Caveat Vendor

Death, Debt Collection and the TCPA: FCC Urges Second Circuit to Limit Scope of Son-in-Law’s Consent

July 14, 2014

Matt Gibson

At the end of June, the FCC responded to a request from the U.S. Court of Appeals for the Second Circuit and filed an amicus brief in Nigro v. Mercantile Adjustment Bureau to provide the agency’s views on the applicability of its regulations implementing the Telephone Consumer Protection Act (TCPA).  Specifically, the Second Circuit asked the FCC whether a person consents to autodialed debt collection calls if he agrees to be called in connection with the termination of a deceased debtor’s account.  The FCC’s response: no.
As can be inferred from the court’s question, in Mercantile Adjustment Bureau, the petitioner, Albert Nigro, called a utility company to inform it that his mother-in-law had died and to request that the utility disconnect her apartment.  During the call, Nigro provided the utility with his personal mobile telephone number.

Fast forward more than a year.  Because a balance remained on Nigro’s late mother-in-law’s account, the utility company forwarded her records to Mercantile Adjustment Bureau to collect the outstanding balance.  According to the court records, Mercantile Adjustment Bureau then contacted Nigro’s mobile phone number 72 times over a nine-month period using an automated dialing system.  Nigro subsequently sued Mercantile Adjustment Bureau under the TCPA, but the trial court dismissed his complaint, finding that his knowing release of his mobile number to the utility company constituted express consent to be contacted at that number using an autodialer or a pre-recorded message.
In its amicus filing, the FCC urged the Second Circuit to reverse the lower court’s decision.  According to the FCC, pursuant to its 2008 Declaratory Ruling, a consumer’s decision to provide a company with his or her mobile telephone number conveys express consent under the TCPA regulations for subsequent debt collection calls only if the number was given “during the transaction that resulted in the debt owed.”  Applying the 2008 Declaratory Ruling to the facts in Mercantile Adjustment Bureau, the FCC argued that the debt-creating transaction was the late mother-in-law’s purchase of electric service from the utility and not Nigro’s later call to terminate electric service following her death.  Thus, according to the FCC, because Nigro’s call did not result in the creation of a new debt, the decision to provide his mobile number to the utility company should not be viewed as consent to receive autodialed or prerecorded calls to collect the outstanding balance on his late mother-in-law’s account.

Although it remains to be seen how the Second Circuit will rule in this case, the FCC’s amicus brief underscores the need for companies using autodialers or pre-recorded messages to implement safeguards to limit the likelihood of – and liability for – automated calls to mobile numbers.

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