similar cap would be an appropriate addition to the TCPA. We welcome the opportunity to work with Congress 

to determine what the proper damages cap amount would be for TCPA litigation. 

Conclusion 

In enacting the TCPA, Congress struck a balance between protecting consumer 

privacy and safeguarding calling practices that help consumers avoid identity theft, 

late fees, and other harms. The Commission’s interpretations of the TCPA have 

eviscerated that balance, preventing financial institutions and others from serving 

consumers who wish to communicate by cell phone. Congress should protect consumers’ ability to receive important, and often time-sensitive, calls by reforming the 

TCPA. 

NAVIENT

Washington, DC, June 1, 2016 

Hon. JOHN THUNE, 

Chairman, 

Committee on Commerce, Science, and 

Transportation, 

United States Senate, 

Washington, DC. 

Hon. BILL NELSON, 

Ranking Member, 

Committee on Commerce, Science, and 

Transportation, 

United States Senate, 

Washington, DC. 

Dear Chairman Thune and Ranking Member Nelson, 

Thank you for the recent hearing on the Telephone Consumer Protection Act of 

1991 (the ‘‘TCPA’’) and its impact on consumers and businesses.1 When your Committee announced the hearing, Navient looked forward to a fulsome discussion regarding a variety of stakeholder concerns regarding the TCPA, including how the 

statute is hindering efforts to protect consumers who are often prevented from receiving important, time-sensitive non-marketing information. We also expected that 

you would hear about the growing number of unreasonable challenges that organizations face in complying with the TCPA, and how this Congress’s recent passage 

of the Bipartisan Budget Act of 2015 (the ‘‘Budget Act’’)2 can spur much-needed assistance to Federal student loan borrowers. Given the complexity of the student loan 

system and the numerous options available to borrowers in repayment, this discussion is critically important. 

While there were many important issues addressed in the hearing, we were disappointed that there was not a fuller discussion of the importance of contact with 

Federal student loan borrowers and the impediments that the TCPA imposes to 

reaching and helping struggling and at-risk borrowers. Rather than exploring how 

the Budget Act can help prevent Federal borrowers from advancing in delinquency 

or defaulting, we were dismayed by some of the misinformation provided to the 

Committee regarding Federal student loan borrowers, based on preconceived notions 

of—and inaccurate testimony related to—‘‘robocalls.’’ 

We are hopeful that this submission will supplement the record with information 

not provided during the hearing; address several erroneous statements made during 

the hearing; and highlight rules that the FCC has proposed that will undermine the 

clear directive this Congress gave the agency and, if adopted, will cause further 

harm to student loan borrowers. 

We hope that the Committee will consider this additional information as it continues its important work regarding the TCPA and the Budget Act. 

90 

3See 2016 TCPA Hearing, Statement of Sen. John Thune, Chairman, S. Comm. on Commerce, 

Science, & Transportation (‘‘Chairman Thune Statement’’). 4 Id. 

5See S. Rep. No. 102–178, at 2 (1991); H.R. Rep. No. 102–317, at 1 (1991). The House Report, 

for example, noted that ‘‘[u]nrestricted telemarketing . . . can be an intrusive invasion of privacy’’ and that ‘‘[m]any consumers are outraged [at] the proliferation of intrusive, nuisance calls 

to their homes from telemarketers.’’ H.R. Rep. No. 102–317, at 1 (1991). 6See Dept. of Ed., Fed. Student Aid Data Ctr., Direct Loan and Federal Family Education 

Loan Portfolio by Loan Status, https://studentaid.ed.gov/sa/about/data-center/student/portfolio (last visited May 24, 2016). 7 Chairman Thune Statement at 1. 

8 2016 TCPA Hearing, Statement of Margot Saunders, Of Counsel, National Consumer Law 

Center (‘‘NCLC’’). 9 Id. at 4. Even though no citation was provided, we currently have no reason to disagree with 

this claim. 

Our Shared Goal in Helping Borrowers 

Navient is the Nation’s largest student loan servicer and a partner to millions of 

Federal student loan borrowers. Navient does not set or even influence the interest 

rates or terms for Federal student loans; those are set by Congress. We also do not 

set the tuition rates or enrollment fees, which are set by colleges and universities. 

Nor do we set the penalties for non-payment. Instead, our role is to work with borrowers after they have selected the school of their choice and incurred a debt. We 

help borrowers navigate the overly complex array of repayment options as they 

work towards successfully repaying their loans. There are now more than 50 options 

available to borrowers, including deferment, forbearance, and forgiveness, with 16 

repayment programs (nine of which are based on income, as discussed below). 

And Navient is a dedicated and successful partner. Overall, Federal student loan 

borrowers who enter repayment and have Navient as their servicer are 38 percent 

less likely to default than borrowers who use other Federal student loan servicers. 

Mr. Chairman, Navient is one of the businesses ‘‘trying to do the right thing and 

play by the rules.’’ 3 We too understand the frustration that comes when the phone 

rings and the voice on the other line is a prerecording claiming that we just won 

a ‘‘free’’ cruise.4 Your sentiment harkens back to the TCPA’s enactment, legislation 

adopted to curb abusive telemarketing calls.5 But Federal student loan servicers are 

different from telemarketers offering a free cruise, and the TCPA’s implementation 

should reflect this simple truth. 

In the first quarter of 2016, the total value of Federal student loans in default 

reached $121 billion.6 Statutorily mandated penalties for default are harsh and include wage garnishment (without the need for a court order), offset of Federal tax 

refunds, and loss of eligibility for Federal financial assistance. These are in addition 

to the impact to the borrower’s credit file. Calls and text messages from student 

loan servicers are proven, effective reminders that help millions of Americans. And 

keeping borrowers on track has tangible benefits such as making it easier to pass 

a pre-employment credit check, obtain housing, or secure financing for other essential products and services. 

Myths About the TCPA are Harming Borrowers and Other Consumers 

The purpose for the hearing was to ‘‘understand whether [the] TCPA is inadvertently hurting the good actors and consumers.’’ 7 The bad news is that it is. The 

worse news is that seemingly well-minded organizations are advocating for policies 

that threaten to harm consumers and prevent Federal student loan servicers from 

providing borrowers with critical, time-sensitive information that can help avoid financial catastrophe. 

For example, during the hearing, the Committee received testimony that the ‘‘best 

estimate of the total number of people who could be negatively impacted by [the 

Budget Act’s amendments to the TCPA] is over 61 million people,’’ including an estimated 41.8 million Federal student loan borrowers.8 This is a red herring that exponentially overstates the number of affected borrowers. Recall that the Budget Act 

amendments to the TCPA only impact borrowers for which callers did not already 

have prior express consent to call. Navient already has consent to autodial 90 percent of the Federal student loan borrowers that it services, so the Budget Act 

amendments only pertain to the remaining borrowers. 

Moreover, the Committee received testimony that ‘‘[m]any, if not most, of the 

households living below the poverty line rely on pay-as-you-go, limited-minute prepaid wireless products.’’ 9 Again, this is a red herring. In the first instance, unanswered calls typically do not trigger any expense to the wireless subscriber. Second, 

less than one percent of the borrowers that Navient services: (1) use a prepaid cell 

phone; (2) have not provided Navient with consent to contact; and (3) are delinquent 

91 

10 Id. at 5. 11 Id. at 16–17. 

on their Federal student loan obligations. The idea that allowing student loan 

servicers to help borrowers avoid delinquency and default—and the Federal penalties stemming from delinquency and default—will result in massive numbers of 

individuals losing ‘‘access to health care, transportation, emergency, and other essential services’’ and falling victim to ‘‘social isolation’’ 10 borders on hysterics. 

NCLC testified that the major causes of consumer delinquency are unemployment, 

illness and marital problems.11 While this may be true, it does not support restricting attempts to reach Federal student loan borrowers. Unlike other forms of consumer credit, there are numerous options for borrowers to resolve delinquencies and 

avoid default. In some cases, such as repayment plans based on income, the payment obligation can be as low as $0. More than 90 percent of the time that Navient 

has a live conversation with a borrower, the customer is able to resolve his or her 

delinquency. But the converse is also true: 90 percent of borrowers that we service 

who default on their student loans do not have a live conversation with us beforehand, despite our best efforts to reach them. Based on these facts, we should be promoting, not hindering, efforts to connect servicers with borrowers, particularly when 

default prevention options such as deferments due to unemployment or a temporary 

total disability are available. 

Included within the 50 different options available to borrowers are nine different 

income-driven repayment (‘‘IDR’’) plans. These plans allow borrowers to base their 

monthly payment on their discretionary income, adjusted for family size. The 

monthly payment can be as low as $0. Currently, one in four Direct Loan borrowers 

that Navient services is enrolled in an IDR plan. 

Live contact with struggling borrowers is key to helping them navigate the multitude of options and the complexity of the repayment system. Because of the TCPA’s 

restrictions, we are less able to reach and assist borrowers who have not given us 

consent to contact them on their cell phones. As mentioned above, we can autodial 

nine out of 10 of the Federal student loan borrowers we service today. And these 

borrowers are far more likely to be current. Indeed, borrowers who we are not able 

to autodial are more likely to be delinquent and default. Only 50 percent of borrowers who default have provided consent to call them on their cell phones. It bears 

repeating—if we are able to speak with these struggling borrowers, nine out of 10 

will not default. Yet, today’s interpretations of the TCPA impose hurdles to providing these borrowers the very information that they need. 

In sum, there is a strong and direct correlation between Navient’s ability to contact borrowers and the likelihood that a borrower will avoid the serious conVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00095 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE

518NAVIE1.eps
92 

12See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 

Notice of Proposed Rulemaking, FCC 16–57 ¶¶ 8–9 (rel. May 6, 2016) (‘‘NPRM’’). 13 Id. ¶ 14. 14 Id. ¶ 18. 15See APRIL KUEHNHOFF & MARGOT SAUNDERS, NATIONAL CONSUMER LAW CENTER, DEBT

COLLECTION COMMUNICATIONS: PROTECTING CONSUMERS IN THE DIGITAL AGE 4 (June 2015), 

available at http://bit.ly/1LQxpDK. 

sequences of delinquency or default on a student loan, and the TCPA makes it much 

more difficult for Navient to contact those borrowers. 

The FCC is Undermining this Congress’s TCPA Directives 

Fortunately, last year this Congress took swift action to allow Federal student 

loan servicers to continue to help borrowers in need while also maintaining important consumer protections. In no uncertain terms, Congress exempted from the 

TCPA calls to collect debts owed to or guaranteed by the United States. But Congress gave to the FCC the task of implementing regulations. Unfortunately, the 

FCC’s proposed rules, if adopted, would do little to help millions of Federal student 

loan borrowers lower their risk of default. The proposals suffer from several key 

flaws. 

First, the FCC proposes limiting the exemption to calls made after a borrower is 

already delinquent, contrary to Congress’s plain language which makes no distinction between delinquent and non-delinquent borrowers.12 Navient regularly makes 

calls to certain non-delinquent borrowers that are aimed at keeping a borrower on 

track (and thus for the purpose of ‘‘collecting’’ the debt). While Federal student loan 

servicers have no interest or need to call borrowers in general who are current on 

their loans, there are important instances when outreach is key: 

• Borrowers who are approaching deadlines or changes in status: There are many 

instances, such as deferments, forbearances, and the grace period between 

school and repayment, where a borrower may be approaching a new payment 

status. Some of these borrowers—especially those at risk of delinquency—benefit from early outreach to make sure they are aware of their repayment options. One example of an at-risk borrower is one who has previously defaulted 

and has returned to repayment through loan rehabilitation. Navient reaches out 

to these borrowers early—before delinquency—to make sure that they stay on 

track and are able to access the right repayment plan for them. 

• Income-driven repayment enrollment: IDR is a great option for many borrowers, 

but they must apply on-line at the Department of Education or fill out a paper 

application to enroll in an IDR plan. The Department of Education requires 

Federal servicers to call borrowers whose applications are incomplete or denied 

to help them complete their application, regardless of their delinquency status. 

In addition, Navient calls previously delinquent borrowers who have indicated 

that they plan to enroll in IDR but for whom we have not received a complete 

application. Neither of these outreach attempts to borrowers without consent 

would be allowed under the FCC’s proposed rule. 

• IDR reenrollment: Borrowers are required to reenroll annually in IDR plans. 

Navient places reminder calls to borrowers whose annual reenrollment deadline 

is approaching to make sure they submit their paperwork before their payments 

increase. 

The intent of the Budget Act provision is to ensure that Federal student loan borrowers are aware of their options regardless of whether or not they are delinquent. 

It was certainly not the legislation’s intent to prevent reaching out at key times before—or after—delinquency to help a borrower stay on track. 

Second, the FCC proposes not including within the exemption calls to reassigned 

wireless numbers.13 This is untenable. College students change telephone numbers 

frequently, and Navient prevent entirely calls to reassigned numbers. If the new 

holder of a reassigned number refuses to answer a call or respond to a text message 

informing Navient that the number no longer belongs to the borrower, Navient is 

left in the indefensible and unenviable position of either attempting additional contacts using the number (and risk facing litigation) or giving up on contacting the 

borrower. 

