Telephone Consumer Protection Act
As consumers increasingly rely on mobile devices for their everyday needs, marketers and other advertisers need to reach them via text or call. Text messages have outpaced emails as 95% of texts are read in ninety seconds or less. Sending text messages to consumers is an effective way to drive engagement and ultimately make sales. However, companies may have had to been more mindful of the law when marketing like this to consumers due to the Telephone Consumer Protection Act (TCPA).
What is the TCPA?
The Telephone Consumer Protection Act of 1991 (TCPA) is a government law that controls how businesses use telemarketing strategies like text messaging and pre-recorded voice communications. The TCPA aims to reduce the intrusiveness of some uncontrolled telemarketing communications made without prior consent. The law often requires consumers to express consent to receiving soliciting messages and provides a right of action for TCPA violations.
Telemarketing calls and automatic telephone dialing systems are prohibited under the Telephone Consumer Protection Act, both of which have contributed to a rise in nuisance calls to American customers. Furthermore, it makes it mandatory for businesses to keep their own organization-specific "do not call" lists to avoid making unwanted calls. Fines may be imposed if the rules of the regulation are not followed, and sometimes if a single company has been shown to perpetrate violations of the TCPA, class actions may be started by a few of those people on behalf of a much larger "class" of people who have had the same experience.
The TCPA has resulted in a flood of class-action lawsuits. According to one study, the number of TCPA cases has risen from five in 2002 to 4,392 in 2017. Before a TCPA class action is filed, there must be a valid underlying TCPA claim.
There have been several 7 and 8-figure class action settlements directly due to alleged violations of the TCPA in the past few years alone. Some of these cases include:
Depot and Atlantic Water and Air Settlement Claim
Home Depot and Atlantic Water and Air agreed to a $4,350,000 settlement on May 23, 2019. This was to resolve allegations that Atlantic Water and Air, acting on behalf of Home Depot, made telemarketing pre-recorded calls and used an automatic telephone dialer without first obtaining "prior express written consent." A total of $5,000 will be paid to the class, with identified plaintiffs getting a $7,500 incentive reward. Everyone who received phone calls from or on behalf of Home Depot or Atlantic Water and Air between October 16, 2013, and June 1, 2015, was included in the class.
West Shore Class Action Lawsuit Settlement
An active class action in 2022, this case revolves around a home renovation company, West Shore Home, which acquired consumer phone numbers through an online advertising campaign. Customers were allegedly called without their authorization, and prerecorded messages promoting a $5000 prize lottery were left on their answering machines. The phone numbers used in these calls and messages were on the national Do Not Call Registry.
The roughly $1,300,000 class action settlement would benefit those whose phone numbers were collected by the corporation as part of a Facebook advertising. It is also meant for those who received one or more pre-recorded calls two or more times in 12 months between November 15, 2016, and February 15, 2022. To be eligible for the settlement, consumers' phone numbers must have been registered with the National Do Not Call Registry for at least 30 days previous to receiving these calls.
Facebook Biometric Lawsuit Settlement
Facebook agreed to pay $550 million to resolve a class action brought under the Illinois Biometric Information Privacy Act (BIPA) and the TCPA, the largest-ever recovery in a privacy case. In this huge class action, plaintiffs contended the company's use of facial recognition software to help users "tag" persons in photographs violate Illinois law. The plaintiffs allege that the company received, used, and retained biometrically identifiers without first obtaining written consent, as well as failing to follow a retention plan for discarding biometric identifiers. On behalf of millions of Illinois subscribers, the plaintiffs sought tens of billions of dollars in statutory damages.
The lawsuit was settled after the US Supreme Court granted a certification of the class action. It sought a review of a decision by the US Court of Appeals for the Ninth Circuit that affirmed the district court's decision to allow the class action to proceed. The appeals court rejected the defendant's argument that the plaintiffs had no real injury due to the alleged BIPA violations and hence lacked standing to sue. The district court granted a motion for preliminary settlement approval in August 2020, and final approval was granted on January 14, 2021.
List of Top 10 TCPA Class Action Cases
1. Robert Kolinek filed a complaint in 2013, alleging TCPA violations and Walgreens agreed to pay $11 million to settle the case.
2. In January 2017, a jury in Greensboro, North Carolina awarded Dish Network $20.5 million in a class-action case filed under the Telephone Consumer Protection Act.
3. On December 13, 2018, the Northern District of California granted summary judgment to Phan, a TCPA defendant in a case involving confirmatory text messages from Agoda Company.
4. On March 20, 2019, Diane Rice-Redding, Ricky Coleman and Ken Johansen agreed to a $5 million settlement in federal court in Georgia to resolve charges that the Nationwide Mutual Insurance Company violated the Telephone Consumer Protection Act.
5. Allstate Insurance Company agreed to pay Abante Rooter and Plumbing Inc. $10.5 million to settle claims of TCPA violations on April 12, 2019.
6. Pet Health Inc., an animal health insurance firm, agreed to pay plaintiff Christopher Legg $5.5 million to settle a class-action lawsuit alleging that the corporation violated the Telephone Consumer Protection Act on May 8, 2019.
7. Checkers Drive-In Restaurant agreed to pay $3.5 million on May 28, 2019, to settle a statewide class action alleging that it violated the Telephone Consumer Protection Act by sending spam promotional text messages to customers after they had revoked consent.
8. Judge William G. Young of the United States District Court for the District of Massachusetts approved a $14 million settlement in a global class-action lawsuit against HelloFresh for alleged violations of the Telephone Consumer Protection Act (TCPA) on October 15, 2021.
9. A class action settlement of $38,500,000.00 was reached in a class action against National Grid in which the original class action lawsuit (which was settled) alleged that National Grid and its debt collectors made calls that violated TCPA restrictions with their annoying robocalls to collect unpaid bills. Members of this class settlement are those who received pre-recorded calls between March 9, 2011, and October 29, 2021.
10. Individuals who received a recorded message from 1564 Ventures Inc., between June 26, 2019, and November 1, 2019, received a $750,000 settlement from Divvydose to resolve charges that the drugstore violated the TCPA.
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