WHITEWATER, Wisc. — On Saturday employees, friends and clients of Todd, Bremer & Lawson, a Rock Hill, South Carolina corporation,  participated in the Biked MS: TOYOTA Best Dam Bike Ride and raised $7,465.00 to aid in Multiple Sclerosis research. Over the last six (6) years The team has raised more than $28,890.00 by participating in this fundraising event. Seven (7) members of Team Hare and the Tortoise led by, Hal Todd, TB&L’s President, cycled fifty (50) miles through the scenic Wisconsin landscape from Waukesha County Technical College in Pewaukee, Wisconsin to the University of Wisconsin-Whitewater in Whitewater, Wisconsin.

Team Hare and the Tortoise comprised of TB&L’s; President, Hal Todd, Regional Directors, Rachelle Melloch and Lori Hartung. Friends; Kathy Hust, Michael Stoel, Scott Hartung, and Patrick Brettschneider, a client from the University of Michigan. The cyclists experienced the thrill of Wisconsin’s spectacular countryside, and memories that will last a lifetime. All the cyclists’ participation will help drive MS research forward and help deliver services to those who face the challenges of MS every day so they can live their best lives.

Bike MS: Wisconsin Chapter’s 2019 goal is to raise over 1.4 million dollars.

 

About Bike MS:

Bike MS is the fundraising cycling series of the National MS Society and raises more money than any other cycling event for any other cause. To date, Bike MS cyclists, volunteers, and donors have raised more than $1.3 billion to stop MS in its tracks, restore what’s been lost, and end MS forever.

You can register to ride in any of our nationwide events as an individual or as a part of a team. Each ride has a fundraising minimum and features extraordinary cycling routes, support, volunteers and experiences. So, find one near you, or ride somewhere new!

 

About Todd, Bremer & Lawson Inc:

Todd, Bremer & Lawson is the oldest, privately held corporation, dedicated exclusively to third-party collection efforts of delinquent obligations for colleges, and universities in the United States. TB&L is a member of the ACA International (“ACA”), the Association of Credit and Collection Professionals and  the Coalition of Higher Education Assistance Organizations (“COHEAO”). 

 

On Friday, the Eastern District of Missouri decided a case in favor of a debt collector pertaining to a collection letter that stated the creditor may offer less favorable terms in the future if the consumer satisfies the amount for less than the full balance owed. The case in question is Lantry v. Client Services, Inc., No. 4:18-cv-1694 (E.D. Mo. Aug. 2, 2019).

Client Services, Inc. (CSI) sent a collection letter to plaintiff for a defaulted Chase account. The letter included a disclosure that stated, “If we settle this debt with you for less than the full outstanding balance, Chase may offer you less favorable terms in the future for some Chase products or services, or may deny your application.” 

Plaintiff filed a slew of FDCPA claims related to this disclosure, but the court was not convinced and, instead, granted CSI’s motion for judgment on the pleadings. 

The Court’s Decision

First and foremost, the court found that the statement is true, and therefore not false and misleading. Plaintiff attempted to argue that the statement means the inverse of what it actually says: that paying the full amount will lead to more favorable terms in the future. The court was not persuaded, stating:

The letter never states that full payment of the outstanding debt will result in more favorable terms from Chase in future dealings. It offers to settle Lantry’s balance due for $443.00, and it contains a warning conveying to Lantry that if she accepts the offer, Chase may offer her less favorable terms in the future or deny her application. To an unsophisticated consumer, this statement does not imply that paying the full balance would put a person in the position to receive more favorable terms. Indeed, as Lantry alleges, Chase has already “charged off her outstanding debt of $2,212.73. Rather, the statement conveys what it says: settling the balance due will not necessarily return Lantry to good standing with Chase. 

The court concluded that “[a]n unsophisticated consumer would not be misled into paying the full amount in hopes of securing better future terms with Chase, especially given the opportunity to settle the debt at an 80% discount.”

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Plaintiff attempted to argue that this disclosure’s proximity to the mini-Miranda somehow implies that the disclosure is also legally required. But, again, the court was not convinced. 

With this, the court granted the motion for judgment on the pleading and dismissed the claims.

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Want to keep up with other similar FDCPA cases as they come out? You can do so through iA’s Case Law Tracker, which allows you to conduct incisive and quick legal research in less time than it takes to pour your morning cup of coffee.

Editor’s Note: This article was originally published on the Maurice Wutscher blog and is republished here with permission.

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Distinguishing contrary rulings from the Eighth and Eleventh Circuits, the U.S. Court of Appeals for the Seventh Circuit recently held that a debt collector’s percentage fee was recoverable under the language of a contract that required the consumer to pay “any costs (including reasonable attorney’s fees) incurred by [the creditor] in attempting to collect amounts due.”