Finally, the FCC proposes to severely limit the number of exempted calls to three 

per month—whether or not the called party answers the phone.14 The FCC’s proposal 

has no basis and is far more restrictive than the three calls per week that NCLC 

urged the Consumer Financial Protection Bureau to allow in the context of the Fair 

Debt Collection Practices Act.15 Indeed, the FCC’s limits are more restrictive than 

the four attempts in three weeks that the Department of Education is now requiring 

93 

servicers to undertake to reach Direct Loan borrowers whose IDR applications are 

incomplete. 

The FCC’s efforts to effectively eliminate the exemption are contrary to Congress’s 

clear directive in passing the Budget Act (and contrary to the Administration’s longstanding efforts to include the exemption as part of the budget). In the end, the 

FCC’s rules—if adopted—would hurt, rather than help, borrowers and other taxpayers. 

Congress had good reasons for adopting the TCPA in 1991, but preventing Federal 

student loan servicers such as Navient from helping student loan borrowers avoid 

delinquency and default was not one of them. The Budget Act’s amendments to the 

TCPA open the door for servicers to help borrowers avoid delinquency and default 

while supporting responsible use of Federal taxpayer dollars. We encourage the 

Committee to keep these goals in mind as it continues to oversee the FCC’s implementation of Section 301 of the Budget Act and the TCPA. 

Respectfully submitted, 

SARAH E. DUCICH, 

Senior Vice President, 

Public Policy and Government Relations, 

Navient. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

HON. GREG ZOELLER

Question 1. Would a concrete standard for revocation of consent in the TCPA regulations, as there is for the FDCPA, FCRA, and other banking laws, be helpful in 

reducing the types of contact intended to be prohibited by the TCPA? 

Answer. Opting out of receiving robocalls and other unwanted contacts should require no more effort than pressing a button or telling a caller to stop calling. The 

FDCPA requires a consumer to notify a debt collector in writing that the consumer 

wishes the debt collector to cease further communication. The FCRA allows a consumer to opt out of certain credit offers by notifying the credit reporting agency in 

writing or via a mechanism maintained by the agency. It is burdensome to notify 

a debt collector in writing to cease communications, especially when the consumer 

is not the debtor they are seeking. 

Question 2. Mr. Zoeller, you and a number of other attorneys general sent a letter 

to this committee urging support for the HANGUP Act, arguing that it was necessary because, ‘‘As amended, the TCPA now permits citizens to be bombarded by 

unwanted and previously illegal robocalls to their cell phones if the calls are made 

pursuant to the collection of debt owed to or guaranteed by the United States.’’ Is 

that your understanding of what will necessarily be allowed as a result of the Federal Communications Commission’s implementation? 

Answer. Yes, it is. The majority of debt collection complaints are from non-debtors 

who receive unwanted calls intended for other people. Many of these complainants 

report multiple calls despite informing the callers that they are not the debtor. 

Question 3. What are some of the benefits and challenges of moving forward with 

a mandatory reassigned numbers database? 

Answer. Benefits might include fewer calls to consumers who acquire numbers 

that formerly belonged to debtors. Challenges include the cost of maintaining and 

updating the database and protecting it from unscrupulous telemarketers and 

scammers. 

Question 4. Is there a helpful way to distinguish between random or sequential 

telemarketing calls and texts versus calls or texts to numbers originally provided 

by customers that have been subsequently reassigned? 

Answer. I think not, assuming both types of calls are unwelcome and possibly illegal. 

Question 5. Are texts less intrusive than phone calls? If so, would it make sense 

to have reduced penalties for text message violations of the TCPA in order to encourage contact through text messaging rather than phone calls? 

Answer. Anyone who has been awakened by the insistent buzzing of a text arriving in the middle of the night can attest that texts are not less intrusive than calls. 

Also, many people, especially those on discounted or pre-paid wireless plans. are 

charged for texts. 

Question 6. Are you aware of any negative consequences resulting from the Commission’s 2015 Omnibus Declaratory ruling, including the movement of call centers 

overseas? 

94 

Answer. The movement of call centers overseas was a trend long before 2015. As 

for consequences of the FCC’s 2015 ruling, we would like to see telecommunications 

providers move more quickly to provide more extensive call-blocking services for 

consumers, and solutions that would stop illegal calls before they got through to residential lines. 

Question 7. Is there a database on which callers can reasonably rely that identifies numbers that have been reassigned? 

Answer. I believe there are third party providers who market this information, 

but I have not had occasion to research them. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DEB FISCHER TO

HON. GREG ZOELLER

Question 1. The FCC’s 2015 order for TCPA reassigned numbers allows one call 

across an entire enterprise, even if it has multiple subsidiaries, before a caller can 

be liable for contacting a consumer. This is the case even though there is a no reassigned number list available to check, and the caller will often have no knowledge 

that a numbers has been reassigned. Is there a reason the caller should not be required to have ‘‘actual knowledge’’ that the called number is not that of the initial 

person? What reasonable means can a caller take to ensure a number has or has 

not been assigned? 

Answer. In its Order, the FCC noted that there are solutions in the marketplace 

to inform callers of reassigned numbers. A caller can easily avoid having ‘‘actual 

knowledge,’’ and that is why the FCC deemed it reasonable to assume the caller has 

‘‘constructive knowledge’’ after one post-reassignment call. Assuming that the caller 

is a debt collector, then the caller can use a live operator to contact the debtor. It 

is only when callers attempt to contact debtors en masse via robocalls that they run 

afoul of the TCPA. 

Question 2. Throughout your written testimony, you highlight many negative instances of ‘‘robocalling,’’ many of which involve harassing telemarketing calls. I 

think we can all agree that we dislike telemarketing calls and that we would prefer 

that consumers not receive them. However, there can be uses for robocalling that 

can benefit consumers. For example, there are student loan providers and servicers 

in Nebraska who try to contact students who are at risk of defaulting on their student loans to help them rather than harass them. In your opinion, are there any 

times that robocalls should be permissible under the TCPA, such as where consumers might need or want to receive the calls? 

Answer. In my experience, consumers want to receive a robocall when school is 

canceled due to a snow emergency, or their prescription medicine is ready to be 

picked up at the pharmacy. Most other robocalls are looked upon as unwelcome, impersonal intrusions into their privacy. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. STEVE DAINES TO

HON. GREG ZOELLER

Question. I appreciate your remarks during the hearing about the need for policymakers to ‘‘tighten the line of defense’’ for TCPA litigation. 

Last month I filed an amendment to the FCC Reauthorization Act which would 

incentivize businesses to voluntarily implement compliance programs to govern the 

activities taken by the independent, third-party dealers and service providers. 

Under my amendment, if a business has implemented robust compliance programming then that business could raise evidence of these measures as an affirmative 

defense during a private right of action. This would go a long way towards clarifying 

uncertainty that has arisen regarding the attachment of vicarious liability—uncertainty that is inhibiting more businesses from implementing these highly effective 

compliance programs. 

If the TCPA were amended to include language that would incentive businesses 

to voluntarily implement TCPA compliance programs that would govern the activities of independent, third-party service providers, would such a modification constitute a ‘‘better defense’’ that would spur greater business compliance with TCPA, 

and fewer TCPA violations? Why or why not? 

Answer. In my opinion, a defense is better than an exemption. An affirmative defense places the burden on the business to prove it has complied with the law. A 

compliance program would be preferable to businesses turning a blind eye to how 

its third party lead generators are contacting consumers. 

95 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. MARIA CANTWELL TO

HON. GREG ZOELLER

Question. True Blue, a Tacoma, Washington-based company is focused on getting 

blue collar workers back to work. It matches unskilled and underemployed people 

seeking work with local businesses that have short medium and long term job opportunities. 

If the worker consents in writing, True Blue makes the match by sending a text 

message called a ‘‘work alert’’ to the worker giving the details of the job offer including wage, location and expected time commitment. The worker texts back yes or no 

depending on his or her interest. 

If the worker has not consented in writing to receiving ‘‘work alerts’’ he or she 

must show up at a worker recruiting center at 5 a.m. and wait for work. 

In 2014, a former client brought suit on behalf of a class of workers claiming that 

True Blue had been texting him and others without permission. 

An examination of their ‘‘work alert’’ notification system revealed that due to recordkeeping error, several hundred workers that had opted out of the ‘‘work alert’’ 

text notifications system continued to receive text messages. 

The lawsuit is still pending. But because the Telephone Consumers Protection Act is a strict liability statue which mandates $500 per text message violation, True 

Blue is facing a decision that could put potentially put it out of business. 

There are whole classes of stakeholders such as schools, non-profit social service 

agencies, medical offices, employment agencies, etc. . . that may reach out to their 

clients or customers using text messages or auto dialers to perform a service like 

remind them of medical appointments, inform them of job opportunities, pass on 

schedule information and give updates on available benefits or the status of applications. 

In some cases, these types of entities may run afoul of the Telephone Consumer 

Protection Act because of mere recordkeeping error. 

While this not desirable, it seems different than the type of harm that consumers 

experience when being bombarded with marketing materials from an entity trying 

to sell something. 

Making entities like this subject to large fines and court judgments doesn’t seem 

like the result we want. 

I don’t want to weaken consumer protections under Telephone Consumer Protection Act (TCPA) but I do want the law to direct the harshest penalties for the most 

egregious violations that impact consumers. 

Some state and Federal consumer protection laws have ‘‘good faith’’ or ‘‘bona fide 

error’’ exceptions. Is there a role for those types of exceptions to the TCPA without 

weakening consumer protection? If so how would should it be applied? 

Answer. Thank you for giving me the opportunity to respond to your questions. 

I do not presume to interject my opinion concerning a case that is currently pending before the court. I will base my response on the Telephone Consumer Protection 

Act itself, and not on any particular case. 

Since 1991, the TCPA has prohibited the use of automatic telephone dialing systems (autodialers) or artificial or prerecorded voice messages for calling emergency 

telephone lines, health care facilities (including patient rooms), telephone numbers 

assigned to wireless services, and services for which the consumer is charged for the 

call. In its February 2012 Report and Order, the FCC confirmed that the prohibition 

encompassed both voice calls and text messages. In re Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 FCC Rcd. 1830, 1832 

(2012). 

Crafting legislation that differentiates between good and bad unsolicited text messages in every case will be a great challenge if pursued. Regardless of the content 

of the message or the intention of the sender, the harm is the same: Interruption 

of the consumer’s day (or night), intrusion on the consumer’s privacy and costs to 

consumers who pay for texts. Therefore, I believe that inserting ‘‘good faith’’ or 

‘‘bona fide error’’ exceptions into the TCPA prohibitions against robocalls and unsolicited texts would weaken consumer protection and leave the TCPA vulnerable to 

Constitutional challenges. If the TCPA must be amended, it would be better to consider an affirmative defense option rather than an exception. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. CORY BOOKER TO

HON. GREG ZOELLER

Question 1. According to the PEW Research Center, 13 percent of Americans with 

a household income under $30,000 are smartphone dependent. These individuals do 

not have the luxury of owning both a landline and a mobile telephone. In addition, 

96 

many of these individuals lack Internet access. The Telephone Consumer Protection 

Act (TCPA) provides important protections to consumers to prevent them from receiving unwanted phone calls. This is not merely a matter of annoyance: low income 

communities who rely on cell phone service have a limited number of voice minutes 

and if they were barraged with unwanted calls, it could seriously impact their livelihood or even safety in the event of an emergency. 

Can you speak to the disparities in reliance on wireless phone service that exist 

in your state and across the country? 

Answer. I do not have any direct information about the reliance on wireless phone 

service. However we have discovered some specific data about Hoosier households. 

As of 2014, 95 percent of Hoosier households with annual income under $30,000 had 

some form of telephone service. (Federal Communications Commission, Universal 

Monitoring Service Report, 2015, Table 6.8). 

In 2014, approximately 47 percent of Indiana households were wireless-only. (U.S. 

Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics, National Health Interview Survey 

Early Release Program, Table 1, Released 02/2016). 

Question 2. Do you believe that landline phones with unlimited minutes should 

have the same regulations as mobile phones, which are often limited in their call 

time? 

Answer. I believe that all telephone users are entitled to protection from unwanted calls, regardless of whether the phone is a cell phone or a landline. It is 

important to remember that many scams are conducted by contacting people over 

their phones. Many of our elderly people fall victim to scams that were initiated 

over a landline. This is why I have been calling on the major telephone carriers to 

provide call-blocking technology that would stop the mass amount of calls from getting through their systems and into individuals’ landlines. The more we can stop 

the calls from coming through, the less fraud that will be perpetrated on our citizens. 

Question 3. As you know, the TCPA is a complex statute. It is my understanding 

that some stakeholders, including companies large and small, have found that mistakes can happen even when they recognize the importance of TCPA compliance to 

minimize consumer harm. Many of these businesses choose to invest in programs 

that help ensure compliance by implementing training, monitoring, and enforcement 

mechanisms. How can businesses of all sizes maximize compliance with the TCPA? 

Answer. Businesses can begin by recognizing that consumers are barraged with 

unwanted calls and scams every day, and they do not want to receive unsolicited 

calls and texts. There are many ways to ensure their customers do indeed want 

their calls, and in Indiana, companies are expected to comply with the requirement 

that customers must opt in to receiving such calls and texts. This is a courtesy to 

their customers who have made it known up front that they may or may not wish 

to receive such calls. 

