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Federal Deception Law: 6.5.3.3.2 Exemption for tax-exempt nonprofit organizations

The FTC exempts outbound calls to induce charitable contributions from its nationwide do-not-call rule,807 but there is no similar exemption from its company-specific do-not-call rule.808 Neither the FTC’s nationwide do-not-call rule nor its company-specific do-not-call rule exempts calls from for-profit solicitors that seek to sell goods or services.

Federal Deception Law: 6.5.3.3.4 Established business relationship

Both the FCC’s821 and FTC’s822 nationwide do-not-call rules exempt calls made to someone with whom the company has an “established business relationship.” Such a relationship lasts for eighteen months after the consumer’s last purchase or transaction with the company, or for three months after the consumer makes an inquiry or application regarding the company’s products or services,823 unle

Federal Deception Law: 6.6.3 Abandoned Calls

One problem with automatic dialing systems is that they lead to abandoned calls, because the called party may answer the call at a time when all of the solicitors are still on other calls. This may happen when a telemarketer uses automatic dialing equipment (a predictive dialer) that calls too many numbers for the employees of the telemarketing company to handle. Consumers rightfully complain that they rush to answer the phone, only to find no one at the other end of the call.890

Federal Deception Law: 6.6.3a Line Seizure

Pursuant to a mandate in the TCPA,912 the FCC has adopted a rule requiring that automatic dialing terminal equipment that delivers a recorded message must release the called party’s phone line within five seconds of the called party hanging up.913 In 2010, the FCC queried whether it should adjust the five-second limit to be three seconds.914

Federal Deception Law: 6.8.1 Introduction

The TCPA and the FCC rule adopted under it prohibit the use of a telephone fax machine, a computer, or any other device to send an unsolicited advertisement to a telephone fax machine.995 The impetus behind this prohibition is that junk faxes tie up recipients’ fax lines and shift costs from advertisers to recipients.996 The rule protects against faxes to business telephone subscribers as well as residential subscribers.997 While several of the TCP

Federal Deception Law: 6.8.2 Definition of “Telephone Fax Machine”

The statute defines the term “telephone fax machine” as “equipment which has the capacity . . . to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper.”1002 Many courts have held that the junk fax prohibition applies regardless of whether the message is sent to a fax server or computer that receives and stores the message for later printing, or to a conventional fax machine that automatically prints each message.1003

Federal Deception Law: 6.8.3.1.1 Definition; constitutionality

The junk fax rule generally prohibits “unsolicited advertisement[s].”1012 The statute defines this term as “any material advertising the commercial availability or quality of any property, goods, or services” that is transmitted to another person without prior express invitation or permission.1013 The definition in the FCC regulation is identical.1014

Federal Deception Law: 6.8.3.1.3 Faxes that promote free goods or services

Fax messages that promote goods or services at no cost—such as free magazine subscriptions, catalogs, consultations, or seminars—can be unsolicited advertisements because they often serve as part of an overall marketing campaign.1042 In some cases, the fact that the fax is promoting the sender’s products will be apparent on its face, such as a fax that offers a free seminar but adds a laudatory description of its goods or services.

Federal Deception Law: 6.8.3.1.4 Informational messages

Some courts hold that “informational messages” that are not primarily advertisements are not unsolicited advertisements.1048 For example, the Eighth Circuit held that a health plan prescription benefits administrator’s fax to doctors, informing them of new limits on insurance coverage for their patients’ opioid prescriptions, was informational and not an unsolicited advertisement.

Federal Deception Law: 6.8.3.1.6 Faxes that promote an indirect profit for the sender

To be an unsolicited advertisement, a fax must propose a commercial transaction, but it need not be a direct transaction between the sender and the recipient.1069 For example, a fax that encouraged physicians to write prescriptions for the sender’s services was an advertisement even though the physician’s patients, rather than the physicians, would be the actual purchasers.1070 Similarly, a fax

Federal Deception Law: 6.8.3.4.1 Overview

The TCPA requires that an unsolicited fax advertisement that is sent pursuant to an established business relationship contain a notice of the recipient’s right to opt out of receiving additional faxes.1116 This important requirement is discussed in § 6.8.3.4.2, infra.

Fair Debt Collection: 11.3.4.2 Primacy of the Arbitration Agreement’s Language

Courts first look to the plain language of the contract and the relationship between the collection agency or attorney and the original creditor to see whether the arbitration agreement extends to cover parties with that relationship to the original creditor.116 For example, one version of the GE Money Bank arbitration clause stated that it applied to disputes between the consumer and “us,” defined as the creditor’s parents, subsidiaries, predecessors, successors, assigns, employees, officers, and directors.

Fair Debt Collection: 11.3.9 Federal Law Prohibits Mandatory Arbitration in Mortgage Loans

The Truth in Lending Act (TILA) prohibits contract terms requiring the arbitration of disputes involving closed-end loans secured by a dwelling and open-end loans secured by a consumer’s principal dwelling.171 This TILA provision also provides that no other provision of such loans shall “bar a consumer from bringing an action” in court.172 TILA’s Regulation Z implements this provision, effective June 1, 2013.173 Because federal law limits a credito

Fair Debt Collection: 11.3.10 No Mandatory Arbitration Where Debt Incurred by Active-Duty Military Personnel or Their Dependents

The Talent-Nelson Military Lending Act prohibits creditors from enforcing mandatory arbitration agreements in certain types of consumer credit contracts against those who, at the time the agreement is made, were active -duty military personnel or their dependents.182 An arbitration requirement is unenforceable, even if the consumer is no longer a servicemember or a dependent of a servicemember, so long as the consumer was covered by the Act when the credit was originated.183 As a result, debt co

Fair Debt Collection: 11.3.12 Other Grounds to Challenge the Arbitration Clause’s Enforceability

In addition to challenges to an arbitration requirement set out earlier in this section, there are a number of other grounds to attack an arbitration requirement. The Federal Arbitration Act (FAA) finds arbitration clauses to be enforceable “save upon such grounds as exist at law or equity for the revocation of any contract.”197 One such ground to revoke any contract is unconscionability, and hundreds of decisions have found arbitration clauses unenforceable on this ground.198

Fair Debt Collection: 11.3.16a Mass Arbitration

Because of difficulties engaging in class arbitration or individual arbitration on behalf of many individual consumers, an increasingly utilized option is a procedure sometimes called “mass arbitration.” The practice takes its name from “mass torts,” which involves the filing of many individual personal injury complaints, often for product liability, toxic tort, or similar cases that involve factually similar predicates, but do not lend themselves to class treatment. Another name for mass arbitration is an “arbitration swarm.”

Federal Deception Law: 6.3.4.7 Autodialer Definitions Under State Laws

Many states have their own laws that prohibit autodialed calls. A number of these laws define the term “autodialer” to require that the numbers be automatically dialed and that the call use an artificial or prerecorded voice, so are narrower than the TCPA. Some state laws do not have strong substantive restrictions and some do not offer a private cause of action. However, it may be possible to construe a few of them to prohibit autodialed calls more broadly than the TCPA and to provide a private cause of action.