A copy of the opinion in Bernal v. NRA Group, LLC is available here.

A consumer bought a monthly pass to Six Flags amusement parks. The contract stated that if the buyer failed to make the required monthly payments, he would be responsible for “any costs (including reasonable attorney’s fees) incurred by [Six Flags] in attempting to collect amounts due.”

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The consumer failed to pay as promised, and Six Flags hired a debt collection company to recover the balance owed. The contract with the debt collection company provided that it could charge “a 5% management fee plus an additional amount based on the number of days the debt was delinquent (in this case, an additional 20%).”

The debt collection company sent a demand letter to the consumer “for the $267.31 he owed, plus $43.28 in costs….”

The consumer failed to pay and instead filed a class action lawsuit under the Fair Debt Collection Practices Act (FDCPA), alleging that [the debt collector] charged a fee not “‘expressly authorized by the agreement creating the debt.’” 15 U.S.C. § 1692f(1).

The trial court denied both sides’ motions for summary judgment and the case went to trial. The trial judge “held that the percentage-based collection fee was expressly authorized” by the language in the contract with the consumer stating that if the account was delinquent for more than 30 days, the account would be cancelled and the consumer “billed for any amounts that are due and owing plus any costs (including reasonable attorney’s fees) incurred by [Six Flags] in attempting to collect amounts due or otherwise enforcing this agreement.”

On appeal, the Seventh Circuit framed the issues before it as (a) whether the collection fee was “expressly authorized by the agreement creating the debt” and (b) “whether the collection fee was a ‘cost[] … incurred by [Six Flags] in attempting to collect amounts due.”

The Court analyzed whether the collection fee was a “cost” followed by “whether it was a cost ‘incurred … in attempting to collect[,]” and answered “yes” to both questions.

The Seventh Circuit rejected the plaintiff’s argument that the contract authorized only “actual costs … like letterhead and postage but not collection fees” because “the contract never uses the term ‘actual costs,’ nor does anything in the text suggest it should be read so restrictively. … To the contrary, the contract explicitly allows for “any costs.”

After citing legal and non-legal dictionaries for the definitions of “cost” the Court explained that the “$43.28 at issue … is literally the sole ‘cost’ of Six Flags’ ‘attempt to collect’ the debt.”

The Seventh Circuit next rejected the plaintiff’s argument that “costs” meant those expenses awarded by a court to a prevailing litigant because “nothing in this contract suggests that the word ‘costs’ bears that narrow meaning here.”

The Court explained that the subject contract authorizes “the collection of any costs, including reasonable attorney’s fees.” “That phrase has a significant impact on the contract’s breadth because the word ‘including’ generally ‘introduces examples, not an exhaustive list.’”

Relying in part on the fact that Blacks’ Law Dictionary defines “Costs of Collection” as including attorney’s fees, the Seventh Circuit reasoned that “[i]f attorney’s fees are one nonexhaustive example of what’s included, we fail to see the basis to exclude analogous collection fees.”

The Court then concluded “that a percentage-based collection fee is a ‘cost’ within the meaning of this language[,]” explaining that “[i]n doing so, we acknowledge that we depart from two of our sister circuits.”

In one case, the Eighth Circuit “held that a debt collector ‘violated the Act by adding the collection fee based on a percentage fee rather than on actual costs when [the debtor’s] agreement with the credit union provide she was liable only for actual costs.’” In the second case, “the Eleventh Circuit said the same of a contract that allowed for ‘costs of collection, including a reasonable attorney’s fee.’”

Acknowledging that the language at issue in those two cases “was materially indistinguishable from the contract at issue here[,]” the Court disapproved of those decisions for two reasons.

“First, those decisions relied on a pair of assumptions we find questionable: that the contracts at issue authorized only ‘actual costs,’ and that ‘actual costs’ necessarily do not include collection fees.” The contract at issue, however, did not mention “actual costs” and instead “allows for ‘any costs,’ and the most reasonable reading of that term is to include fees in attempting to collect.”

Second, the contract involved in the Eleventh Circuit’s case, “like the one at issue here, explicitly provided that the term ‘costs’ includes attorney’s fees. And attorney’s fees are not ‘actual’ costs as the Eleventh Circuit used that term.” Accordingly, the Court refused “to hold that the term ‘costs’ bears such a narrow meaning when the contract explicitly tells us that the term is broad enough to include more.”

Finally, the Court rejected the plaintiff’s argument that “[r]egardless of the definition of ‘cost,’ … the collection fee wasn’t authorized because it hasn’t been ‘incurred’ yet[,]” reasoning that “[t]he problem with [plaintiff’s] argument is its premise: he assumes that because the contract uses the word ‘incurred,’ it applies only to obligations that already exist prior to billing. But the contract never says that.”

