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Fair Debt Collection: 14.3.2.7 Burden of Proof Regarding Exceptions

The general rule under the TCPA is that the person making the call has the burden of demonstrating that it falls within an exception to one of the TCPA’s prohibitions.172 Accordingly, the caller has the burden of establishing that it had the prior express consent of the called party to make an autodialed or an artificial or prerecorded call to a cell phone.173 This is consistent with the general rule that the party claiming the benefit of an exception in a federal statute has the burden of comin

Fair Debt Collection: 14.3.2.8.1 Private cause of action; relief

The TCPA offers an express private cause of action for actual monetary loss or $500 damages for each violation, whichever is greater.175 The statutory damage award can be trebled if the court finds that the defendant willfully or knowingly violated the statute or regulations.176 Since debt collectors who make illegal calls to a debtor’s cell phone usually make a series of such calls, the TCPA offers the possibility of a significant award even if actual damages are minimal.

Fair Debt Collection: 14.3.2.8.2 Who may sue

Generally, courts permit both the subscriber to sue, as well as the person who carries and regularly uses a cell phone, even though that person is not the subscriber.178 Thus, the person who carries and regularly uses a cell phone may sue, even if someone else is the subscriber.179 The owner of a cell phone also has standing to sue for calls made while the phone was in the possession of an investigator hired by the owner’s attorney.180 A non-debtor

Fair Debt Collection: 14.3.2.9.1 Jurisdiction and class actions

State and federal courts have concurrent jurisdiction over TCPA suits.183 Many courts have generally declined to exercise supplemental jurisdiction over defendants’ counterclaims against TCPA plaintiffs to collect on the underlying debt.184 One of the reasons that courts often cite is that exercising jurisdiction over these counterclaims would contradict federal policy concerns against automated telephone calls.185 However, this view is not univers

Fair Debt Collection: 14.3.2.9.3 Liability of creditors for debt collectors’ violations; corporate officers and individuals

Creditors are liable for improper autodialed or prerecorded calls to cell phones by their debt collectors.203 In a 2008 ruling, the FCC determined that: “[A] creditor on whose behalf an autodialed or prerecorded message call is made to a wireless number bears the responsibility for any violation of the Commission’s rules. Calls placed by a third party collector on behalf of that creditor are treated as if the creditor itself placed the call.”204

Fair Debt Collection: 14.3.2.9.4 Statute of limitations and other defenses

Most courts have held that TCPA claims are governed by the general four-year statute of limitations for claims under federal statutes.214 Since the statute of limitations for a TCPA claim is set by statute, laches is not a defense.215

Neither good faith, nor the maintenance of reasonable procedures to avoid violations, is a defense to a claim involving the TCPA’s restrictions on robocalls.216

Fair Debt Collection: 14.3.3.1 Generally

Caller ID is a service that allows a subscriber to view the telephone numbers, including unlisted numbers, that are associated with incoming telephone calls.226 Caller ID issues related to debt collection can arise in at least two different ways.

First, debt collectors when calling consumers or third parties may “spoof” or falsify caller ID information to encourage those called to answer the phone. Spoofing is widespread, and only specifically illegal under certain circumstances.

Fair Debt Collection: 14.3.3.2 Spoofing and The Truth in Caller ID Act

The Truth in Caller ID Act of 2009227 amended the Telephone Consumer Protection Act to make it unlawful for any person to transmit misleading or inaccurate caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value. The FCC has adopted Truth in Caller ID Act regulations,228 which closely follow the requirements of the Act itself.

Fair Debt Collection: B.2.4 Debt Collection Practices (Regulation F); Time-Barred Debt

The CFPB issued an advisory opinion clarifying that entities that qualify as debt collectors under the FDCPA that bring or threaten to bring state court foreclosure actions on time-barred mortgage debt may violate Regulation F § 1006.26—even if the debt collector did not know that the debt was time barred. See 88 Fed. Reg. 26,475 (May 1, 2023).

