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Federal Deception Law: 7.3.5.2 Actual Agency

Often times, actual agency can be shown.171 The key question is whether the principal controlled, or had the right to control, the agent’s actions.172 For example, a court held that allegations that the seller authorized a telemarketer to make calls, participated in developing the script, and required that telemarketers follow it verbatim were sufficient to state a claim that the telemarketer was the seller’s agent.173

Federal Deception Law: 7.3.5.3 Apparent Agency

Even if the party directly committing the violation is an independent contractor, the principal may be vicariously liable on the theory of apparent agency.187 Apparent agency can exist whether or not actual agency exists.188 A contract clause prohibiting callers from holding themselves out as acting on the seller’s behalf is not dispositive.189

Consumer Bankruptcy Law and Practice: 11.6.2.8.2.2 Mortgage proof of claim attachment—Rule 3001(c)(2)(C)

Bankruptcy Rule 3001(c)(2)(C) requires the mortgage creditor to attach to its proof of claim the Mortgage Proof of Claim Attachment form.520 The form instructs the creditor to disclose the components of the total amount of the debt, the prepetition mortgage arrearage, and the postpetition mortgage payment amount. Mortgage creditors initially were required to include an itemization of prepetition fees and charges by entering this information in spaces provided on the form.

Federal Deception Law: 7.2.3a Identification Information and Other Requirements for Calls Under Do-Not-Call Rule

Similar issues arise with respect to the requirement that the caller provide identifying information and contact information in any call made for telemarketing purposes.51 It appears that this is a privacy protection, promulgated pursuant to its section 227(c) authority, since it relates to telephone solicitations and is essential if a company-specific (or national) do-not-call list is to be enforceable.52

Federal Deception Law: 5.2.3.4 General Limits to the FTC’s Jurisdiction

Due to general limitations on the FTC’s jurisdiction, the TSR does not apply to banks, federal credit unions, federal savings associations, common carriers, or—to the extent they are regulated by state law—insurers.63 However, a federal court found that the FTC has authority to enforce the TSR against a subsidiary of a national bank.64 Furthermore, the TSR covers non-bank entities that conduct telemarketing on behalf of banks.65 The same principle applie

Federal Deception Law: 7.5.4.6 Records That the FTC’s Telemarketing Sales Rule Requires Sellers and Telemarketers to Maintain

The FTC’s Telemarketing Sales Rule (TSR) imposes significant recordkeeping requirements on sellers and telemarketers that fall within the FTC’s jurisdiction.669 The TSR provides a roadmap for records that, in any TCPA case involving telemarketing calls, the plaintiff can expect the defendants to have. The FTC announced a significant expansion of the TSR in early 2024.

Federal Deception Law: 7.5.6 Evidence and Trial Issues

Motions in limine are common in TCPA cases. A court granted a TCPA plaintiff’s motion in limine to exclude references to the amount of statutory damages that can be awarded under the TCPA.712 The court allowed the defendant to mention that statutory damages are available, but excluded reference to their amount.

Federal Deception Law: 7.5.8.1 Statutory “Reasonable Procedures” Defense to Liability for Violation of Do-Not-Call Rules

Section 227(c)(5) of the TCPA creates an affirmative defense for violation of the privacy protections—including the FCC’s do-not-call rules and its calling time rule—that the FCC adopted pursuant to section 227(c). To establish the defense, the caller must prove that it created and implemented, with due care, reasonable practices and procedures to effectively prevent telephone solicitations in violation of the FCC’s regulations.

Federal Deception Law: 7.5.8.2 Other Defenses

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.735 Courts reject callers’ assertion of a reasonable reliance or good faith defense to a TCPA claim based on calls to reassigned numbers or wrong numbers.736 Waiver and unclean hands are not defenses to TCPA claims for statutory damages.737

Federal Deception Law: 7.6.1 Overview of TCPA Remedies

The plaintiff can recover actual monetary loss or $500 for each violation, whichever is greater.753 The version of this remedy that applies to violations of section 227(c)—which is the basis for the FCC’s do-not-call rules—provides for damages of “up to $500” per violation,754 thereby giving the court discretion to award less than that amount.

Federal Deception Law: 7.6.2 Multiple Violations

The private cause of action under section 227(b)(3), which encompasses, inter alia, robocalls to cell phones, prerecorded calls to residential lines, and junk faxes, provides for $500 statutory damages “for each such violation.” Thus, in a junk fax case, each junk fax is a separate violation entitling the consumer to an award of damages.775 A violation occurs when the prohibited fax is sent.776 In one case, a district court awarded a consumer $500 per fax for 7725 unsolicited fax advert

Federal Deception Law: 7.6.3 Willfulness or Knowledge As a Requirement for Treble Damages

Whether a defendant acts willfully or knowingly is relevant only to treble damages and is not a general prerequisite to a recovery of TCPA statutory damages.790 A telemarketer’s failure to take any steps to verify that the phone numbers provided by a lead generator actually belonged to consenting consumers created a triable issue of fact as to willfulness and knowledge.791 In seeking a treble damage award, the defendant’s willfulness or knowledge need not be proven by clear and convincing eviden

Federal Deception Law: 7.7 Government Enforcement

The TCPA authorizes state attorneys general to seek damages or injunctive relief in federal court.864 In addition, the section of the TCPA that deals with caller ID spoofing provides for FCC and state enforcement, as well as criminal penalties.865 The FCC’s general authority to order forfeitures also applies to TCPA violations.866 The TCPA’s private right of

Unfair and Deceptive Acts and Practices: 5.6.3.3 Illegal or Unenforceable Contract Terms As an Unfair and Deceptive Practice

The CFPB has ruled that “including an unenforceable material term in a consumer contract is deceptive, because it misleads consumers into believing the contract term is enforceable.”364 The California and Massachusetts Supreme Courts have ruled that a landlord commits an unfair and deceptive practice by including illegal and unenforceable terms in a lease agreement even if the terms are not enforced.365 Tenants are deceived because they are likely to believe the

Unfair and Deceptive Acts and Practices: 5.6.4.2 Oral Representations Inconsistent with the Contract

Oral representations inconsistent with written representations or contract provisions are deceptive.388 It may be a UDAP violation to fail to include oral representations in the written contract.389 An Idaho UDAP rule declares that a seller commits an unfair and deceptive act or practice by making any claim or representation that is inconsistent with or contradictory to a written claim, representation or provision in a contract, document, or instrument.

Unfair and Deceptive Acts and Practices: 5.6.6 Refunds and Cancellation Rights

Several state UDAP statutes and regulations require that, absent a disclosed alternative policy, purchasers must receive full refunds even for nondefective goods returned to a store, except for perishables and certain other enumerated exceptions.420 It is a UDAP violation to fail to make a refund to which the consumer is entitled,421 or to fail to inform consumers of their right to receive a refund.422

Unfair and Deceptive Acts and Practices: 5.6.7.1.1 Advantages of UDAP claims in breach of warranty cases

While the Uniform Commercial Code and other state and federal laws give consumers remedies for breach of warranty,438 UDAP remedies have certain advantages. A UDAP claim may be particularly useful where consumers are unable to show that they have met the UCC’s requirements for creation or enforcement of a warranty. For example, an Illinois court affirmed the dismissal of class action warranty claims because the consumers were unable to show that they had given notice of the breach of warranty to the manufacturer.