The Seventh Circuit then analyzed the grammar used by the contract, explaining that the word “incurred” is a past participle, which we generally use to form one of two things: perfect tenses or the passive voice.” It then noted that “[a] quick survey of judicial opinions confirms that the past participle is an uncommonly flexible device. Sometimes courts have, as [plaintiff] insists we should, found that a past participle refers to a completed event. … In other situations, courts have said that past participles ‘describe the present state of a thing …. In still others, courts have found that past participles can refer to future events.”

Because “nothing in the contract’s actual language says much about timing at all[,] [t]hat silence strongly supports [the debt collection company’s] argument: absent limiting language, ‘any’ should mean ‘any.’ It should include costs incurred at any time, including those that will necessarily be incurred at the time of payment.”

Agreeing with the trial judge “that the word ‘incurred’ lacks a specific temporal restriction[,]” and stressing that “[t]he contested $43.28 is not an estimate [but] the precise amount that would have been due had [plaintiff] paid his debt [when he received the demand letter], the Seventh Circuit concluded that “this standard collection fee falls within the contract’s broad language authorizing ‘any costs’ of collection. As a result, the [debt collector’s] letter did not violate the FDCPA.”

 

It appears the door has finally closed on any chance for large private collection agencies (PCAs) to compete directly for a Department of Education (ED) contract for post-default debt collection services. In a comprehensive yet succinct summary of the years’ long legal battle, Judge Wheeler of the Court of Federal Claims spared neither side in his review of the arguments – or lack thereof – as he puts this matter to bed.

Catch me up, please

This saga, which began in 2015, most recently had two intersecting matters in play.

First was the suit regarding ED’s May 2018 cancellation of its Solicitation for large PCA services; In September 2018, the court ruled in favor of the PCAs and permanently enjoined ED from canceling the Solicitation. The PCAs argued, however, that ED essentially ignored this order and proceeded with the cancellation. If you need a full recap, this story is a great place to start.

Second was the protest of ED’s (separate) Solicitation for services under its NextGen plan that would put all federal student loan servicers on a common technology platform with a single database. The PCAs’ complaint in this case was that ED had improperly bundled pre-and post-default servicing in the same procurement, which is a) illegal and b) makes it impossible for debt collectors to compete for work unless they can either a) provide all services required by the full student loan cycle (which, it’s argued, no company is capable of) or b) establish a viable teaming arrangement as a subcontractor (which, it’s argued, is both challenging and would cause a conflict of interest). The case is FMS Investment Corp., et al., v. United States; ConServe filed a complaint on the same day in October 2018 as FMS and their cases were consolidated. This article provides a great background on the twists and turns.

Okay, so what just happened?

Yesterday Judge Thomas Wheeler denied the PCAs’ motion for a permanent injunction and granted the Government’s cross-motion for judgment on the administrative record (MJAR). The first sentence of his 12-page decision reveals the punch line:

“There is no such thing as a perfect procurement, and the Department of Education’s (ED) years-long series of student loan servicing and debt collection solicitations typifies the axiom. But a flawed procurement is not necessarily an illegal one.”

This pretty much sums up Judge Wheeler’s prevailing position on this years’-long saga. He has repeatedly criticized the Government for failing to make compelling arguments, yet ruled in their favor in spite of it. As recently as July 17, 2019, Wheeler said the following during oral argument to Alexis Echols, an attorney for the Department of Education:

“Here’s my sticking point, though, and you may have gotten this impression already, but what we have here is a rather serious restriction on competition that is occurring, which would be contrary to CICA, just looking at it at a 30,000 foot level. And what I’m getting as the reason for doing this restriction is a lot of general platitudes like it will be more efficient, we know that a holistic approach will work better. Well, that’s great, but you’re not giving me anything specific that I can point to and say, yeah, this obviously constitutes good reason for doing it.’

Notwithstanding this sticking point, the Court closed the door on this case, concluding that:

1. ED provided sufficient justification for combining loan servicing and default collection work;
2. NextGen did not per se violate federal and state laws governing debt collectors;
3. NextGen is not otherwise arbitrary and capricious; and
4. ED’s decision to cancel the PCA solicitation was not arbitrary and capricious. 

Judge Wheeler’s decision makes ED’s case more effectively than the Government did itself. He summarizes each argument made by the Plaintiffs and then proceeds to dismiss each one, concluding essentially that he owes ED the benefit of the doubt, and that ED is not required to argue a perfect case. The fact is, he clearly wasn’t impressed with either side, and this decision lets everyone know it.