Question 4. Do you think compliance programs are a good investment for companies that use third party service providers? Why or why not? 

Answer. Without knowing the cost and efficacy of the compliance program, I cannot make a determination. However, any process that reduces or eliminates calls 

and texts to people who do not want to receive them, while minimizing the potential 

for fines and statutory damages, is potentially a good investment. 

Question 5. As you know, debt collection negatively impacts many Americans who 

are already financially insecure. It is incumbent upon Congress to ensure that there 

are clear rules governing the practice of debt collection. Earlier this year, Senator 

Mike Lee and I introduced the Stop Debt Collection Abuse Act, which clarifies that 

debt buyers are debt collectors; expands the definition of consumer debt; and limits 

egregious fees. In addition, reports show that thirty-party debt collectors collecting 

on behalf of local and state governments have in some cases violated the Fair Debt 

Collection Practices Act. Our bill would address this issue by examining the use of 

debt collectors by local and state governments. 

While the Stop Debt Collection Abuse Act takes some steps at the Federal level 

to directly protect consumers, I am concerned that practices at the state and local 

level are making the situation worse. Can Congress address these problems at the 

state and local level? If so, how? 

Answer. Indiana’s law does not distinguish between a private company collection 

action and a state or local government collection action. Federal involvement in this 

manner would be counter to what many states have done on their own, and if there 

would be additional Federal regulation, it must ensure it does not weaken any 

state’s statute in this regard. 

97 

Question 6. Under pressure to tighten budgets, Congress has turned to debt collection as a way to regain lost revenue. In October, a provision was tucked into mustpass budget legislation that created a new exemption to the TCPA. This exemption 

allows debt collectors working on behalf of the Federal Government to contact individuals without their consent. What precedent does this set for debt collection by 

local and state governments? 

Answer. Along with 24 of my fellow Attorneys General, I support S. 2235, the 

HANGUP Act, which would eliminate the exemption allowing Federal debt collectors to robocall cell phones. If the exemption is allowed to stand, then even more 

erosion of consumers’ protection from unwanted calls and texts is likely. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

BECCA WAHLQUIST

Preliminary comment from Ms. Wahlquist 

Thank you for the opportunity to provide further information in response to questions for the record. As I noted during my testimony at the Commerce Committee 

Hearing on May 18, 2016, abusive litigation brought under the Telephone Consumer 

Protection Act (‘‘TCPA’’) is harming American businesses that earnestly seek to comply with that law. Businesses large and small find themselves targeted by TCPA 

litigation designed to enrich professional TCPA plaintiffs and the cadre of TCPAfocused plaintiffs’ lawyers who seek staggering statutory damages for communications not required to have caused any actual damage to anyone. These businesses 

are not engaged in the spam, randomly and sequentially dialed telemarketing that 

the TCPA was designed to curb. 

I hope my further discussion below of this litigation abuse can highlight the need 

for legislative action to revise antiquated provisions of the TCPA and factor in modern technologies (i.e., smartphones) that were never anticipated when the TCPA was 

enacted in 1991. 

Question 1. Would a concrete standard for revocation of consent in the TCPA regulations, as there is for the FDCPA, FCRA, and other banking laws, be helpful in 

reducing the types of contact intended to be prohibited by the TCPA? 

Answer. The FCC majority’s pronouncement in its July 2015 Order that consumers who had provided a business with prior express consent to make certain 

types of autodialed/prerecorded calls could revoke prior consent at any time and by 

any means (including informing a store clerk at a storefront location that consent 

was being revoked) has put American businesses in an untenable position. Businesses have no realistic way to collect and record such revocations. Moreover, there 

is no mention in the TCPA of revocation for a ‘‘prior consent’’, and thus no direction 

for how such a revocation should be made by a consumer. 

A concrete standard for revocation (such as that established in the FDCPA and 

other laws) would be helpful both to consumers and to businesses. Consumers would 

know that their revocation requests would be received and processed by the business, and businesses would have notice when revocation requests were made via the 

required channels. The standard could then require that a business process and implement the revocation request within a set timeframe, such as 15 days for calls or 

3 days for text messages (which can also be stopped immediately through a ’’STOP’’ 

reply to a text). Consumers would have a means to control the communications they 

opt to receive from companies, and businesses could ensure that procedures and 

practices existed to comply with requests made in accordance with the concrete 

standard. 

Establishing a means and method for revocation is particularly important to curb 

litigation abuse. Since the FCC majority’s order in July 2015, companies have found 

themselves being ‘‘set up’’ with revocation requests made in unorthodox means or 

with unclear language that would not alert a representative or an automated system that the consumer wishes to revoke prior express consent for certain communications. With a concrete standard for revocation in place, only those companies 

that ignore revocation requests made via those established procedures would face 

TCPA liability for continued communications placed after the time to process and 

implement requests has passed. And companies who do the right thing will have 

a clear standard to follow. 

Question 2. Attorney General Zoeller and a number of other attorneys general 

sent a letter to this committee urging support for the HANGUP Act, arguing that 

it was necessary because, ‘‘As amended, the TCPA now permits citizens to be 

bombarded by unwanted and previously illegal robocalls to their cell phones if the 

calls are made pursuant to the collection of debt owed to or guaranteed by the 

98 

United States.’’ Is that your understanding of what will necessarily be allowed as 

a result of the Federal Communications Commission’s implementation? 

Answer. I appreciated the opportunity to address the Committee on the TCPA and 

its impact on American businesses; the HANGUP Act is beyond the scope of my testimony, which was limited to the TCPA. As to the position of the Attorney General, 

I note that I was very encouraged at the hearing by Attorney General Zoeller’s discussion of the need for TCPA affirmative defenses for companies that strive to comply with this law and that develop policies, procedures, and training to ensure compliance. 

Question 3. What are some of the benefits and challenges of moving forward with 

a mandatory reassigned numbers database? 

Answer. While a reassigned database is a good idea in theory, actual implementation could be challenging. For example, it is difficult to see how any such database 

could be created and maintained by the government absent enormous expenses of 

time and resources. Further, similar databases are being explored in the private sector. 

Importantly, a reassigned number database does not resolve all liability—it would 

do nothing to help businesses who received a telephone number that was wronglyprovided by a consumer from the very start, or whose consumers are sharing telephone numbers across family plans and changing phones within those plans without 

notice to the phone provider. 

What well-intentioned American businesses need is not a future and partial solution to TCPA litigation; companies need more immediate help through the implementation of affirmative defenses into Section 227(b) that exist already in Section 

227(c)’s private right of action section, and through legislative clean-up of the TCPA 

to include provisions that exist in every similar Federal statute providing a private 

right of action (i.e., statute of limitation and damages caps). The final section of my 

written testimony provided earlier to the Committee addresses several updates to 

the TCPA that could provide meaningful reform. 

Question 4. Is there a helpful way to distinguish between random or sequential 

telemarketing calls and texts versus calls or texts to numbers originally provided 

by customers that have been subsequently reassigned? 

Answer. It is important to distinguish between the two types of calls described 

in this question: random and sequentional telemarketing calls were the intended 

target of Section 227(b) of the TCPA, which is likely why that section does not include the affirmative defenses provided in Section 227(c), as there would be no defense for a company attempting to reach its own customers at customer-provided 

numbers if the company was randomly reaching out to any and every telephone 

number generated by the kind of ATDS in use in 1991. 

On the other hand, calls or texts to customer-provided telephone numbers that 

have been reassigned to different consumers are entirely different. The recipient of 

a call or text to a customer-provided number includes receiving targeted communications designed to reach a company’s actual customer. The company cannot benefit 

from, and would not want to send, such targeted messages (generally transactional 

and customer-specific information) to a wrong party. 

As to whether or how the two types of calls described in this question could potentially be distinguished by an entity such as a telephone service provider, I do not 

have the technical expertise to know whether such a distinction could be made, let 

alone who could make it. But I do know that Congress in 1991 could never have 

envisioned companies facing such staggering financial liability for reaching out, with 

modern technologies, to customer-provided numbers that the company, in good faith, 

believes are being made with that customer’s prior express consent, to the customer’s given point of contact. 

Question 5. Are texts less intrusive than phone calls? If so, would it make sense 

to have reduced penalties for text message violations of the TCPA in order to encourage contact through text messaging rather than phone calls? 

Answer. It is clear from the legislative history of the TCPA that text messages 

were not envisioned at the time it was drafted (nor could they be, when no cellular 

telephone capable of receiving a text message existed in 1991). Technology has advanced, and the advent of text messaging has provided a new and less intrusive 

means for communications. Rather than involving a series of loud rings, and the 

need for the recipient to pick up a telephone line to speak with a caller, a text message provides a communication that can be seen with a glance, at the recipient’s 

convenience. Furthermore, companies sending text message communications to customers can enable systems to recognize a ‘‘STOP’’ reply to that text message quickly 

and efficiently, so that a consumer can easily and almost immediately stop further 

text communications if they become unwanted. 

99 

Given the nature of text messages, and the fact that the TCPA has no provision 

addressing this type of communication that was not conceived of in 1991 (when even 

e-mail was a novel thing used by few), it could make sense for the TCPA to be updated to specifically address text messaging and whether and how penalties should 

apply (for example, if a company continues to send text messages after a customer 

has revoked prior consent). Of course, affirmative defenses should be provided to 

protect a company from staggering financial liability in the event of a mistake or 

good faith error (such as the affirmative defenses in Section 227(c) for violations of 

the Do Not Call provisions). 

As for a reduction in per-message potential liability for text messages versus telephone calls, while such a provision could make sense and could be implemented 

given the nature of text messages, the most important revision in terms of liability 

is a cap on the available individual and class damages available under the TCPA, 

as detailed in the written testimony I provided earlier to the Committee. Indeed, 

a per-text damages reduction, even to a number such as $25 per text message, does 

little to help a company with millions of customers when a class action is filed. For 

example, if damages were set at $25 per text (or 5 percent of the current per message liability), a lawsuit claiming that five text messages were sent over the course 

of a year in violation of the TCPA to each of a company’s 20 million customer-provided numbers would immediately put a minimum of $250 million at issue in a 

classwide litigation. 

Question 6. Are you aware of any negative consequences resulting from the Commission’s 2015 Omnibus Declaratory ruling, including the movement of call centers 

overseas? 

Answer. While I do not have direct knowledge of the movement of call centers 

oversees in response to the July 2015 Order, I have heard anecdotal evidence of 

such events. What I can speak to, with personal knowledge, is the significant increase in TCPA litigation after that Order was issued. 

TCPA litigation is flooding and crowding Federal courts, threatening businesses 

with annihilating damages, and offering no real benefit to the consumers who constitute putative class members in actions designed to provide significant attorneys’ 

fees to the counsel bringing TCPA class actions. I discuss these trends in the written testimony I provided in advance of the May 18, 2016, hearing. 

Question 7. Is there a database on which callers can reasonably rely that identifies numbers that have been reassigned? 

Answer. There are several companies within the private sector that are making 

strides towards providing solutions to companies that will mitigate risk of TCPA 

lawsuits caused by calls to reassigned telephone numbers. The Committee has heard 

of Neustar, and I am also aware of a newer company—Early Warning—that has developed its own solution to identify when a telephone number may have changed 

hands after being provided to a company. We can anticipate that private sector companies will continue to develop databases and tools to mitigate TCPA risks, and that 

larger businesses (in particular) will be able to contract to use such tools. However, 

it is important to note that even if every reassigned telephone number eventually 

could be flagged via such a solution, a business is still at risk of calling a ‘‘wrong’’ 

number because it was wrongly provided at the start by the customer (e.g., the customer transposes two digits, or gave a friend’s number), or because a family plan 

masks the identity of the actual user of a telephone. 

I am currently defending a number of TCPA cases brought in circumstances in 

which a reassigned number database could not have been helpful. For example, one 

class action suit is headed by a mother who provided a company with a telephone 

number that was later given by her to her teenage daughter (who received the calls 

at issue); the family-plan telephone number is owned by the mother and bills paid 

by the mother, so any search would show that number still belongs to the mother/ 

customer. I am also defending a class action suit brought by someone whose telephone number was erroneously provided by a customer as her own number so that 

from the very start, the company had a wrong number that was never reassigned. 

Such lawsuits highlight the need for affirmative defenses to be added to Section 

227(b) to protect companies who implement compliance policies, procedures, and 

training and who make communications in good faith to customer-provided numbers, as well as the need for caps on available damages under the TCPA for individual and class litigations. 

Question 8. What action could Congress or the Federal Communications Commission take to help callers avoid costly discovery/litigation in cases where they have 

not violated TCPA? 

Answer. Congress should explore modernizing the TCPA to help businesses avoid 

costly discovery and litigation in TCPA lawsuits by providing affirmative defenses 

100 

for Section 227(b) claims, and capping available statutory damages for this no-actual-harm-needed statute, as detailed in my previously provided written testimony. 

Moreover, Congress can make a significant difference through discovery rules on 

proportionality, so that the recipient of a single call cannot seek discovery into all 

telephone calls placed by a company within the previous four years, if that person’s 

own claim can be refuted via discovery focused only on the call that person received. 