Fair Debt Collection: 11.15.11b Redressability

The third requirement for Article III standing articulated by Supreme Court decisions is that the plaintiff’s injury must be one “that is likely to be redressed by a favorable judicial decision.”2111 An unpublished Seventh Circuit opinion holds that an FDCPA plaintiff’s failure to pray explicitly for actual damages did not mean that her injury, which included a modest expenditure for postage, was not redressable by a favorable decision.

Fair Debt Collection: 11.15.12a Pleading

Before filing an FDCPA complaint, it is important to interview the consumer carefully to identify any harm the consumer suffered beyond experiencing the violation.2126 A very small loss may be sufficient to establish standing.2127

Fair Debt Collection: 14.3.3.3 FDCPA and Other Claims for Falsifying Caller ID Information

Section 1692d(6) of the Fair Debt Collection Practices Act (FDCPA) prohibits “the placement of telephone calls without meaningful disclosure of the caller’s identity.” Meaningful disclosure has been defined as including the caller’s name, the collection company’s name, and the nature of the caller’s business.241 A federal court found a FDCPA § 1692d(6) violation where the debt collector transmitted the name “Jennifer Smith” to the recipient’s caller ID device to lure the recipient to answer the phone, where no Jennifer Smith worked for the de

Fair Debt Collection: 14.3.3.4 Consumers’ Ability to Keep Their Phone Numbers Private

Caller ID technology is particularly troublesome for consumers who wish to preserve the privacy of their telephone numbers and locations. Consumers may wish to keep their phone numbers private from creditors and collection agencies to avoid repeated or harassing phone calls. Such consumers may unwittingly give debt collectors their telephone numbers by simply calling the collector from a phone without a caller ID block.

Fair Debt Collection: 14.3.4 Protection from Electronic Messaging Harassment

The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act)264 prohibits materially false or materially misleading headers in certain email messages.”265 It requires the sender of an unsolicited commercial email message to provide consumers a way to opt out of future messages.266 CAN-SPAM also authorizes the FCC to adopt rules to protect consumers from unwanted “mobile service commercial messages,”

Fair Debt Collection: 14.5.1 Advantages and Disadvantages of RICO Claims

Unlawful debt collection may violate the federal Racketeering Influenced and Corrupt Organizations Act (RICO).301 RICO does not prohibit unlawful debt collection itself, but rather targets those who use such debt collection or other specified criminal acts to relate to an “enterprise”302 in a forbidden manner.

Fair Debt Collection: 14.5.2.1 Generally

RICO prohibits persons from using either of two different kinds of qualifying conduct to relate to an enterprise in a prohibited manner. These two kinds of preliminary conduct are “collection of an unlawful debt” and a “pattern of racketeering activity.”305 The next two subsections discuss these preliminary requirements for any RICO claim.

Fair Debt Collection: 14.5.2.2 Collection of an Unlawful Debt

RICO defines “unlawful debt” to include debts from unlawful gambling and debts that arise from a loan that is both unenforceable under a usury law and bears a rate at twice the enforceable rate.306 A defendant need only collect one unlawful debt to meet this initial element of RICO.307 Although a plaintiff must show that a usurious debt was incurred “in connection with . . .

Fair Debt Collection: 14.5.2.3 Pattern of Racketeering Activity

The second, alternative type of qualifying activity is a “pattern of racketeering activity.” “Racketeering activity,” the core requirement of this type of qualifying conduct, comprises any of nine state criminal offenses or any of a longer list of specified federal offenses.312 Of these, mail fraud and wire fraud are the two most commonly invoked predicate offenses.313

Fair Debt Collection: 14.5.3 RICO’s Substantive Prohibitions

Once a plaintiff has shown that a defendant has either collected an unlawful debt or committed a pattern of racketeering activity, the plaintiff must show that the defendant used that conduct to relate to an “enterprise”325 in a manner that violates one of RICO’s three substantive provisions.326 The provision most commonly employed by civil RICO suits prohibits a person who is employed by or associated with an enterprise from using either the collection of an unlawful debt or a pattern of racket