One of the many examples (you can read them all for yourself here) include,

“Plaintiffs focus on CICA [the Competition in Contracting Act] and the laws governing debt collectors, but with their typical firehose approach to protesting ED procurements, they make several other points worthy of direct refutation.

For one, Plaintiffs stress that ED still has not conducted a legal analysis of NextGen. However, an agency is “not required to synthesize its thinking and its market research into a prelitigation written explanation of the rationale for each of [its] solicitation requirements.” (citations omitted) 

And another,

“Plaintiffs also accuse ED of manipulating and misrepresenting collections data to show that the smalls perform at least as well as the large PCAs. Plaintiffs cite to collections data in an attempt to argue that the large PCAs perform better than the smalls. The Government cites similar data in an attempt to argue the opposite.

None of the parties’ arguments on this point deserve much weight. Both sides draw–at best–weakly supported and self-serving conclusions from the data they present.”

Finally, he says,

“Although ED’s NextGen solicitations are far from procurement paragons, the Court will uphold even an agency action “of less than ideal clarity if the agency’s path may reasonably be discerned… ED and its NextGen solicitations have managed to clear this low bar.”

And. That’s that… unless the PCAs decide to appeal. Also, there’s this case that was filed on July 16, 2019 — just a few weeks ago. While it’s possible the Judge would carry over his same reasoning to this case, there are some additional arguments that will need to be addressed.

 

ROCKVILLE, Md. – iA and Women in Consumer & Commercial Finance are pleased to announce the agenda for the 2019 event. Headlined by a pair of keynotes from entrepreneur and author Bea Wray as well as leadership expert and Evolve Global president Heather Cristie, the new agenda is hyper-focused on subject matter designed to help women from across consumer and commercial finance enhance their careers and help build stronger networks.

“It is our goal to collaborate with our customers and create handcrafted experiences that appeal to all women, regardless of level, background, development needs,” said iA President and Women in Consumer & Commercial Finance chair Amy Perkins. “I’m confident we’re well on our way to doing just that! THANK YOU to the advisory council and everyone who participated in the survey that ultimately shaped the agenda.”

See the full agenda here.

 

Women in Consumer & Commercial Finance 2019 runs December 11-13 in Scottsdale, AZ. The event is for professional women working in consumer or commercial finance at ALL levels and combines industry-specific professional development with the richest networking environment of any industry event. This is not just an event where you listen to women talk ABOUT women’s issues… it’s an event designed to get you engaged and working together ACTIVELY to move women’s careers forward.

Early-bird savings are still in effect. Register now to save your spot this December.

Today, the Consumer Financial Protection Bureau (CFPB) announced that it is extending the comment period for the Notice of Proposed Rulemaking (NPRM) for debt collection to September 18, 2019, one month past the original comment deadline.

According to the Federal Register, the CFPB received “[t]wo written requests from consumer advocates and an industry trade group” that asked to extend the comment period by 60 to 90 days. “The requests indicate that the interested parties would use the time to conduct additional outreach to relevant constituencies and to properly address the many questions presented in the NPRM.” 

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insideARM Perspective

For those drafting comments to the 500-page long NPRM, an extension might come as a sigh of relief. However, it’s important to note that an extension has certain implications.

Once the comment period closes, it could take roughly a year for a final rule to be proposed. Congress receiving the final rule in mid-September means that the Congressional Review Act’s 60-day clock—which allows Congress to kill a regulatory rule and prevents any new similar rule—would be running right around election time. What happens if the election shifts the current power dynamic? What happens if it takes longer than one year for the final rule to be introduced to Congress, putting the Congressional Review Act deadline at a point when the new Congress is seated?

The Congressional Review Act doesn’t just kill a bill—it prevents the agency (in this case, the CFPB) from submitting a substantially similar rule without new statutory authorization. Two years ago, we saw the CFPB’s Arbitration Rule meet its bitter end when the Congressional Review Act was invoked. Could this happen again with the CFPB’s debt collection NPRM that, with some recommended tweaks, could both provide debt collectors the long-desired clarity on compliance with the Fair Debt Collection Practices Act and bring them into the 20th century (no, that is not a typo) by allowing emails and voicemails? If it does, debt collectors could be left without further guidance indefinitely.

The good news is that the NPRM is, generally, a thoroughly thought-out rule. It needs some changes, but for the most part, it is fairly comprehensive and clear about what it allows and what it doesn’t. Considering that the CFPB has been working on the debt collection rules for many years, it may not take a full year for the final rule to be released. If that’s the case, then the Congressional Review Act situation might be avoided and the industry can finally have its guidebook of rules.