Congress could also help American companies by shifting some of the cost burdens 

involved in pulling class-wide discovery on millions of communications to the TCPA 

plaintiffs’ firms, who are seeking that information in a bid to accumulate a significant enough number of at issue calls to force class-wide verdicts or settlements 

(from which those firms plan to seek significant fees and costs). If the person requesting such classwide discovery was required to pay the costs companies incur to 

accumulate and provide that information, then abusive litigation would be curbed 

and litigation more likely to have merit would proceed. 

Question 9. Are you aware of any small businesses that have gone out of business 

as a result of the legal fees or settlements associated with a TCPA litigation? 

Answer. I am personally aware of many small business whose existence were 

threatened by the TCPA. For example, one current small-business client of mine is 

losing sleep over the thought that if we are not successful in our early defenses, it 

may need to bankrupt its business and let its six full-time employees go because 

of the limited funds it has available to defend the putative class action brought 

against it. 

Similarly, I have spoken with the owner of a Detroit company with thirty employees who would have had to shutter its businesses if it lost in a lawsuit brought for 

some targeted faxes it sent to its customer list, with a Pennsylvania family-owned 

plumbing company deciding whether it needed to bankrupt in light of similar TCPA 

litigation, and with a Florida husband-and-wife start up debating whether to use 

its entire family savings account to fund its defense of a TCPA suit. 

So while (thankfully) none of my small business clients have gone out of business 

as the result of TCPA litigation, given the onslaught of TCPA litigation and the 

number of small businesses targeted in such litigation across the country, I would 

not be surprised to find that various small companies have closed up shop when 

faced with the expense of defending TCPA litigation. 

Question 10. Are you aware of any small businesses that have gone out of business as a result of the legal fees or settlements associated with a TCPA litigation? 

Answer. I incorporate herein my response to Question 9 above. 

Question 11. In the recent CFPB Notice of Proposed rulemaking for arbitration, 

the CFPB appears to recognize the challenges small businesses have when faced 

with TCPA related class action litigation. In the rule they note, ‘‘. . . the Bureau 

recognizes the concern expressed by SERs, among others, that particular statutes 

may create the possibility of disproportionate damages awards.’’ Do you have similar 

concerns about how the statutory damages associated with TCPA litigation can 

threaten small businesses? 

Answer. I have long been concerned with how uncapped statutory damages associated with TCPA litigation can threaten small businesses; as I noted in response to 

Question 9 above, I have spoken with various small business owners whose first 

knowledge of the TCPA came through service of a class action complaint seeking 

damages that would bankrupt even a larger and established company. I have one 

client accused of sending a single text message to 64,000 persons without prior consent (despite the company’s belief that it was sending that text only to people who 

had affirmatively asked for that message). That single transmission has led to a putative class action suit seeking $96 million in trebled damages available under the 

TCPA (even though this class action is the only complaint that was filed regarding 

that single text message). 

With the uncapped statutory damages available under the TCPA, a transmission 

of 5,000 facsimiles sent in a targeted advertising campaign by a small business 

(many of which transmissions were received as e-mails via the recipient’s fax server) 

would, for example, lead to a minimum of $2.5 million in TCPA damages. This is 

a staggering amount of liability for a small business to face. Given such numbers, 

small American businesses are forced into hefty individual settlements with putative class representatives in order to avoid the costs of defense and the risks of annihilating damages-settlements that alone, even at ‘‘small’’ amounts such $25,000, are 

enough to threatened the continued growth and success of that business. 

Thus, the legislative revisions I outlined in my original written testimony are 

needed for small American businesses as much as they are needed for the larger 

companies often targeted by TCPA suits. 

101 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. DEB FISCHER TO

BECCA WAHLQUIST

Question. The FCC’s 2015 order for TCPA reassigned numbers allows one call 

across an entire enterprise, even if it has multiple subsidiaries, before a caller can 

be liable for contacting a consumer. This is the case even though there is a no reassigned number list available to check, and the caller will often have no knowledge 

that a numbers has been reassigned. Is there a reason the caller should not be required to have ‘‘actual knowledge’’ that the called number is not that of the initial 

person? What reasonable means can a caller take to ensure a number has or has 

not been assigned? 

Answer. The FCC majority’s 2015 Order did businesses no favor in providing a 

safe harbor under Section 227(b) of a single call for businesses who believe they are 

reaching out to a customer, but who instead are unknowingly contacting a different 

person because a telephone number was reassigned or wrongly provided in the first 

place. I believe that the FCC thought that this single call exemption would mirror 

the one-call safe harbor provision in Section 227(c), in which the statute itself makes 

clear that a person must receive two calls placed in violation of Do Not Call rules 

before being able to bring a private action under that section of the TCPA for all 

but the first call. But when it comes to Section 227(c), companies have a Federal 

Do Not Call list and their own internal Do Not Call lists to check against, and thus 

are on notice as to what numbers cannot receive telemarketing calls. This ‘‘one free 

call’’ actually provides for a single mistaken call (made despite DNC list membership) before litigation can be brought. 

However, as to Section 227(b), and texts or calls that are autodialed/prerecorded 

and placed to cellular phones, a company has no guarantee that a phone number 

provided by its customer remains in possession of, or is primarily used by, that customer. So the ‘‘one free call’’ doesn’t provide leniency for a single mistake; while 

there might be an indication from that single call that the telephone number no 

longer belongs to the intended recipient (i.e., someone answers and informs the caller that it is a wrong number), in most circumstances the company will learn nothing 

from that call that would provide notice that the telephone number has changed. 

Thus, actual knowledge of reassignment should be required before a caller can be 

held liable under the TCPA for making additional calls to a reassigned number. 

Knowledge cannot be presumed, and the FCC majority recognized that it will be 

impossible for businesses to know to a certainty that a telephone number has been 

reassigned simply from calling that number, instead noting in its July 2015 Order 

several ‘‘indicators’’ that could be helpful in learning of a reassignment. But my experience with companies doing their best to comply with the TCPA, and who only 

reach out to their own customers, is that often these indicators (i.e., a voice-mail 

providing a different person’s name than the customer in its greeting) are not 

present. 

I note that most businesses do contractually require customers to update their 

contact information if it should change, but there is no way to ensure that customers will do so. And the FCC’s ‘‘solution’’ to the fact that a company often cannot 

know when a number has changed is no solution at all: in footnote 302 of the July 

2015 Order, the FCC opines that American businesses calling a wrong number because a customer did not update its information should consider suing those customers. See In re Matter of Rules and Regulations Implementing the Tel. Consumer 

Prot. Act of 1991, 30 F.C.C.Rcd. 7961, n. 302 (2015) (‘‘The failure of the original consenting party to satisfy a contractual obligation to notify a caller about such a 

change does not preserve the previously existing consent to call that number, but 

instead creates a situation in which the caller may wish to seek legal remedies for 

violation of the agreement.’’). This is hardly a consumer-friendly approach to the 

problems of TCPA litigation abuse. 

So, the problem is that there is no way to guarantee that a customer-provided 

telephone number has not changed hands (particularly when it is passed from one 

family member to another in a group-paid family plan). The ‘‘one call’’ safe harbor 

provides no real protection. American businesses are left without any reasonable 

method to avoid TCPA liability, further highlighting the need for specific affirmative 

defenses within Section 227(b) that would protect good-faith callers who implement 

compliance policies, procedures, and training, as detailed in my written testimony 

provided in advance of the May 18, 2016, hearing. 

102 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

MARGOT SAUNDERS

Question 1. Would a concrete standard for revocation of consent in the TCPA regulations, as there is for the FDCPA, FCRA, and other banking laws, be helpful in 

reducing the types of contact intended to be prohibited by the TCPA? 

Answer. It would certainly be helpful for consumers to be provided with notice of 

their right to cancel, or revoke consent under the TCPA. The FDCPA does not have 

a right to cancel or revoke consent. It does provide consumers with the right to 

cease communications, under 15 U.S.C. § 1692c(c). That right is helpful, but not as 

valuable as one might think because (a) consumers are not provided notice of this 

right, and (b) consumers are often afraid to request that all communication cease 

because they fear that such a request will spur litigation. 

The FDCPA also provides consumers with a right to be free from communications 

which are at ‘‘inconvenient’’ times pursuant to 15 U.S.C. § 1692c(a). This right does 

not require a written notice from the consumer for it to be exercised and is generally 

interpreted as providing a bright-line test for collectors on when not to call consumers. 

The FCRA does not have a revocation of consent requirement of which I am 

aware. 

Question 2. Attorney General Zoeller and a number of other attorneys general 

sent a letter to this committee urging support for the HANGUP Act, arguing that 

it was necessary because, ‘‘As amended, the TCPA now permits citizens to be 

bombarded by unwanted and previously illegal robocalls to their cell phones if the 

calls are made pursuant to the collection of debt owed to or guaranteed by the 

United States.’’ Is that your understanding of what will necessarily be allowed as 

a result of the Federal Communications Commission’s implementation? 

Answer. The Federal Communications Commission is in the midst of a rulemaking on exactly this issue. Based on the proposals articulated in its Advance Notice of Proposed Rulemaking, we are hopeful that the final regulations will only permit a limited number of calls to debtors who have not consented, and that the consumer will have the right to stop unwanted calls. But we will not know what the 

limitations on the calls will be, if any, until the final regulations are promulgated. 

Question 3. What are some of the benefits and challenges of moving forward with 

a mandatory reassigned numbers database? 

Answer. The industry of callers has professed difficulties complying with the 

FCC’s 2015 Omnibus Order because they say there is no reasonable way for them 

to know when the phone numbers have been reassigned to new people. The chief 

benefit of a mandatory reassigned numbers database is that it would provide a 

near-perfect way for callers to determine which numbers have been reassigned since 

they obtained consent to call those numbers. 

A database would be fully accurate and relatively inexpensive to operate and access by the caller if it has the following components: 

1. All cell phone providers would be required to participate. 

2. Each cell phone provider would give timely information about all cell phone 

numbers under its control for which there is a change in ownership. 

3. The information provided to the database would simply be—on each reporting 

date—any telephone number that had been returned to the cell phone company 

(because it was dropped or abandoned or terminated) since the previous reporting date. 

4. The providers would submit these reports within a short time—likely one or 

two one days—from the date that the number was dropped. 

5. Callers could access the database easily online and simply query: ‘‘For telephone number XYZ, when was the last time it changed ownership?’’ There 

would be no big data dump from the database, just the simple answer to the 

question, which would be along the following lines: ‘‘Number XYZ most recently changed ownership on ABC date.’’ 

6. The fees charged to callers for accessing the information in the database would 

pay for the maintenance of the database. 

The challenge to a fully effective database is simply having all of the cell phone 

companies agree to establish such a database and participate in it. 

The reassigned number problem need not really be a problem. A relatively simple 

solution is within reach. 

103 

1For more information, see Early Warning’s website at http://www.earlywarning.com/aboutus.html. 2http://www.donotcallprotection.com/blog/reassigned-numbers-right-party-verification-tcpa. 

3http://www.payfone.com/numberverification/ 

4 Id. 

5https://www.neustar.biz/resources/whitepapers/understand-tcpa-law-and-mitigate-risk. 

Question 4. Is there a helpful way to distinguish between random or sequential 

telemarketing calls and texts versus calls or texts to numbers originally provided 

by customers that have been subsequently reassigned? 

Answer. I am not sure that there is. This question seems to be mixing apples and 

oranges. Whether callers are calling random or sequential numbers goes to the issue 

of whether their calling methodologies meet the coverage requirements under the 

TCPA because the automatic dialing system used has that capacity (under 47 U.S.C. 

§ 227(a)). The issue of whether of number has been reassigned goes to whether the 

person who receives the call has provided consent to be called, as is required if the 

call is made to a cell phone and is not for an emergency purpose (under 47 U.S.C. 

§ 227(b)(1). 

Question 5. Are texts less intrusive than phone calls? If so, would it make sense 

to have reduced penalties for text message violations of the TCPA in order to encourage contact through text messaging rather than phone calls? 

Answer. There are some minimal differences between the two, but texts are 

invasive of consumers’ privacy just as calls are. We do not think there should be 

different standards. 

Question 6. Are you aware of any negative consequences resulting from the Commission’s 2015 Omnibus Declaratory ruling, including the movement of call centers 

overseas? 

Answer. I am not aware of any negative consequences. 

Question 7. Is there a database on which callers can reasonably rely that identifies numbers that have been reassigned? 

Answer. My understanding is that there are several databases and other programs in the marketplace that either specifically provide the answer to the question 

of whether the number is reassigned, or provide other assistance to callers on this 

issue. Just a few of these examplse include: 

• Early Warning, a data exchange company,1 whose website indictates that this 

company runs a database that can be accessed by callers to determine the status of each of the numbers they want to call. 

• Another company appears to be Do-Not-Call-Protection,2 which promises to help 

callers ensure they are calling the parties that provided consent. 

