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    Telephone Consumer Protection Act (TCPA): What You Need to Know

    Most of us cringe when the phone rings, and we find ourselves on the receiving end of an uninvited sales call. Bill collection calls are even more unwelcome, but of course collection calls are inevitable if due dates lapse with no payment received.

    When collection calls are unwarranted, there’s a fine line between those calls and harassing telemarketing calls. To protect consumers from unwanted and/or harassing telemarketing, the Federal Communications Commission enacted the Telephone Consumer Protection Act (TCPA), which has expanded in recent years to cover newer technology like text messages.Companies found in violation of TCPA rules pay dearly. With fines of $500 to $1,500 per violation and class action settlements costing companies $30–40 million (according to Bloomberg BNA), companies cannot afford to ignore TCPA directives.

    Here are the key points your financial institution needs to know to ensure compliance with TCPA when making outbound collection calls:

    • TCPA requires the call recipient’s consent before a customer receives a call

      • Non-sales calls require prior consent

      • Calls for sales purposes require prior written consent

    • A consumer who provides his/her wireless phone number in a loan application consents to receive calls about that loan from the creditor and others acting on the creditor’s behalf; calls for other purposes are not allowed without separate consent

    • During loan-related calls, if a representative asks permission to make future sales calls and records a positive answer, the recording serves as written consent; therefore, it’s smart to add a request for future consent to all your loan-related calls

    • Text messages must follow the same rules as calls—make sure customers have given prior written or recorded consent

    • Customers may withdraw consent at any time, and companies are penalized and fined if they do not immediately end calls to customers who have withdrawn consent

    While collection calls are often inevitable, TCPA lawsuits and fines are completely avoidable. Ensure your financial institution and any related third parties have a solid understanding of TCPA rules before contacting customers. Read our California Credit Union case study to see a real example of outsourced collection calls that comply with TCPA.

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