Editor’s Note: This article originally appeared on the Ontario Systems Blog, which also includes other ARM-related content, and is republished here with permission.

On July 11 in Washington, D.C., the U.S. Chamber of Commerce hosted #DataDoneRight, a one-day summit highlighting the policy issues surrounding businesses’ use of consumer data. It was an engaging, eye-opening event that drew together a variety of stakeholders and speakers.

The day’s presentations offered many important takeaways, but the bottom line was clear. If your business or customers rely on consumer data to provide good service, make strategic decisions, and ultimately make a profit, you should be focused on preparing for data privacy legislation that’s heading your way.

As a member of the Chamber’s Technology Engagement Center (C_TEC) and on behalf of Ontario Systems, I’ve had the distinct privilege of helping develop the Chamber’s proposed federal legislation addressing the need for a national data privacy framework. We at Ontario Systems understand that the businesses in the industries we serve are passionate about protecting consumer data, while at the same time are dedicated to providing data-driven innovation. Working toward establishing appropriate rules, as well as sufficient time to implement those rules is of utmost importance, thus we jumped at the chance to represent our industries to ensure their voice is heard in the hopes of preventing a far more painful scenario: a tsunami of conflicting state laws that could overwhelm businesses and upend our digital economy.

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Why Is a National Regulatory Framework in Businesses’ Best Interest?

In 2018, California was the first state to pass sweeping data privacy laws (the California Consumer Privacy Act, or CCPA). As of February 2019, 11 more states had introduced their own data privacy legislation. In the absence of comprehensive federal law (and with no promising signs that Congress will act soon), more and more state legislatures will be forced to address this issue.

A patchwork of 50 state laws will not only create mass confusion among consumers and businesses, but also hit small and midsize businesses particularly hard. Staying compliant and fighting red tape across state lines will be complex, costly endeavors requiring significant resources. This new legal minefield could simultaneously create a chilling effect and open the door to countless lawsuits, thus hampering or endangering small to medium-sized enterprises’ (SME) ability to conduct business.

The CCPA and the EU’s General Data Protection Regulation (GDPR) are contrasting studies in data privacy legislation. In terms of how they were developed and how they’re impacting businesses, both of these models offer lessons we hope lawmakers will take to heart.

The California Consumer Privacy Act (CCPA): A Blueprint for State Action?

The California Consumer Privacy Act (CCPA), which will go into effect next year, was conceived as a David vs. Goliath effort to protect consumers from Big Tech data abuses. The CCPA was developed over a short period of time and without enough business input. According to #DataDoneRight presenter and Californians for Consumer Privacy Board Chair Alastair Mactaggart, the law is largely a rebuke of two leading tech giants—whose combined 2018 revenues of $192 billion were earned, he says, “on the backs of others’ data and information.”

But most businesses are not tech giants, and many use customer data in helpful, important ways.

For example, #DataDoneRight attendees learned that Thompson Reuters, through responsible data sharing, has helped solve crimes such as shootings, sex trafficking, and Medicare Fraud. There are many more businesses, both B2C and B2B, who use customer data every day to make the customer experience more personalized, convenient, and valuable.

By introducing private rights of action, the CCPA has made it possible for consumers with privacy claims to sue any of these companies at will. Individual lawsuits favor lawyers over consumers, as they tie up businesses without effecting meaningful change.

Developed without input from California’s diverse business community, the CCPA may have severe unintended consequences for SMEs. In addition, companies will have less than six months to update their compliance programs for the new sweeping comprehensive privacy regime. Whether forthcoming amendments will help achieve the right balance between consumer and business interests remains to be seen. 

EU’s General Data Protection Regulation (GDPR): A Blueprint for Federal Action?

The EU’s GDPR, adopted in April 2016, reflects the distinct philosophies and needs of European businesses and consumers. It was developed over a longer period of time-based on in-depth research and wide-ranging input. The GDPR addresses both data privacy and data security, requiring customer consent regarding use of data and security measures that protect data. Unlike the CCPA, the GDPR granted businesses a period of two years to prepare compliance.

The GDPR is a comprehensive legislative framework, albeit substantially different from what U.S. legislators might come up with to drive innovation and economic growth here at home. The process that led to the GDPR was methodical, inclusive, and patient, and our legislators would do well to emulate it.

Yet even without the added complexity of patchwork laws, smaller companies with business interests in the EU bear an inordinate burden.

Larger U.S.-based firms have spent nearly $150 billion to ensure compliance with the GDPR, and Microsoft alone has assigned 1,600 engineers to the task. Unable or unwilling to bear the costs of ensuring compliance, many businesses have simply pulled out of the European market.