• A company called Payfone 3 also offers a ‘‘solution [which] applies custom logic 

to the 8 million+ daily phone number and mobile operator change events in 

order to determine whether or not phone number ownership has changed.’’ 4

• Neustar indicates that it provides solutions for TCPA potential liability by providing access to ‘‘Neustar’s unparalleled phone data repository. The solution 

provides users with the most accurate, comprehensive and up-to-date consumer 

and business data in the industry—updated every 15 minutes from over 250 

sources, including the Nation’s leading telecommunications service providers.’’ 5

However, the best option to protect callers from liability for calling reassigned 

numbers would be for a database to be established in which all cell phone providers 

are required to participate. (Please see my answer to Chairman Thune’s question 

# 3 on this point.) 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DEB FISCHER TO

MARGOT SAUNDERS

Question 1. In your testimony, you state that ‘‘Congress deliberately created statutory penalties in the TCPA to ensure compliance.’’ You also mention that these unwanted calls are increasing. Do you have data to indicate the amount of fines and 

awards that have been collected as a result of the increase in unwanted calls? 

Answer. I do not have specific data on the amount of fines and awards collected 

as the result of the increase in unwanted calls. I know that even as industry is complaining about TCPA litigation, the number of unwanted calls is increasing. This 

is evident from the escalating number of complaints to government agencies about 

these unwanted calls. As I said in my updated testimony: an average of 184,000 

complaints were made to the Federal Trade Commission (FTC) every month in 2015 

104 

6Federal Trade Commission, National Do Not Call Registry Data Book, FY 2015, at 5 (Nov. 

2015). 7 Id. at 4. 8 Id. at 5. 9The 2016 figures for robocall complaints to the FTC’s Do Not Call Registry were supplied 

by the FTC’s Bureau of Consumer Protection on May 12, 2016. The 2016 annualized complaint 

data was determined by averaging the total complaints received in the first four months and 

then multiplying that monthly average by twelve. 10See Comments of Navient Corporation to the Federal Communications Commission, June 

6, 2016 at 6, available at https://ecfsapi.fcc.gov/file/60002098245.pdf. (‘‘We already have consent to autodial nine out of 10 of the Federal student loan borrowers whose loans we service 

today, . . ..’’) 11See Comments of Navient Corporation to the Federal Communications Commission, June 

6, 2016 at 6, available at https://ecfsapi.fcc.gov/file/60002098245.pdf. (‘‘We already have consent to autodial nine out of 10 of the Federal student loan borrowers whose loans we service 

today, . . ..’’) 

about robocalls.6 The problem of unwanted robocalls is escalating: the FTC reported 

more than 2.2 million complaints about unwanted robocalls in 2015—over two and 

a half times as many complaints as there were in 2010.7 More than half of these 

calls occurred after the consumer had already requested that the company stop calling.8 Indeed, in the first four months of 2016, the complaint numbers have spiked 

again, increasing to an average of over 279,000 a month, which will produce a yearly rate of over 3.3 million complaints.9

So it seems that even though the litigation is increasing, and more fines and 

awards have been collected, these are still not sufficient to provide incentives to the 

calling industry to comply with consumers’ wishes to be free from these unwanted 

robocalls. 

Question 2. Throughout your written testimony, you highlight many negative instances of ‘‘robocalling,’’ many of which involve harassing telemarketing calls. I 

think we can all agree that we dislike telemarketing calls and that we would prefer 

that consumers not receive them. However, there can be uses for ‘‘robocalling’’ that 

can benefit consumers. For example, there are student loan providers and servicers 

in Nebraska who try to contact students who are at risk of defaulting on their student loans to help them rather than harass them. In your opinion, are there any 

times that robocalls should be permissible under the TCPA, such as where consumers might need or want to receive the call? 

Answer. Robocalls are entirely legal once the consumer has consented to receive 

them. 47 U.S.C. § 227(b)(1)(A). Moreover, according to the student loan servicing industry, over 90 percent of student loan debtors have consented to receive these 

calls.10 Student loan servicers wishing to call the debtors for whom they do not have 

consent should manually dial these consumers until they receive consent. If the 

servicing industry believes that the calls will be so helpful to consumers, then it is 

their job to reach out to them. However, they should do so in accordance with the 

TCPA. There is no inherent right for callers to use autodialers or prerecorded voice 

messages. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. STEVE DAINES TO

MARGOT SAUNDERS

Question 1. Today’s students are graduating college with more debt than ever. 

Some of them go out into the workforce and forget about their student loans, or ignore them because they think they can’t afford the payments. Because of the TCPA, 

loan servicing companies are not able to call the students to help them with a payment plan and unfortunately some end up defaulting on their loans. When the students default on their loans and ask ‘‘why didn’t someone call me’’—what can we 

tell them? Is there any middle ground that can be reached that allows us to help 

our students without opening up the flood gates for unwanted calls? 

Answer. Robocalls are entirely legal once the consumer has consented to receive 

them. 47 U.S.C. § 227(b)(1)(A). Moreover, according to the student loan servicing industry, over 90 percent of student loan debtors have consented to receive these 

calls.11 Student loan servicers wishing to call the debtors for whom they do not have 

consent should manually dial these consumers until they receive consent. If the 

servicing industry believes that the calls will be so helpful to consumers, then it is 

there job to reach out to them. However, these should do so in accordance with the 

TCPA. There is no inherent right for callers to use autodialers or prerecorded voice 

messages. 

105 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. MARIA CANTWELL TO

MARGOT SAUNDERS

Question. True Blue, a Tacoma, Washington based company is focused on getting 

blue collar workers back to work. Its matches unskilled and underemployed people 

seeking work with local businesses that have short medium and long term job opportunities. 

If the worker consents in writing, True Blue makes the match by sending a text 

message called a ‘‘work alert’’ to the worker giving the details of the job offer including wage, location and expected time commitment. The worker texts back yes or no 

depending on his or her interest. 

If the worker has not consented in writing to receiving ‘‘work alerts’’ he or she 

must show up at a worker recruiting center at 5 a.m. and wait for work. 

In 2014, a former client brought suit on behalf of a class of workers claiming that 

True Blue had been texting him and others without permission. 

An examination of their ‘‘work alert’’ notification system revealed that due to recordkeeping error, several hundred workers that had opted out of the ‘‘work alert’’ 

text notifications system continued to receive text messages. 

The lawsuit is still pending. But because the Telephone Consumers Protection Act 

is a strict liability statue which mandates $500 per text message violation, True 

Blue is facing a decision that could put potentially put it out of business. 

There are whole classes of stakeholders such as schools, non-profit social service 

agencies, medical offices, employment agencies, etc. . . that may reach out to their 

clients or customers using text messages or auto dialers to perform a service like 

remind them of medical appointments, inform them of job opportunities, pass on 

schedule information and give updates on available benefits or the status of applications. 

In some cases, these types of entities may run afoul of the Telephone Consumer 

Protection Act because of mere recordkeeping error. 

While this not desirable, it seems different than the type of harm that consumers 

experience when being bombarded with marketing materials from an entity trying 

to sell something. 

Making entities like this subject to large fines and court judgments doesn’t seem 

like the result we want. 

I don’t want to weaken consumer protections under Telephone Consumer Protection Act (TCPA) but I do want the law to direct the harshest penalties for the most 

egregious violations that impact consumers. 

Some state and Federal consumer protection laws have ‘‘good faith’’ or ‘‘bona fide 

error’’ exceptions. Is there a role for those types of exceptions to the TCPA without 

weakening consumer protection? If so how would should it be applied? 

Answer. I understand the frustration that one might feel if the facts of the case 

were as has been explained to you, and your recommendation for a good faith defense. But we investigated this case, and the allegations in the complaint are that 

the consumer was texted seven times a day for multiple days, that he repeatedly 

requested True Blue to stop the texts, but it refused. He even went into a branch 

location and was told they can’t stop the texts. 

Here is a record of the dates and times of the texts that the consumer received, 

after the consumer had repeatedly requested that they be stopped: 

Defendants continued to repeatedly text Plaintiff on his cellular telephone ending in 3379 again on May 5, 2014 (6:32 a.m., 9:20 a.m., 12:24 p.m., 3:30 p.m., 

4:28 p.m., 6:40 p.m., and 6:42 p.m.), May 6, 2014 (8:07 a.m., 8:15 a.m., 8:15 

a.m., 10:37 a.m., 11:03 a.m., 12:30 p.m., and 12:52 p.m.), May 7, 2014 (5:27 

a.m., and 1:23 p.m.), May 8, 2014 (6:15 a.m., 9:12 a.m., 2:50 p.m., 2:58 p.m., 

3:51 p.m., 3:52 p.m., and 4:09 p.m.), May 9, 2014 (5:32 a.m., 7:30 a.m., 8:32 

a.m., 11:20 a.m., 1:17 p.m., 1:19 p.m., and 3:10 p.m.), May 10, 2014 (1:44 p.m.), 

May 12, 2014 (5:43 a.m., 8:29 a.m., 10:55 a.m., 1:23 p.m., 2:01 p.m., 2:14 p.m., 

and 5:09 p.m.), May 13, 2014 (9:53 a.m., 9:55 a.m., 1:53 p.m., and 3:34 p.m.), 

May 14, 2014 (8:38 a.m., 8:38 a.m., and 9:00 a.m.), May 15, 2014 (8:12 a.m., 

8:28 a.m., 8:29 a.m., 9:32 a.m., 9:49 a.m., and 9:52 a.m.), and May 16, 2014 

(9:05 a.m., 9:57 a.m., 10 a.m., and 4:16 p.m.). 

The problem is that it is simply too inexpensive to make these calls and texts. 

This means that any human intervention, such as going into the system to cancel 

the calls or texts to a particular phone number costs more money than simply continuing the calls or texts, even when the person receiving the calls has repeatedly 

asked for them to be stopped. The point of the strict liability standard in the TCPA 

is to create incentives for businesses to pay attention to these issues, so that the 

unwanted calls and texts are stopped. 

106 

1The Commerce Clause justifies Congress in exercising legislative power over certain state 

and local activities under Article 1, Section 8, Clause 3 of the U.S. Constitution. The Supreme 

Court’s landmark decision in United States v. Lopez, 514 U.S. 549, (1995), definitively identifies 

and describes ‘‘three broad categories of activity that Congress may regulate under its commerce 

power.’’ Lopez, 514 U.S. at 558. (channels of interstate commerce; instrumentalities of interstate 

commerce, or persons or things in interstate commerce; and those activities having a substantial 

relation to interstate commerce). 

As supported by a number of Supreme Court decisions, ‘‘Congressional power to regulate the 

channels and instrumentalities of commerce includes the power to prohibit their use for harmful 

purposes, even if the targeted harm itself occurs outside the flow of commerce and is purely local 

in nature.’’ United States v. Ballinger, 395 F.3d 1218, 1226 (11th Cir. 2005) (emphasis added); see e.g., Lopez, 514 U.S. at 558–59. For example, see United States v. Robinson, 62 F. 3d 234, 

(8th Cir. 1995), where the Eighth Circuit held that the Federal carjacking statute, 18 U.S.C. 

§ 2119, dealt with an ‘‘item of interstate commerce,’’ and thus did not require a separate showing 

of effect on interstate commerce. Robinson, 62 F. 3d at 236–37. 

Courts have interpreted ‘‘instrumentalities of interstate commerce’’ to include things like the 

telephone, the Internet, and the U.S. Postal Service. See e.g., United States v. Pipkins, 378 F.3d 

1281, 1295 (11th Cir. 2004) (naming ‘‘pagers, telephones, and mobile phones’’ as instrumentalities of interstate commerce); United States v. Panfil, 338 F.3d 1299, 1300 (11th Cir. 2003) (referring to the Internet as an ‘‘instrument of interstate commerce’’); American Library Ass’n v. 

Pataki, 969 F. Supp. 160, 173 (S.D.N.Y. 1997) (analyzing the interstate and economic nature 

of the Internet and concluding that it is an instrumentality of interstate commerce); United 

States v. Riccardelli, 794 F.2d 829, 831 (2nd Cir. 1986) (explaining that ‘‘[u]se of the United 

States mails, whether to mail a letter across the street or across the nation’’ has historically 

been recognized as an ‘‘exclusively Federal instrumentality’’). Under the second category of activity that Congress may regulate under its commerce power, a telephone or the Internet is still 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. AMY KLOBUCHAR TO

MARGOT SAUNDERS

Question. Ms. Saunders, I have been very active in pushing the FCC and carriers 

to identify solutions and aggressively move forward to end the problems with rural 

call completion. I am glad to have a commitment from Chairman Thune to markup 

my Improving Rural Call Quality and Reliability Act of 2015 soon. I find a striking 

similarity between the bad actors placing robocalls and the bad actors that are not 

completing calls to rural areas. In both cases fraudsters are constantly finding new 

ways to exploit consumers. Our laws must ensure consumers’ phones ring when 

they need it and silent when they want privacy. What policies or actions do you believe will be the most effective in getting ahead of fraudsters? 

