Earlier this month, the Fourth Circuit issued an unpublished opinion holding a debt collector’s autodialed calls to a residential landline with VoIP service violated the Telephone Consumer Protection Act due to the fact that the consumer was charged for each call.
In Lynn v. Monarch Recovery Management, Inc., No. 13-2358, 2014 U.S. App. LEXIS 18858, — Fed.Appx.— (4th Cir. Oct. 2, 2014), the Fourth Circuit affirmed a District Court of Maryland decision holding a debt collector violated the TCPA when it used an automatic telephone dialing system (ATDS) to call a residential line that had been converted to a Voice over Internet Protocol (VoIP) service for which the debtor was charged a monthly rate, along with a fee for incoming calls and for transmission of incoming calls.
Monarch placed 37 calls to Lynn’s number after he changed his residential line to a VoIP service provider. The calls were not made for an emergency purpose or with Lynn’s consent. In fact, Lynn advised Monarch on two occasions that calling his number cost him on a per-minute basis (after which he was called three more times).
Lynn prevailed on his claim that Monarch violated the “called charged” provision of the TCPA found in Section 227(b)(1)(A)(iii), which prohibits persons from making any call (other than for an emergency purpose or with the prior express consent of the called party) using an ATDS or artificial or prerecorded voice, to any number assigned to, among others, “any service for which the called party is charged for the call.”
Monarch argued before the district court, and again on appeal, that the calls to Lynn did not violate the TCPA because they were made to a residential line for a commercial purpose without any solicitation. Under this “residential line” provision of the TCPA (Section 227(b)(1)(B)), persons are prohibited from initiating any call to any residential line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is exempted by rule or order under Section 227(b)(2)(B). The FCC’s rule (Section 64.1200(a)(2)(iii)) exempts from TCPA liability any call made for a commercial purpose that does not include or introduce an unsolicited advertisement or constitute a telephone solicitation.
The Fourth Circuit rejected the debt collector’s argument and held Lynn’s TCPA claim fits squarely within the definition of the “called charged” prohibition. Although an unpublished decision that is nonbinding in the Fourth Circuit or anywhere else, this decision will certainly be considered in all jurisdictions.
Debt collectors and others in the financial services industry can expect more threats and lawsuits under the “called charged” section of the TCPA. As industry members cannot expect to know what type of phone service the intended recipient has or whether there are fees for incoming calls, using an ATDS to call a residential phone number is no longer immune from TCPA exposure.
While it is generally understood that the TCPA prohibits calls to cell phones using an ATDS or an artificial or prerecorded voice message, the Fourth Circuit’s decision could extend this prohibition to any telephone number where the consumer is charged for the call. What is troubling, and brings further uncertainty, is that the Court did not explain what types of calls fall within the “called charged” provision. Indeed, we expect to see arguments on behalf of consumers that there is always a charge for a call because no residential phone service (or other service) is free.