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Financial Services Law Insights and Observations


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  • 9th Circuit says telemarketing texts sent to mixed-use cells phones fall under TCPA


    On October 12, a split U.S. Court of Appeals for the Ninth Circuit reversed a district court’s dismissal of a TCPA complaint, disagreeing with the argument that the statute does not cover unwanted text messages sent to businesses. Plaintiffs (who are home improvement contractors) alleged that the defendants used an autodialer to send text messages to sell client leads to plaintiffs' cell phones, including numbers registered on the national do-not-call (DNC) registry. The plaintiffs contented they never provided their numbers to the defendants, nor did they consent to receiving text messages. The defendants countered that the plaintiffs lacked Article III and statutory standing because the TCPA only protects individuals from unwanted calls. The district court agreed, ruling that the plaintiffs lacked statutory standing and dismissed the complaint with prejudice.

    On appeal, the majority disagreed, stating that the plaintiffs did not expressly consent to receiving texts messages from the defendants and that their alleged injuries are particularized. In determining that the plaintiffs had statutory standing under sections 227(b) and (c) of the TCPA, the majority rejected the defendants’ argument that the TCPA only protects individuals from unwanted calls. While the defendants claimed that by operating as home improvement contractors the plaintiffs fall outside of the TCPA’s reach, the majority determined that all of the plaintiffs had standing to sue under § 227(b), “[b]ecause the statutory text includes not only ‘person[s]’ but also ‘entit[ies].’” With respect to the § 227(c) claims, which only apply to “residential” telephone subscribers, the appellate court reviewed whether a cell phone that is used for both business and personal reasons can qualify as a “residential” phone. Relying on the FCC’s view that “a subscriber’s use of a residential phone (including a presumptively residential cell phone) in connection with a homebased business does not necessarily take an otherwise residential subscriber outside the protection of § 227(c),” and “in the absence of FCC guidance on this precise point,” the majority concluded that a mixed-use phone is “presumptively ‘residential’ within the meaning of § 227(c).”

    Writing in a partial dissent, one judge warned that the majority’s opinion “usurps the role of the FCC and creates its own regulatory framework for determining when a cell phone is actually a ‘residential telephone,’ instead of deferring to the FCC’s narrower and more careful test.” The judge added that rather than “deferring to the 2003 TCPA Order which extended the protections of the national DNC registry to wireless telephones only to the extent they were similar to residential telephones, a reasonable interpretation of the TCPA, the majority has leaped over the FCC’s limitations to provide its own, much laxer, regulatory framework and procedures that broadly allow anybody who owns a cell phone to sue telemarketers under the TCPA.” 

    Courts Appellate Ninth Circuit Autodialer TCPA FCC Telemarketing

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  • FCC proposes rulemaking to combat unlawful text messages

    Agency Rule-Making & Guidance

    On September 27, the FCC announced a notice of proposed rulemaking (NPRM) to target and eliminate unlawful text messages. According to the FCC, the number of consumer complaints received related to unwanted text messages has increased by 146 percent between 2019 and 2020, and continues to grow in 2022. The Commission warns that these text messages present harms beyond that of unwanted phone calls, as text messages can include phishing and malware links. More than $86 million was stolen in 2020 through spam texting fraud schemes, the FCC reports. The NPRM seeks feedback on several topics, including whether providers should follow the STIR/SHAKEN authentication protocols for text messages as they do for phone calls, whether providers should block texts from invalid phone numbers, and how it can ensure that emergency text messages or other appropriate texts are not erroneously blocked. The NPRM also proposes requiring providers to block texts that appear to originate from phone numbers that are invalid, unallocated, or unused as well as numbers on the “Do-Not-Originate” list.

    The Commission is also seeking input on the extent to which spoofing is a problem in texting, and if caller ID authentication standards should be applied to texting. Spoofing is when a sender deliberately disguises their number to trick a recipient into thinking the message is trustworthy. A working group of the Internet Engineering Task Force is currently considering a draft standard that would apply parts of the STIR/SHAKEN framework to text messages, the FCC stated, adding that it is asking stakeholders for suggestions on an ideal timeline and feedback on whether the current framework’s governance system would be able to accommodate authentication for text messages or if the framework would require more comprehensive technology network upgrades.

    Comments on the NPRM are due 30 days after publication in the Federal Register.