Answer. At this point, we think the most important step that can be taken is to 

require the telephone companies to employ technologies that eliminate caller idspoofing. That single requirement—if sufficiently well enforced—will, we believe 

stop much of the fraud occurring over the telephone lines. There are good bills pending in both the House and the Senate that we believe will accomplish this. Senator 

Schumer’s bill: S. 3026—ROBOCOP Act is the Senate bill and H.R. 4932 is the 

equivalent House bill on the same subject. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. CORY BOOKER TO

MARGOT SAUNDERS

Question 1. As you know, debt collection negatively impacts many Americans who 

are already financially insecure. It is incumbent upon Congress to ensure that there 

are clear rules governing the practice of debt collection. Earlier this year, Senator 

Mike Lee and I introduced the Stop Debt Collection Abuse Act, which clarifies that 

debt buyers are debt collectors; expands the definition of consumer debt; and limits 

egregious fees. In addition, reports show that thirty-party debt collectors collecting 

on behalf of local and state governments have in some cases violated the Fair Debt 

Collection Practices Act. Our bill would address this issue by examining the use of 

debt collectors by local and state governments. 

While the Stop Debt Collection Abuse Act takes some steps at the Federal level 

to directly protect consumers, I am concerned that practices at the state and local 

level are making the situation worse. Can Congress address these problems at the 

state and local level? If so, how? 

Answer. We very much appreciate your introduction of the Stop Debt Collection 

Abuse Act, and we share your concern about abuses at the state and local level. We 

see no legal reason why the language in your bill should not be made equally applicable to debts owed state and local governments. So long as the collectors of those 

state and local debts use the instrumentalities of commerce (telephone, the Internet 

or the U.S. Postal Service) to collect the debt, then it would be legal and constitutional for the Federal Government to regulate these activities.1

107 

recognized as an ‘‘instrumentality of interstate commerce’’ even if it is not used to communicate 

across state lines. Lopez 514 U.S. at 558. Accordingly, if instrumentalities of interstate commerce (such as the telephone, the internet, or the U.S. Postal Service) are used even purely 

intrastate by state and local debt collectors to collect debt owed to state and local governments, 

then the Federal Government could still constitutionally regulate such activities under the Stop 

Debt Collection Abuse Act. 

Question 2. Under pressure to tighten budgets, Congress has turned to debt collection as a way to regain lost revenue. In October, a provision was tucked into mustpass budget legislation that created a new exemption to the TCPA. This exemption 

allows debt collectors working on behalf of the Federal Government to contact individuals without their consent. What precedent does this set for debt collection by 

local and state governments? 

Answer. It does not set any precedent for the debt collection activities of debts 

owed to local and state governments. The Budget Act amendments only provided an 

exemption from the requirement for robocalls to cell phones to have consent for calls 

to collect debts owed to or guaranteed by the Federal Government. All other debt 

collection calls—whether owed for private debt or owed to state or local governments—are still subject to the requirements of the Telephone Consumer Protection 

Act that non-emergency calls robocalls to cell phones are only legal if the caller has 

consent to call the cell phone from the owner or the user of the cell phone. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

RICHARD LOVICH

Question 1. Would a concrete standard for revocation of consent in the TCPA regulations, as there is for the FDCPA, FCRA, and other banking laws, be helpful in 

reducing the types of contact intended to be prohibited by the TCPA? 

Answer. A clearly articulated standard for when consent is considered to have 

been revoked is sorely lacking in the current application of the TCPA. This goes 

hand in hand with a severely lacking definition of ‘‘prior express consent’’ itself. The 

less ambiguity in the statute, the less likely it will be for well-meaning entities such 

as health care providers to run afoul of the law. For example, currently if a number 

whose owner originally granted consent is transferred, the health care provider attempting to fulfill its statutory and regulatory duty to follow up with patients, remind them of appointments and follow-ups, and provide information on prescription 

readiness, will be completely unaware of that transfer. The FCC’s current interpretation allows the caller only one call to the reassigned number. Even if that call is 

not connected or if the information concerning transfer is not obtained, the next innocent call is actionable. 

Also, in order to clearly define when ‘‘prior express consent’’ is revoked, one must 

determine from whom it was originally obtained. Under the FCC’s 2015 TCPA decision, an incapacitated patient whose consent is obtained from a family member may 

have that consent revoked immediately upon his becoming capable of responding. 

This may not be the most opportune time for a care giver to obtain consent or inquire whether consent has been withdrawn, as the person is recovering from a serious condition. This is what makes healthcare providers and their related entities 

unique in this movement to clarify the TCPA. The healthcare context, the TCPA 

issues, and specifically the issue of consent is directly related to the ability of the 

patient to communicate. It is thus impacted by the health of the patient and the 

ability of the provider to provide adequate care. 

Concrete standards for both consent and revocation also allow the hospital to develop and articulate protocols to avoid running afoul of the law. Violation in this 

regard should have an intent component in order not to penalize otherwise innocent 

callers. As you may recall from my testimony, the Affordable Care Act requires providers to follow up with patients and provide adequate health information to cut 

down on readmissions. In addition, regulations applicable to charitable hospitals require communication of eligibility for rate discounts. These statutory and regulatory 

requirements cannot be effectively met without posing an unreasonable risk of liability for violation of the Act. 

With clear standards for revocation, the number of unwanted contacts will be significantly decreased as the hospital has absolutely no interest, either medically or 

economically, in contacting people it has not treated. Hospitals do not recruit people 

to be sick nor do they attempt to worsen health conditions in order to get more business. This again sets them apart from enterprises who use robocalls for the purposes the Act was originally targeting. 

108 

Question 2. Attorney General Zoeller and a number of other attorneys general 

sent a letter to this committee urging support for the HANGUP Act, arguing that 

it was necessary because, ‘‘As amended, the TCPA now permits citizens to be 

bombarded by unwanted and previously illegal robocalls to their cell phones if the 

calls are made pursuant to the collection of debt owed to or guaranteed by the 

United States.’’ Is that your understanding of what will necessarily be allowed as 

a result of the Federal Communications Commission’s implementation? 

Answer. The Bipartisan Budget Agreement of 2015 provision that allows the use 

of robocalls to collect debts owed to or guaranteed by the Federal Government illustrates the shortcomings of the TCPA as applied in the modern world. If it makes 

sense in the area of federally backed debt it makes even more sense in the 

healthcare sector where compliance with the TCPA as currently articulated is a tremendous financial burden that takes precious resources away from patient care. If 

Congress felt that it was important enough to protect Federal debt calls, is it even 

arguable that the health of Americans is equally if not more important? 

The provision provides for an economical and efficient way to communicate essential information to help citizens concerning their student loans, tax, and other Federal debt. Based on available data, the amendment should not create a significant 

number of additional calls along the lines being forecast by opposition groups. 

Information aids those affected. If the provision were expanded to health care providers and their related entities, the rights and needs of patients would be significantly increased and strengthened. 

Question 3. What are some of the benefits and challenges of moving forward with 

a mandatory reassigned numbers database? 

Answer. The benefits here are clear for callers who are statutorily mandated to 

make such calls and who face high penalties if they innocently call a number on 

which they previously obtained consent. 

Healthcare entities fulfilling their legal obligation to provide essential health related information to a patient are exposed to great liability when the patient from 

whom they obtained consent for cell phone communication no longer has the number assigned to them. There is currently no effective way for the health care provider community to know of the transfer. 

The regulatory scheme currently grants one free call attempt. If that call is unproductive in obtaining the information that the number has been reassigned, the patient the hospital is seeking to reach will be deprived of the essential information 

to maintain health. 

In addition to this direct negative patient impact, the current language of the 

statute and its regulatory interpretation is an open invitation to costly litigation. 

The person to whom a number is transferred has no legal obligation at any time 

to inform the hospital that the number has been transferred and that no consent 

has been granted post transfer. Because of the FCC’s decision, the recipient of the 

transferred number can continue to receive calls meant for patient care and information, not inform the hospital of the transfer, and sue for each call after the first 

one. 

The ability to reference a reassigned numbers database will help reduce the potential for caregivers to be exposed to TCPA liability for seeking to help patients. 

It is anticipated that privacy issues will be advocated by opponents to this solution. However, either the TCPA has to be amended and overhauled or an effective 

way for care givers to determine reassignment must be provided. Otherwise, the Act 

is nothing more than a full employment bill for the plaintiff’s bar. 

Question 4. Is there a helpful way to distinguish between random or sequential 

telemarketing calls and texts versus calls or texts to numbers originally provided 

by customers that have been subsequently reassigned? 

Answer. A simple approach is to require the caller to give notice that the call is 

for a legitimate purpose, much like the notice requirement under the FDCPA. The 

FDCPA provides language indicating that if you are not the debtor please disregard 

the call and that the purpose of the call is the collection of a debt. Adopting similar 

language for the TCPA would protect the consumer who receives a reassigned number to know immediately not take the call or delete the text. 

Question 5. Are texts less intrusive than phone calls? If so, would it make sense 

to have reduced penalties for text message violations of the TCPA in order to encourage contact through text messaging rather than phone calls? 

Answer. Like e-mails or paper mail, a text message can be completely ignored and 

easily deleted once the recipient determines it is of no interest or is not directed 

at them. They are read at the recipient’s convenience and are easily deleted. Thus 

any sanction for an innocently sent text in furtherance of the hospital’s duty to communicate with a patient should not be sanctioned. 

109 

Question 6. Are you aware of any negative consequences resulting from the Commission’s 2015 Omnibus Declaratory ruling, including the movement of call centers 

overseas? 

Answer. The negative aspect of the ruling is in its failure to take significant action to protect healthcare providers. The request was to exempt healthcare related 

entities from the reach of the Act. Instead the ruling failed to do so, only providing 

a very narrow exemption that is difficult to meet and may exclude certain 

healthcare related entities. Thus having been requested to make the change and 

failing to do so, the FCC has handed the plaintiff’s bar another weapon. That FCC 

refusal to exempt the healthcare community endorses frivolous lawsuits against 

healthcare providers. It establishes that hospitals are to be lumped together with 

the worst element of telemarketing. 

In addition, the overbroad interpretation of ‘‘automatic telephone dialing system,’’ 

failure to address the need for a more concrete definition of ‘‘prior express consent,’’ 

unworkable standard for addressing calls to reassigned numbers, lack of an intent 

element to acts violating the Act, and the clear lack of investment by the FCC in 

the needs of the healthcare community are all negative consequences of the ruling. 

Healthcare entities continue to run the risk of costly litigation in fulfillment of 

their statutory and regulatory duties. This imposes a tremendous economic burden 

on the healthcare industry as time, money and energy has to be expended whether 

the litigation is valid or not. Instead of being able to take advantage of technology, 

hospitals must make decisions as to how to allocate resources. Every dollar spent, 

every minute expended in defending frivilous lawsuits or in not using autodialers, 

is a dollar and a minute not spent on patient care. Those dollars add up to thousands if not millions and those minutes trun into hours, weeks, days and longer. 

The ruling also failed to require the recipient of a reassigned number to notify 

the caller of the reassignment. This results in the recipient being able to simply 

allow the caller to continue to call, not tell them of the reassignment, and then sue 

on each violation for each call after the first. 

Question 7. Is there a database on which callers can reasonably rely that identifies numbers that have been reassigned? 

Answer. We are not aware of any such databases. 

Question 8. Why can’t callers simply rely on consent? 

Answer. ‘‘Prior express consent’’ has never been defined, and no uniform standard 

has been developed. As applied to health care providers, consent seems like an easy 

thing to obtain but as with all areas of human endeavor circumstances arise making 

it difficult. 

One issue is who can provide consent. According to the FCC, if a patient is incapacitated and his family member provides consent, such consent is revoked upon the 

patient’s return to capacity. This recovery may not occur while the patient is still 

in the hospital. 

A second issue involvesthe multilingual American patient population. Does the 

consent form have to be printed in all available languages? Does an interpreter need 

be provided to explain the consent form so as to avoid but not eliminate the 

possiblity of a lawsuit down the line over whether the consenting party understood 

the import of the consent. 

Most importantly, because we rely on the use of language, there will always be 

opportunistic attorneys who will prey upon innocent companies whose language can 

be manipulated, and what language cannot be manipulated? If the statute provided 

consent language that was above reproach, and provided a mechanism whereby consent could be concretely established, then the caller could rely upon the consent 

given. 

Question 9. Are you aware of any small businesses that have gone out of business 

as a result of the legal fees or settlements associated with a TCPA litigation? In 

the recent CFPB Notice of Proposed rulemaking for arbitration, the CFPB appears 

to recognize the challenges small businesses have when faced with TCPA related 

class action litigation. In the rule they note, ‘‘. . . the Bureau recognizes the concern 

expressed by SERs, among others, that particular statutes may create the possibility of disproportionate damages awards.’’ Do you have similar concerns about how 

the statutory damages associated with TCPA litigation can threaten small businesses? 

Answer. The healthcare industry has its small businesses just like most areas of 

endeavor. In healthcare, the small community hospital is often the lifeblood for care 

in rural and small communities not served by a large metropolitan medical center 

or an academic medical center attached to a large university. The struggles of the 

small community hospitals, with the lack of bargaining power with large commercial 

insurance companies, and large governmental payor populations, are very real. The 

110 

difference between providing necessary healthcare to a rural community and shutting the doors of the hospital is often a very thin line. 

