Electronic Communication with Customers & Businesses

Electronic communications with customers and other businesses.

Position Statement

ABA opposes any provisions in law or regulation that would restrict legitimate electronic communications—whether by e-mail, facsimile, or telephone—between banks and their customers or other businesses.

Explanation

On January 20, 2010, the Federal Communications Commission (FCC) proposed changes to its rules promulgated under the Telephone Consumer Protection Act (TCPA) that will limit the use of prerecorded calls and automatic telephone dialing systems, or "autodialers." The FCC proposal would require banks, debt collectors, and others not engaged in sales or telemarketing that use prerecorded calls and autodialers to a customer's wireless phone to obtain "prior express consent" from the customer. Prior express consent is defined as a written agreement from the consumer that includes a clear and conspicuous disclosure that the purpose of the agreement is to authorize autodialed or prerecorded calls or texts to a cell phone. The proposal does not allow the agreement to be required as a condition of the underlying transaction, and it requires the agreement to include the cell phone number to which calls can be placed. As a result, banks will not be able to rely on provisions in a credit card agreement or other transaction documents authorizing prerecorded or autodialed calls to any cell number the customer may provide.

In addition, the FCC's proposal would eliminate the current exemption permitting prerecorded telemarketing sales calls to residential wireline numbers without the consumer's written agreement in those instances in which the caller and consumer have an established business relationship. Prerecorded sales calls to residential and wireless lines would both be subject to the prior written agreement requirement described above.

ABA opposes the proposed rule as it will significantly impact the banking industry's ability to communicate with customers. Cellular phones are increasingly becoming the sole telephone option for many consumers. The proposed rule will significantly impact the banking industry's ability to use autodialers and prerecorded messages to contact customers to provide fraud alerts and breach notifications; to provide timely notification of low balances, overdrafts or overlimit charges; to provide valued customer service calls; and to reach out to consumers facing financial hardship to resolve existing financial obligations. 

ABA, the Financial Services Roundtable, and the Consumer Bankers Association filed joint comments on May 21, 2010, opposing the Federal Communication Commission's proposed rulemaking to amend the Telephone Consumer Protection Act (TCPA) regulations. Read the comment letter. Comments in opposition to the written consent proposal were filed by a wide range of U.S. businesses, non-profit organizations, and even government agencies. FCC staffers appear to have been taken by surprise by the overwhelmingly negative response, and action on the proposal has stalled. Adoption of the written consent requirement, although less likely now than when the requirement was first proposed, remains a possibility.

In addition, the TCPA includes a private right of action: recipients of calls that violate the autodialer rule can recover damages of $500 per call, or $1,500 per call if the violations are found to be willful. Increasingly, plaintiffs’ lawyers are filing class action lawsuits for calls or texts made to cellular phones using an autodialer.

Contact for further information: Virginia O'Neill (202) 663-5073.