    Agency Rule-Making & Guidance Privacy, Cyber Risk & Data Security FCC Text Messages

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  • FCC signs robocall enforcement MOU with Canada

    Agency Rule-Making & Guidance

    Recently, the FCC announced that it entered into a memorandum of understanding (MOU) with the Canadian Radio-television and Telecommunications Commission (CRTC) to develop a global and coordinated approach for addressing unlawful automated telephone calls. According to the MOU, the FCC and CRTC understand that it is in their common public interest to, among other things: (i) “cooperate with respect to the enforcement against Covered Violations, including sharing complaints and other relevant information and providing investigative assistance”; (ii) “facilitate research and education related to unlawful robocalls and caller ID spoofing”; (iii) “facilitate mutual exchange of knowledge and expertise through training programs and staff exchanges”: (iv) encourage awareness of economic and legal conditions and theories related to the enforcement of applicable laws as identified in Annex 1 to the MOU; and (v) update each other regarding developments related to the MOU in their respective countries in a timely manner. In a related statement, FCC acting Chairwoman Rosenworcel noted that robocall scamming is an “international problem,” and that it is “critical that we work closely with partners like our colleagues in Canada who share our commitment to fighting robocall scams and unmasking the bad actors behind them.”

    Agency Rule-Making & Guidance MOUs Canada Robocalls FCC Federal Issues

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  • FCC orders phone companies to block car warranty scammers

    Federal Issues

    On July 21, the FCC announced it is ordering phone companies to stop carrying traffic regarding a known robocall scam marketing auto warranties. The FCC noted that the operation is also the target of an ongoing investigation by the FCC’s Enforcement Bureau and a lawsuit by the Ohio Attorney General. As previously covered by InfoBytes, the Ohio AG filed a complaint against multiple companies for participating in an alleged unwanted car warranty call operation. The complaint, filed in the U.S. District Court for Southern District of Ohio, alleged that the 22 named defendants “participated in an unlawful robocall operation that bombarded American consumers with billions of robocalls.” The FCC’s order follows its announcement of actions taken to decrease robocalls, including sending cease and desist letters to several carriers in an attempt “to cut off a flood of possibly illegal robocalls marketing auto warranties targeting billions of consumers.” The announcement also noted that the FCC has authorized “all U.S.-based voice service providers to cease carrying any traffic originating from the [named] operation consistent with FCC regulations,” as detailed in the notice.

    Federal Issues FCC Robocalls State Attorney General Enforcement State Issues

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  • States vow to enter information agreements with FCC against robocalls

    State Issues

    On May 31, a coalition of 41 state attorneys generals, on behalf of the National Association of Attorneys General, sent a letter to the FCC commending the agency for its efforts in combating robocalls. Specifically, the AGs praised the FCC’s “leadership in encouraging states to enter into information sharing agreements to facilitate fast, effective information sharing during the course of robocall investigations.” The AGs stated that they “believe these information sharing agreements represent an important continuation of the progress made to date in combatting robocalls,” and entering the agreements “honor our country’s tradition of federalism and evidences a mutual commitment to working towards addressing complex issues collaboratively.” Not all the signatories had entered information sharing agreements with the FCC at the time the letter was sent, but the letter affirmed “their commitment to making a good faith attempt to sign the agreements,” and encouraged the FCC to reach out to the included point of contact for each state to move forward with the agreements.

    State Issues State Attorney General FCC Robocalls

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  • FCC acts to stop international robocalls

    Agency Rule-Making & Guidance

    On May 19, the FCC unanimously adopted proposed rules to ensure gateway providers that channel international call traffic comply with STIR/SHAKEN caller ID authentication protocols and validate the identity of the providers whose traffic they are routing to help weed out robocalls. As part of the agency’s robocall mitigation efforts, the proposed rules would require gateway providers to (i) “develop and submit traffic mitigation plans to the Robocall Mitigation Database”; (ii) “apply STIR/SHAKEN caller ID authentication to all unauthenticated foreign-originated Session Initiation Protocol (SIP) calls with U.S. North American Numbering Plan (NANP) numbers”; and (iii) “respond to traceback requests in 24 hours, block calls where it is clear they are conduits for illegal traffic, and implement ‘know your upstream provider’ obligations.”

    “Gateway providers serve as a critical choke-point for reducing the number of illegal robocalls received by American consumers,” the FCC stated in its announcement. “The new rules require gateway providers to participate in robocall mitigation, including blocking efforts, take responsibility for illegal robocall campaigns on their networks, cooperate with FCC enforcement efforts, and quickly respond to efforts to trace illegal robocalls to their source.” Non-compliance may cause a gateway provider to lose its ability to operate. The FCC also announced it is requesting further comments on a proposal to expand robocall mitigation requirements to intermediate providers in the U.S. and not just gateway providers. The agency will also decide whether anti-robocall and spoofing rules should also apply to these intermediate providers, as they are currently not required to certify with the Robocall Mitigation Database.

