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Financial Services Law Insights and Observations

District Court approves TCPA class action settlement

Courts TCPA Settlement Autodialer Privacy/Cyber Risk & Data Security

Courts

On August 15, the U.S. District Court for the Northern District of California entered a final approval order and judgment to resolve class action allegations claiming a security system company and its third-party dealer violated the TCPA through the use of an automatic telephone dialing system and prerecorded messages. According to the claims, consumers—including those on the do-not-call registry—allegedly received telemarketing calls at their residences or on cellphones from the dealer or the dealer’s sub-dealers promoting goods or services offered by the company. The company argued it was not responsible for calls the dealer made on its behalf, but the district court denied summary judgment and set a trial date. However, prior to the trial’s commencement, the parties reached a settlement. Under the terms of the settlement, the company agreed to implement changes to its practices to ensure TCPA compliance and banned the dealer from marketing or activating new accounts for the company. The company also agreed to pay $28 million into a settlement fund for consumer redress, no more than $1.4 million towards settlement administrator costs and expenses, $30,000 total in service awards to class representatives, and combined attorneys’ fees and litigation costs of approximately $7.5 million.

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