State and Federal Lawmakers Should Proceed with Caution

States’ rush to enact data privacy legislation is driven in part by a common perception among consumers that data privacy and data security are largely the same. But privacy (preventing unauthorized or undisclosed data sharing by a business) and security (preventing data theft by outsiders) are largely separate issues.

According to a recently released data privacy report from the C_TEC group, despite a dramatic increase in data breach incidents and volumes since 2005, fraud losses have dropped from $35 billion to under $15 billion during the same period. This suggests consumers are far more affected by cybersecurity and fraud prevention measures than they are by having their data exposed.

Don’t get me wrong: consumers have every reason and every right to be concerned about data privacy. But too hasty or heavy-handed an approach on the part of legislators in an attempt to ease constituents’ concerns may bring significant harm to businesses, consumers, and the economy.

If Congress is to act on this issue, any legislative proposals must reflect a thorough understanding and careful consideration of all stakeholders’ interests.

A Call to Action for Business Leaders: Get Ready, Get Involved

Data privacy legislation is inevitable. It’s also a mission-critical issue for businesses of all sizes. Small and midsize businesses in particular have a lot of decisions to make and work to do to ensure compliance using the resources they have (or with investments they’ll need to make).

I encourage you to educate yourself on the issues involved in the data privacy debate. Follow legislative developments. Go a step further, and become an influencer. Let your congressional representatives know where you stand. Remind them the General Accounting Office endorses a national data privacy law; even the FTC commissioner has publicly expressed support. This is a bipartisan issue, and federal legislation is a solution both parties can get behind.

We joined to U.S. Chamber to advocate for our clients, vendor partners, and similar businesses whose concerns need to be heard on Capitol Hill. By speaking out on behalf of a national data privacy law that benefits and protects both businesses and consumers, you can make a lasting impact. To learn more about what C_TEC is doing on data privacy and technology issues, visit www.americaninnovators.com.

NORTH ANDOVER, Mass. — F.H. Cann & Associates, Inc., an industry leader in the delivery of best-in-class recovery solutions, is pleased to announce the addition of Scott Dewitt to its management team as Director of Operations.  In this role, Scott will oversee the daily management of FHC’s Sharonville, OH operation.  

Mr. Dewitt has been in the accounts receivable management industry for over 30 years.  Throughout his career, he has held leadership positions with Sallie Mae (now known as Navient) and its affiliated companies.  Most recently, he was with Account Control Technology for 9 years where he managed numerous portfolios from the Bakersfield, CA location.    

Frank Cann, Chief Operating Officer of F.H. Cann & Associates stated, “We are extremely pleased to be able to welcome Scott to our exceptional leadership team.  With his proven track record and wealth of industry knowledge, our organization is confidently poised for the future and will continue to provide our clients with superior service and results.”   

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About F.H Cann

F.H. Cann & Associates (FHC) is an accounts receivable management company operating from its headquarters in the Greater Boston Area and a branch in the Greater Cincinnati Area. Incorporated in 1999 and licensed in all 50 States and Territories, FHC specializes in education, government, and banking/financial collections. On the government side, FHC works with departments at every level ranging from small municipalities to the Federal government.  On the banking/financial side, FHC serves multinational institutions and many other US national enterprises. More detail on www.FHCann.com.

Capital One Bank, headquartered in Mc Lean, Virginia, revealed a massive data breach in a news release on 29 July 2019. The bank says it does not appear that the hacker had used the stolen information for fraudulent purposes, but investigators will continue to look into it.

A hacker was able to gain access to Capital One’s systems and compromised the data of more than 100 million people.

The alleged hacker in question, Paige Thompson, was arrested the day the news release was published. FBI agents arrested Thompson in Seattle. She faces a federal charge of computer fraud and abuse. The FBI says Thompson appeared to brag about the hack online, which helped lead investigators to her.

Capital One explained that the data breach impacted more than 100 million credit card applications in the United States and another 6 million in Canada. It’s also estimated that approximately 140,000 Social Security numbers were compromised. The bank account numbers of about 80,000 customers were also put at risk.

In a news release, Capital One explained that the “largest category of information accessed was information on consumers and small businesses as of the time they applied for one of our credit card products from 2005 through early 2019. This information included personal information Capital One routinely collects at the time it receives credit card applications, including names, addresses, zip codes/postal codes, phone numbers, email addresses, dates of birth, and self-reported income.”

Capital One’s CEO, Richard Fairbank, added, “While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened. I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right.”

As Eric Trouman reported last week, the Stopping Bad Robocalls Act has passed the House and looks to have a big impact on the TCPA. While one of the most powerful aspects of the SBRA is the requirement that the FCC promptly complete its TCPA Public Notice proceeding, the SBRA would also make material changes to the language and effect of the TCPA, in and of itself. For those of you wondering what the NEW TCPA might look like, we provide the redline below.