    Requiring domestic entry points to use STIR/SHAKEN, register in the Robocall Mitigation Database, and comply with traceback requests from the FCC and law enforcement will help the agency “figure out where these junk calls are originating from overseas,” FCC Chairwoman Jessica Rosenworcel said in a statement. “These measures will help us tackle the growing number of international robocalls. Because we can’t have these scam artists multiplying abroad and hiding from our regulatory reach. We also can’t have them hiding from our state counterparts.” To aid efforts, the FCC announced that to date 36 states have signed memoranda of understanding with the agency to share resources and information to reduce robocalls.

    Agency Rule-Making & Guidance FCC Robocalls STIR/SHAKEN State Issues State Attorney General

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  • FCC signs robocall enforcement partnerships with states

    Federal Issues

    On March 28, the FCC announced it launched formal robocall investigation partnerships with the Connecticut, District of Columbia, Idaho, Kentucky, Minnesota, New Jersey, and Wyoming state attorneys general, bringing the total number of state-federal partnerships to 22. According to the FCC, the seven AGs entered into a Memoranda of Understanding (MOU) with state robocall investigators and the FCC’s Enforcement Bureau, which establishes critical information sharing and cooperation structures to investigate spoofing and robocall scam campaigns. The FCC also noted that it expanded existing MOUs in Michigan and West Virginia with robocall investigations. According to the press release, the MOUs help facilitate relationships with other actors, including other federal agencies and robocall blocking companies, and provide support for and expertise with critical investigative tools, including subpoenas and confidential response letters from suspected robocallers. The FCC also noted that “[d]uring investigations, both the FCC’s Enforcement Bureau and state investigators seek records, talk to witnesses, interview targets, examine consumer complaints, and take other critical steps to build a record against possible bad actors,” which “can provide critical resources for building cases and preventing duplicative efforts in protecting consumers and businesses nationwide.”

    Federal Issues FCC Robocalls State Attorney General State Issues Enforcement

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  • FCC launches inquiry to reduce cyber risks

    Privacy, Cyber Risk & Data Security

    On February 25, the FCC adopted a Notice of Inquiry proposed by FCC Chairwoman Jessica Rosenworcel that would launch an inquiry into the vulnerabilities of the internet’s global routing system, in response to the increasing risk of cyberattacks stemming from Russia’s invasion of Ukraine. The adopted inquiry solicits public comments on vulnerabilities threatening the security and integrity of the Border Gateway Protocol, which is central to the global routing of internet traffic. The inquiry also intends to evaluate how these security risks could impact the transmission of data through email, e-commerce, and bank transactions to interconnected Voiceover Internet Protocol and 911 calls and how best to address any identified challenges. Comments are due 30 days after publication in the Federal Register, with replies due 30 days later.

    Privacy/Cyber Risk & Data Security FCC Russia Ukraine Ukraine Invasion Federal Register

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  • FCC proposes record $45 million fine against robocaller

    Federal Issues

    On February 18, the FCC released a proposed $45 million fine against a lead generator accused of conducting an illegal robocall campaign that made false claims about the Covid-19 pandemic to induce consumers into purchasing health insurance. This is the FCC’s largest ever proposed robocall fine to date. According to the FCC, the lead generator violated the TCPA by placing 514,467 robocalls to cellphones and landlines without subscribers’ prior express consent or an emergency purpose. The Florida-based lead generator allegedly purchased lists of phone numbers from third-party vendors and acquired phone numbers from consumers seeking health insurance quotes online, “without clearly disclosing that, by providing contact information, the consumers would be subject to robocalls.” It then left prerecorded voice messages marketing insurance plans sold by companies that had hired the lead generator. Many of these robocalls, the FTC claimed, were also unlawfully made to consumers on the Do Not Call Registry. FCC Chairwoman Jessica Rosenworcel issued a statement announcing that, in addition to the record fine, the Commission also established a new partnership with 16 state attorneys general in order to share information and resources to mitigate robocalls.

    Federal Issues FCC Enforcement Robocalls TCPA Lead Generation State Attorney General State Issues

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  • FCC proposes to classify ringless voicemails as “calls” under the TCPA

    Agency Rule-Making & Guidance

    On February 2, FCC Chairwoman Jessica Rosenworcel announced a proposal that would classify technology that leaves ringless voicemails on consumers’ cell phones as “calls” under the TCPA and therefore subject to the FCC’s robocalling restrictions. If adopted by the full Commission, callers using this form of technology would be required to obtain a consumer’s consent before delivering a ringless voicemail. The announcement explained that the TCPA “prohibits making any non-emergency call using an automatic telephone dialing system or an artificial or prerecorded voice to a wireless telephone number without the prior express consent of the called party.” According to Chairwoman Rosenworcel, ringless voicemails should face the same consumer protection rules as other robocalls. The proposal is in response to a petition that asked the FCC to find that ringless voicemails are not calls protected by the TCPA.

    Agency Rule-Making & Guidance FCC Robocalls TCPA

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