Add to the these issues an obligation to contact each patient in follow up to decrease readmissions, provide eligibility information for charitable and discount programs (both areas required by statute), while at the same time being prohibited 

from using technology to efficiently perform these tasks, and you are left with a hospital that has to decide to maintain the nurse/patient ratio or to hire boiler rooms 

full of phone callers in order to deliver information. Resources are finite, and each 

telephone staff member who performs no other task represents an additional level 

of lost patient care. The economic stress is tragic mostly because it is fully avoidable. 

Disproportionate damage awards are also devastating to small hospitals. The hospital has no need or economic incentive to make telemarketing calls. Thus its calls 

are all patient education and information-driven. The hospital fulfilling its statutory 

and regulatory duty innocently calls a reassigned number more than once, where 

the holder of the number (under no obligation to inform the hospital of the reassignment) receives more than one call and sues. This is not justice and is a far cry from 

the original purposes of the Act. 

Not all robocalls are annoying and intrusive telemarketing calls. Health care related calls go to the essence of the patient’s well being. Resources devoted just to 

defending such lawsuits are devastating to the care giver community. 

What we will see, at a time where healthcare is at the forefront of the national 

agenda, is a consolidation and loss of hospital facilities, causing greater scarcity of 

our most precious resource-the ability to care for those in need. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. ROY BLUNT TO

RICHARD LOVICH

Question 1. Healthcare represents roughly one quarter of our Nation’s economy 

but is unique in a number of ways both due to its bifurcated regulation and reimbursement but also in its personal impact on consumers. 

Given those facts, how is the FCC gathering information from the impacted 

healthcare patients and providers to inform its regulatory processes? 

Answer. We are not aware of any efforts by the FCC to gather such information 

in the TCPA context. 

Question 2. Further, how concerned is the FCC’s leadership that rigorous regulation of such specific tools like auto-dialing will inhibit the ability of healthcare providers to reach out to their patients, assist patients in accessing care and improve 

patient adherence to care plans—and in a less intrusive manner that most patients 

prefer? 

Answer. FCC leadership seems completely unconcerned about how the regulation 

of specific tools negatively impacts the patient. Instead, the approach taken by the 

FCC has been to lump healthcare related entities into the same basket as telemarketers for many aspects of the TCPA. Heart transplant surgeons are apparently 

no better than scam telemarketers. 

The Bipartisan Budget Agreement of 2015 exempted the collection of Federal debt 

from the TCPA and shows a logical and rational approach to this issue. Federal debt 

collection is immensly important, and so is healthcare. The damage awards, class 

action suits, defense costs, and untold thousands of hours of productive time stolen 

from patients and devoted to the nonsensical pursuit of avoiding a frivolous TCPA 

claim cannot be the right outcome. Instead, the TCPA should be modernized, consistent with HIPAA, to allow consumers to receive necessary and vital non-telemarketing health care communications. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

MONICA S. DESAI

Question 1. Would a concrete standard for revocation of consent in the TCPA regulations, as there is for the FDCPA, FCRA, and other banking laws, be helpful in 

reducing the types of contact intended to be prohibited by the TCPA? 

Answer. Yes. A clear, concrete standard for revocation benefits consumers, by providing them with an effective means for reducing unwanted calls and messages, and 

benefits businesses, by allowing uniformity and consistency in effectuating opt outs. 

However, the current standard for revocation set out by the Federal Communications Commission (FCC) is unworkable and an invitation to set litigation traps. In 

the 2015 TCPA Order, the FCC stated that a person may revoke consent under the 

111 

1 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG 

Docket No. 02–278, Report and Order, FCC 15–72, ¶¶ 47, 64, n. 233 (2015) (2015 TCPA Order). 2 Id. ¶ 47. 3See ACA Int’l et al., v. FCC et al., No. 15–1211, Brief for Respondents, at 64 n. 16 (D.C. 

Cir., filed Jan. 15, 2016) (Government Respondents in the appeal of the 2015 TCPA Order stated 

that the FCC’s ruling ‘‘did not address whether contracting parties can select a particular revocation procedure by mutual agreement’’). 4See 47 U.S.C. § 227(b); Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Notice of Proposed Rulemaking, CG Docket No. 02–278, FCC 16–57, ¶ 1 

(May 6, 2016). 5 2015 TCPA Order ¶ 85. 6 By one estimate, roughly 37 million telephone numbers are reassigned each year. Alyssa 

Abkowitz, Wrong Number? Blame Companies’ Recycling, The Wall Street Journal (Dec. 1, 2011). 7See 47 U.S.C. § 227(b)(1). 

TCPA by any means that is ‘‘reasonable’’ considering the ‘‘totality of the facts and 

circumstances,’’ including ‘‘orally or in writing’’ and at ‘‘in-store’’ locations.1 Further, 

a caller ‘‘may not limit the manner in which revocation may occur.’’ 2 Callers need 

to be able to rely on uniform revocation procedures, not an open-ended, case-by-case 

approach. But the FCC has provided no means for callers and consumers to be certain that revocation will be effective. For example, in his dissent from the 2015 

TCPA Order, Commissioner Pai questioned how any retail business could comply 

with the FCC’s revocation standard, asking: ‘‘Would a harried cashier at McDonald’s 

have to be trained in the nuances of customer consent for TCPA purposes? . . . 

Could a customer simply walk up to a McDonald’s counter, provide his contact information and a summary ‘I’m not lovin it,’ and put the onus on the company? The 

prospects make one grimace.’’ A concrete standard that helps ensure effective revocation would remove the uncertainty created by the FCC and benefit consumers 

and businesses.3

Question 2. Attorney General Zoeller and a number of other attorneys general 

sent a letter to this committee urging support for the HANGUP Act, arguing that 

it was necessary because, ‘‘As amended, the TCPA now permits citizens to be 

bombarded by unwanted and previously illegal robocalls to their cell phones if the 

calls are made pursuant to the collection of debt owed to or guaranteed by the 

United States.’’ Is that your understanding of what will necessarily be allowed as 

a result of the Federal Communications Commission’s implementation? 

Answer. No. The FCC has proposed specific rules to limit the number and type 

of calls that can be made pursuant to the exemption for calls ‘‘made solely to collect 

a debt owed to or guaranteed by the United States.’’ 4

Question 3. What are some of the benefits and challenges of moving forward with 

a mandatory reassigned numbers database? 

Answer. Under the FCC’s interpretation of ‘‘called party,’’ it is literally impossible 

to comply with the TCPA. The FCC acknowledged in the 2015 TCPA Order that 

‘‘callers lack guaranteed methods to discover all reassignments immediately after 

they occur.’’ 5 As a result, and because telephone numbers are reassigned so frequently,6 companies face significant risk under the TCPA as it has been interpreted 

by the FCC to impose liability for calls to reassigned numbers even where the company had no knowledge of the reassignment. An accurate reassigned number database would allow companies to determine whether a number in the database has 

been reassigned, thereby preventing unwanted calls to the new holder of the number. There should be a TCPA safe harbor associated with the use of such a database. 

The database must be mandatory for all carriers. There are currently voluntary 

databases in which carriers may choose whether to submit number reassignment information, and those databases are incomplete and sometimes inaccurate. Implementing a reassigned number database that includes all carriers may require Congressional action. 

Question 4. Is there a helpful way to distinguish between random or sequential 

telemarketing calls and texts versus calls or texts to numbers originally provided 

by customers that have been subsequently reassigned? 

Answer. Congress did, in fact, distinguish between random or sequential telemarketing calls—prohibiting them through the TCPA—and calls made in good faith 

to a number that has been reassigned—by providing a specific exemption from 

TCPA liability for calls made with the prior express consent of the called party.7

Congress intended this distinction to have meaning—otherwise it would have not 

provided for such an exemption. I am not aware of any existing reassigned number 

database or other service that captures all reassignments. I think that it is critical 

for purposes of the discussion about TCPA reform, though, to distinguish the ‘bad 

actors’ (such as scammers making millions of illegal robocalls) from compliance-foVerDate Nov 24 2008 11:37 Feb 14, 2017 Jkt 075679 PO 00000 Frm 00115 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\24146.TXT JACKIE
112 

8 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG 

Docket No. 02–278, Report and Order, 18 FCC Rcd 14014 ¶ 165 (2003). 9 2015 TCPA Order ¶ 85. 10 2015 TCPA Order ¶ 86; see also Letter from Richard L. Fruchterman, Associate General 

Counsel to Neustar, to Marlene H. Dortch, Secretary, FCC in CG Docket No. 02–278, at 1 

(Feb. 5, 2015). 11 2015 TCPA Order ¶¶ 89–93. 12 47 U.S.C. § 227(a)(1). Under the statute, an ATDS is defined as equipment with a specific 

‘‘capacity’’—the ‘‘capacity’’ to ‘‘store or produce telephone numbers to be called, using and random or sequential number generator; and . . . to dial such numbers.’’ Id. The FCC found in 

the 2015 TCPA Order that ‘‘capacity’’ included the ‘‘potential ability’’ of the equipment, such that 

(as discussed above), any equipment for which there is ‘‘more than a theoretical potential that 

cused companies that are trying to send their customers timely communications 

that they want and have requested, but are getting penalized for doing so when the 

number has been reassigned without their knowledge. The best way to protect callers who are making calls in good faith, and to prevent the chilling of such calls so 

that consumers can keep receiving the calls they expect to receive, is to interpret 

‘‘called party’’ as Congress must have intended—as ‘‘expected’’ or ‘‘intended’’ recipient. 

Question 5. Are texts less intrusive than phone calls? If so, would it make sense 

to have reduced penalties for text message violations of the TCPA in order to encourage contact through text messaging rather than phone calls? 

Answer. Yes—text messages are less intrusive than phone calls. Consumers can 

choose when and whether to respond. Consumers are able to block texts from specific senders easily, and can easily delete texts. Text messages do not ‘‘interrupt’’ 

conversations or meals. Text messages do not ‘‘tie up’’ phone lines. Text messages 

are often part of a ‘‘bucket’’ plan. 

By its explicit text, the TCPA does not apply to text messaging—it only applies 

to ‘‘calls’’. However, the FCC has found that ‘‘calls’’ under the TCPA refers to both 

voice calls and to text messages.8

In the first instance, Congress could make clear that the TCPA is only applicable 

to calls, not to text messages, consistent with the statute as it is written. 

Another approach would be to provide for reduced damages for text messages sent 

without consent of the party receiving the text. And, Congress could eliminate strict 

liability for strict liability for text messages sent without the consent of the recipient. 

Question 6. Are you aware of any negative consequences resulting from the Commission’s 2015 Omnibus Declaratory ruling, including the movement of call centers 

overseas? 

Answer. Companies face substantial, even potentially ruinous liability as a result 

of the FCC’s interpretations of the TCPA, particularly with respect to the agency’s 

treatment of reassigned numbers and ATDS equipment. I have heard anecdotally 

that more and more companies are considering moving call centers overseas, so that 

manually dialed calls can be made at less expense. 

Question 7. Is there a database on which callers can reasonably rely that identifies numbers that have been reassigned? 

Answer. No. As noted above, the FCC acknowledged that ‘‘callers lack guaranteed 

methods to discover all reassignments immediately after they occur.’’ 9 The FCC 

stated that ‘‘at least one database can help determine whether a number has been 

reassigned;’’ however, the leading database provider stated in the record that it is 

‘‘not aware of any authoritative telecommunications database that links all consumer names with their telephone numbers.’’ 10 This underscores the importance of 

creating a comprehensive reassigned number database. 

Question 8. What is the most difficult challenge facing your clients with respect 

to TCPA compliance? 

Answer. The lack of any guaranteed means of determining whether a number has 

been reassigned is the most difficult aspect of TCPA compliance for the companies 

that I have worked with. The FCC found in the 2015 TCPA Order that after a caller 

makes one attempt to call or text a number that has been reassigned, the caller is 

liable for any subsequent calls, even if the caller is completely unaware that the 

number was reassigned.11 As a result, companies face significant, even ruinous liability for a problem that they simply cannot control because there is no guaranteed 

means to learn of number reassignments. 

The FCC’s boundless interpretation of the types of calling equipment regulated by 

the TCPA—‘‘automatic telephone dialing systems’’ (‘‘ATDS’’)—has also created significant compliance challenges for companies. Although ATDS is specifically defined 

in the statute,12 the FCC found in the 2015 TCPA Order that any equipment for 

113 

the equipment could be modified to satisfy the [statutory] definition’’ is also an ATDS. 2015 

TCPA Order ¶ 19. This decision is contrary to the statute and has created significant compliance 

challenges for industry, and Congress should clarify, consistent with the statute, that ‘‘capacity’’ 

in the definition of an ATDS is limited to the equipment’s ‘‘present’’ or ‘‘current’’ ability. 13 2015 TCPA Order ¶ 18. 14 2015 TCPA Order ¶ 18. 15 ACA Int’l v. FCC, No. 15–1211, Brief of Amicus Curiae Communication Innovators In Support of Petitioners, at 15 (filed Dec. 2, 2015). 16 CFPB, CFPB Mobile Financial Services: A summary of comments from the public on opportunities, challenges, and risks for the underserved., at 10. (Nov. 2015), available at http:// 

files.consumerfinance.gov/f/201511lcfpblmobile-financial-services.pdf. 17Federal Deposit Insurance Corporation, Qualitative Research for Mobile Financial Services 

for Underserved Consumers, at 19 (Oct. 30, 2015), available at https://www.fdic.gov/about/ 

comein/2015/come-in-2015.pdf. 18 Id. at 21. 19See Consumer Product Safety Commission, Recall Guidance, Recall Checklist (last visited 

May 16, 2016), available at http://www.cpsc.gov/en/Business—Manufacturing/Recall-Guidance/. 20See Prepared Statement of Edith Ramirez, Protecting Personal Consumer Information from 

Cyber Attacks and Data Breaches, Before the Senate Committee on Commerce, Science, and 

Transportation, 113th Cong., at 2 (Mar. 26, 2014) (explaining that the ‘‘FTC supports Federal 

legislation that would strengthen existing data security standards and require companies, in appropriate circumstances, to provide notification to consumers when there is a security breach’’), 

available at https://www.ftc.gov/system/files/documents/publiclstatements/294091/ramirez ldatalsecuritylorallstatementl03-26-2014.pdf. 

which there is ‘‘more than a theoretical potential that the equipment could be modified to satisfy the [statutory] definition’’ is also an ATDS.13 In other words, according to the FCC, if the equipment could be modified in the future to become an 

ATDS, then it is treated as if it is an ATDS—even if it has not been modified. 