Editor’s Note: Additions are bolded; deletions are crossed out.

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47 U.S. Code § 227. Restrictions on use of telephone equipment

(a) Definitions

As used in this section—

(1) The term “automatic telephone dialing system” means equipment which has the capacity—

(A)  to store or produce telephone numbers to be called, using a random or sequential number generator; and

(B)  to dial such numbers.

(2) The term “established business relationship”, for purposes only of subsection (b)(1)(C)(i), shall have the meaning given the term in section 64.1200 of title 47, Code of Federal Regulations, as in effect on January 1, 2003, except that—

(A) such term shall include a relationship between a person or entity and a business subscriber subject to the same terms applicable under such section to a relationship between a person or entity and a residential subscriber; and

(B) an established business relationship shall be subject to any time limitation established pursuant to paragraph (2)(G)).[1]

(3) The term “telephone facsimile machine” means equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to transmit that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper.

(4) The term “telephone solicitation” means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person, but such term does not include a call or message (A) to any person with that person’s prior express invitation or permission, (B) to any person with whom the caller has an established business relationship, or (C) by a tax exempt nonprofit organization.

(5) The term “unsolicited advertisement” means any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.

(6) The term “called party” means, with respect to a call, the current subscriber or customary user of the telephone number to which the call is made, determined at the time when the call is made.

(b) Restrictions on use of automated telephone equipment

(1) Prohibitions

It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—

(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice—

(i) to any emergency telephone line (including any “911” line and any emergency line of a hospital, medical physician or service office, health care facility, poison control center, or fire protection or law enforcement agency);

(ii) to the telephone line of any guest room or patient room of a hospital, health care facility, elderly home, or similar establishment; or

(iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States;

(B) to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes, is made solely pursuant to the collection of a debt owed to or guaranteed by the United States, or is exempted by rule or order by the Commission under paragraph (2)(B);

(C) to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless—

(i) the unsolicited advertisement is from a sender with an established business relationship with the recipient;

(ii) the sender obtained the number of the telephone facsimile machine through—

(I) the voluntary communication of such number, within the context of such established business relationship, from the recipient of the unsolicited advertisement, or

(II) a directory, advertisement, or site on the Internet to which the recipient voluntarily agreed to make available its facsimile number for public distribution,

except that this clause shall not apply in the case of an unsolicited advertisement that is sent based on an established business relationship with the recipient that was in existence before July 9, 2005, if the sender possessed the facsimile machine number of the recipient before July 9, 2005; and

(iii) the unsolicited advertisement contains a notice meeting the requirements under paragraph (2)(D),

except that the exception under clauses (i) and (ii) shall not apply with respect to an unsolicited advertisement sent to a telephone facsimile machine by a sender to whom a request has been made not to send future unsolicited advertisements to such telephone facsimile machine that complies with the requirements under paragraph (2)(E); or

(D) to use an automatic telephone dialing system in such a way that two or more telephone lines of a multi-line business are engaged simultaneously.

(2) Regulations; exemptions and other provisions

The Commission shall prescribe regulations to implement the requirements of this subsection. In implementing the requirements of this subsection, the Commission—

(A) shall consider prescribing regulations to allow businesses to avoid receiving calls made using an artificial or prerecorded voice to which they have not given their prior express consent;

(B) may, by rule or order, exempt from the requirements of paragraph (1)(B) of this subsection, subject to such conditions as the Commission may prescribe—

(i) calls that are not made for a commercial purpose; and

(ii) such classes or categories of calls made for commercial purposes as the Commission determines—

(I) will not adversely affect the privacy rights that this section is intended to protect; and

(II) do not include the transmission of any unsolicited advertisement;

(C) may, by rule or order, exempt from the requirements of paragraph (1)(A)(iii) of this subsection calls to a telephone number assigned to a cellular telephone service that are not charged to the called party, subject to such conditions as the Commission may prescribe as necessary in the interest of the privacy rights this section is intended to protect;

(D) shall provide that a notice contained in an unsolicited advertisement complies with the requirements under this subparagraph only if—

(i) the notice is clear and conspicuous and on the first page of the unsolicited advertisement;

(ii) the notice states that the recipient may make a request to the sender of the unsolicited advertisement not to send any future unsolicited advertisements to a telephone facsimile machine or machines and that failure to comply, within the shortest reasonable time, as determined by the Commission, with such a request meeting the requirements under subparagraph (E) is unlawful;

(iii) the notice sets forth the requirements for a request under subparagraph (E);

(iv) the notice includes—

(I) a domestic contact telephone and facsimile machine number for the recipient to transmit such a request to the sender; and