Even more problematic, the only example provided by the FCC of telephone equipment that did not qualify as an ATDS is a ‘‘rotary-dial phone,’’ and the FCC even 

suggested that under its interpretation, a smartphone could be considered an 

ATDS.14 The FCC’s approach has left companies unsure about how to determine 

whether their calling equipment implicates the TCPA. As one amicus curiae in the 

appeal of the FCC’s 2015 TCPA Order noted, ‘‘[i]t is unclear who exactly would be 

qualified to conduct such an analysis—perhaps a philosopher?’’ 15 The FCC’s limitless interpretation is contrary to the specific definition in the statute, and offers little usable guidance for compliance. 

Question 9. Do any other regulators have a different stance on communicating 

with consumers via cellphone than the FCC? Have other regulators seen consumer 

benefits in communicating with consumers on their cellphone via text message? 

Answer. Yes. The following are just a few examples that I have found: 

• The Consumer Financial Protection Bureau (CFPB) has recognized, that especially for ‘‘economically vulnerable consumers,’’ tracking transactions through 

mobile technologies such as text messaging may help consumers ‘‘achieve their 

financial goals’’ and can ‘‘enhance access to safer, more affordable products and 

services in ways that can improve their economic lives.’’ 16

• The Federal Deposit Insurance Corporation (FDIC) released a request for comment that stated that text message alerts give consumers ‘‘Access to account information;’’ ‘‘Help[] consumers avoid fees;’’ and ‘‘Help[] monitor accounts for 

fraud.’’ 17 In fact, the FDIC research concluded that underbanked consumers 

may prefer texts to e-mails when receiving alerts because texts are ‘‘Faster,’’ 

‘‘Easier to receive,’’ ‘‘Attention grabbing,’’ and ‘‘Quicker and easier to digest.’’ 18

• The Consumer Product Safety Commission’s product safety ‘‘Recall Checklist’’ 

recommends that companies send ‘‘text messages to customers’’ as part of an 

‘‘effective and comprehensive product safety recall.’’ 19

• The Federal Trade Commission has emphasized the importance of proactive 

communications in connection with data breaches and is urging required notifications.20

Question 10. What action could Congress or the Federal Communications Commission take to help callers avoid costly discovery/litigation in cases where they have 

not violated TCPA? 

Answer. As discussed above, Congress should establish a reassigned number database accompanied by a TCPA safe harbor for callers that use the database. This safe 

harbor would, for example, exempt from liability calls made inadvertently to a number that had been reassigned if the caller had checked the database prior to making 

the call. This would help to reduce or eliminate TCPA risk associated with calls to 

114 

21See 2015 TCPA Order ¶¶ 89–93. 22 Alyssa Abkowitz, Wrong Number? Blame Companies’ Recycling, The Wall Street Journal 

(Dec. 1, 2011). 23See 2015 TCPA Order ¶ 85. 24 2015 TCPA Order ¶¶ 89–93. 25 2015 TCPA Order ¶ 72. 26 47 U.S.C. § 227(b)(3). 27 Alyssa Abkowitz, Wrong Number? Blame Companies’ Recycling, The Wall Street Journal 

(Dec. 1, 2011). 

reassigned numbers, which is a significant source of liability under the TCPA that 

callers have no means of effectively preventing. 

Question 11. Why can’t callers simply rely on consent? 

Answer. The FCC has made it impossible for callers to rely on consent. According 

to the FCC, when the consenting party relinquishes her telephone number, callers 

can be liable for any subsequent calls to that number after one attempted call or 

text, even if the caller was completely unaware of the reassignment.21 This is extremely problematic because almost 37 million telephone numbers are reassigned 

each year (which is roughly 101,000 reassignments per day).22 And, as the FCC has 

acknowledged, there is no guaranteed means for callers to discover a reassignment,23 meaning that companies may be unaware that the number provided to them 

by a customer was reassigned until the company is served with a lawsuit. Regardless, the FCC found in the 2015 TCPA Order that after a caller makes one attempt 

to call or text a number that has been reassigned, the caller is liable for any subsequent calls, even if the caller is completely unaware, and has no way of knowing, 

that the number was reassigned.24

This approach makes it impossible to rely on consent provided by customers. A 

workable approach that acknowledges that there is no guaranteed means to know 

if a number has been reassigned would be to find that callers that have the consent 

of the ‘‘intended’’ or ‘‘expected’’ recipient of the call or text are not liable under the 

TCPA. However, the FCC rejected this approach in the 2015 TCPA Order.25

Question 12. Are you aware of any small businesses that have gone out of business as a result of the legal fees or settlements associated with a TCPA litigation? 

Answer. I know that all businesses, and particularly small business, face significant compliance challenges as a result of the FCC’s interpretations of the TCPA, 

though I am not personally aware of any small businesses that have gone out of 

business specifically as a result of TCPA litigation. 

Question 13. In the recent CFPB Notice of Proposed rulemaking for arbitration, 

the CFPB appears to recognize the challenges small businesses have when faced 

with TCPA related class action litigation. In the rule they note, ‘‘. . . the Bureau 

recognizes the concern expressed by SERs, among others, that particular statutes 

may create the possibility of disproportionate damages awards.’’ Do you have similar 

concerns about how the statutory damages associated with TCPA litigation can 

threaten small businesses? 

Answer. Yes. Under the TCPA, there is strict liability for each call made in violation with no limit on total damages. The FCC has determined that text messages 

are ‘‘calls’’ subject to TCPA damages. As a result, every single call made or text message sent by a business could result in $500 to $1,500 in damages, even for innocent 

conduct such as inadvertently making a call or sending a text to a reassigned number.26 Considering that almost 37 million telephone numbers are reassigned each 

year,27 and there is no way for companies to know whether a number has been reassigned, there is certainly a concern that a small business could incur significant, 

even ruinous liability for unintentional TCPA violations. Indeed, this concern is 

greater for small businesses than larger companies, because small businesses may 

not be able to afford the teams of lawyers and reassigned number database services 

that large companies use to help mitigate risk under the TCPA. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. DEB FISCHER TO

MONICA S. DESAI

Question. The FCC’s 2015 order for TCPA reassigned numbers allows one call 

across an entire enterprise, even if it has multiple subsidiaries, before a caller can 

be liable for contacting a consumer. This is the case even though there is a no reassigned number list available to check, and the caller will often have no knowledge 

that a numbers has been reassigned. Is there a reason the caller should not be required to have ‘‘actual knowledge’’ that the called number is not that of the initial 

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28 2015 TCPA Order ¶ 72. 29 2015 TCPA Order ¶ 85. 30See 2015 TCPA Order ¶ 86. 31See 47 U.S.C. § 227(b)(1)(A). 32See 47 U.S.C. § 227(b)(1)(A). 33The FCC further determined that ‘‘called party’’ means the ‘‘current subscriber’’ or the ‘‘nonsubscriber customary user of the phone.’’ 2015 TCPA Order ¶ 72. 34 2015 TCPA Order ¶ 85. 

person? What reasonable means can a caller take to ensure a number has or has 

not been assigned? 

Answer. ‘‘Actual knowledge’’ should be the standard before TCPA liability is imposed for a wrong number call. The FCC’s finding that, after one unanswered call 

or text to a particular number, the caller should assume that the number has been 

reassigned, is absurd. Specifically, the FCC found that companies can be liable for 

calls or texts to reassigned numbers even if they are unaware that the number has 

been reassigned, and further that after one attempt to call or text a reassigned 

number, whether or not the call or text ‘‘yield[s] actual knowledge of reassignment, 

. . . the caller [has] constructive knowledge’’ that the number has been reassigned.28 But the FCC’s finding fails to acknowledge that there are myriad reasons 

why a call or text may be unanswered other than a number reassignment, for example: the recipient of the call may be busy; the ringer may be off; the power may be 

out or the phone’s battery may be dead; or the recipient may not have a voice-mail 

set up or may use the default message (typically an automated reading of the number), among other possibilities. 

The FCC’s finding also fails to recognize the agency’s own acknowledgment that, 

in fact, ‘‘callers lack guaranteed methods to discover all reassignments immediately 

after they occur.’’ 29 The current databases that can help determine whether a number has been reassigned are incomplete, and can be inaccurate. And the ‘‘options’’ 

that the FCC suggested for learning about reassigned numbers—such as periodically sending an e-mail or mail to the consumer check to make sure that the number 

has not been reassigned—will not enable callers to discover all reassignments, and 

could be annoying to consumers.30

The best solution to these problems would be for Congress or the FCC to clarify 

that the ‘‘called party’’ under the TCPA refers to the ‘‘intended’’ or ‘‘expected’’ recipient of the call.31 Defining ‘‘called party’’ as ‘‘intended recipient’’ gives meaning to 

the statutory exemption for calls made with the consent of the called party. And, 

critically, the ‘‘intended recipient’’ approach would not give callers free reign to 

make calls to reassigned numbers—once a caller has actual knowledge that a number has been reassigned, then the caller no longer has consent to call the number 

and must stop calling. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. STEVE DAINES TO

MONICA S. DESAI

Question. We heard at the hearing about excessive litigation, uncertainty, and enforcement challenges businesses and governments face as a result of today’s application of the TCPA. How can Congress act to update the TCPA to better target the 

real bad actors and relieve legitimate businesses from the burdens they face today, 

while still protecting consumers? 

Answer. There are several actions that Congress could take to lessen the impact 

of the TCPA for legitimate businesses and maintain or even improve protections for 

consumers. 

First, Congress should emphasize that when it provided an exemption for calls 

made with the prior express consent of the called party, it did not intend for that 

exemption to be illusory, and should clarify that the ‘‘called party’’ under the TCPA 

refers to the ‘‘intended’’ or ‘‘expected’’ recipient of the call.32 Companies are frequently sued under the TCPA when they call a number provided to them by a customer but that number has since been reassigned without the caller’s knowledge. 

Problematically, the FCC has interpreted the TCPA to impose liability for calls to 

reassigned numbers even where the caller had no knowledge of the reassignment.33

This finding fails to recognize the FCC’s own acknowledgment that ‘‘callers lack 

guaranteed methods to discover all reassignments immediately after they occur.’’ 34

Congress should therefore clarify that ‘‘called party’’ means ‘‘intended recipient,’’ 

which would provide an opportunity for callers to learn that a number has been reassigned before they are subject to liability under the TCPA. Critically, this approach would not give callers free reign to make calls to reassigned numbers—once 

116 

35 Id. 36See 47 U.S.C. § 227(a)(1). 37 2015 TCPA Order ¶ 18. 38 2015 TCPA Order ¶¶ 18, 21. 39See 47 U.S.C. § 227(a)(1). 

a caller is aware that a number has been reassigned, then the caller no longer has 

consent to call the number and must stop calling. 

Second, Congress should establish a database that enables callers to identify 

numbers that have been reassigned. As the FCC has acknowledged, callers lack 

guaranteed means of discovering a number reassignment.35 Congress should also 

provide a safe harbor that excuses inadvertent calls to reassigned numbers if the 

caller makes active use of the database. This solution would provide relief to legitimate businesses and reduce the number of unwanted calls received by consumers. 

Third, Congress should affirm that the TCPA’s restriction on the use of ‘‘automatic telephone dialing systems’’ (ATDS) only applies to ATDS equipment as it is 

defined in the statute.36 Although ‘‘ATDS’’ is specifically defined in the statute, the 

FCC found that any equipment for which there is ‘‘more than a theoretical potential 

that the equipment could be modified to satisfy the [statutory] definition’’ is also an 

ATDS.37 The only example that the FCC provided of equipment that would not be 

considered an ATDS under this standard is a ‘‘rotary-dial phone,’’ and the FCC even 

indicated that a smartphone would be subject to the TCPA under its interpretation.38 This limitless interpretation is contrary to the specific definition provided by 

Congress in the statute.39 Congress should affirm that the TCPA’s restriction on the 

use of ATDS equipment only applies to ATDS equipment as it is defined in the statute. 

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