(II) a cost-free mechanism for a recipient to transmit a request pursuant to such notice to the sender of the unsolicited advertisement; the Commission shall by rule require the sender to provide such a mechanism and may, in the discretion of the Commission and subject to such conditions as the Commission may prescribe, exempt certain classes of small business senders, but only if the Commission determines that the costs to such class are unduly burdensome given the revenues generated by such small businesses;

(v) the telephone and facsimile machine numbers and the cost-free mechanism set forth pursuant to clause (iv) permit an individual or business to make such a request at any time on any day of the week; and

(vi) the notice complies with the requirements of subsection (d);

(E) shall provide, by rule, that a request not to send future unsolicited advertisements to a telephone facsimile machine complies with the requirements under this subparagraph only if—

(i) the request identifies the telephone number or numbers of the telephone facsimile machine or machines to which the request relates;

(ii) the request is made to the telephone or facsimile number of the sender of such an unsolicited advertisement provided pursuant to subparagraph (D)(iv) or by any other method of communication as determined by the Commission; and

(iii) the person making the request has not, subsequent to such request, provided express invitation or permission to the sender, in writing or otherwise, to send such advertisements to such person at such telephone facsimile machine;

(F) may, in the discretion of the Commission and subject to such conditions as the Commission may prescribe, allow professional or trade associations that are tax-exempt nonprofit organizations to send unsolicited advertisements to their members in furtherance of the association’s tax-exempt purpose that do not contain the notice required by paragraph (1)(C)(iii), except that the Commission may take action under this subparagraph only—

(i) by regulation issued after public notice and opportunity for public comment; and

(ii) if the Commission determines that such notice required by paragraph (1)(C)(iii) is not necessary to protect the ability of the members of such associations to stop such associations from sending any future unsolicited advertisements;

(G)         (i) may, consistent with clause (ii), limit the duration of the existence of an established business relationship, however, before establishing any such limits, the Commission shall—

(I) determine whether the existence of the exception under paragraph (1)(C) relating to an established business relationship has resulted in a significant number of complaints to the Commission regarding the sending of unsolicited advertisements to telephone facsimile machines;

(II) determine whether a significant number of any such complaints involve unsolicited advertisements that were sent on the basis of an established business relationship that was longer in duration than the Commission believes is consistent with the reasonable expectations of consumers;

(III) evaluate the costs to senders of demonstrating the existence of an established business relationship within a specified period of time and the benefits to recipients of establishing a limitation on such established business relationship; and

(IV) determine whether with respect to small businesses, the costs would not be unduly burdensome; and

(ii) may not commence a proceeding to determine whether to limit the duration of the existence of an established business relationship before the expiration of the 3-month period that begins on July 9, 2005; and ;

(H) may restrict or limit the number and duration of calls made to a telephone number assigned to a cellular telephone service to collect a debt owed to or guaranteed by the United States. ; and

(I) shall ensure that any exemption under subparagraph (B) or (C) contains requirements for calls made in reliance on the exemption with respect to—

              (i) the classes of parties that may make such calls;

              (ii) the classes of parties that may be called; and

(iii) the number of such calls that a calling party may make to a particular called party.             

(3) Private right of action

A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State—

(A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation,

(B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or

(C) both such actions.

If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.

(4) No citation required to seek forfeiture penalty

Paragraph (5) of section 503(b) shall not apply in the case of a violation made with the intent to cause such violation of this subsection.

(5) 4-year statute of limitations

Notwithstanding paragraph (6) of section 503(b), no forfeiture penalty for violation of this subsection shall be determined or imposed against any person if the violation charge occurred more than—

(A) 3 years prior to the date of issuance of the notice required by paragraph (3) of such section or the notice of apparent liability required by paragraph (4) of such section (as the case may be); or

(B) if the violation was made with the intent to cause such violation, 4 years prior to the date of issuance of the notice required by paragraph (3) of such section or the notice of apparent liability required by paragraph (4) of such section (as the case may be).

              (6) Increased penalty for violations with intent

In the case of a forfeiture penalty for violation of this subsection that is determined or imposed under section 503(b), if such violation was made with the intent to case such violation, the amount of such penalty shall be equal to an amount determined in accordance with subparagraphs (A) through (F) of section 503(b)(2) plus an additional penalty not to exceed $10,000.

(c) Protection of subscriber privacy rights

(1) Rulemaking proceeding required

Within 120 days after December 20, 1991, the Commission shall initiate a rulemaking proceeding concerning the need to protect residential telephone subscribers’ privacy rights to avoid receiving telephone solicitations to which they object. The proceeding shall—

(A) compare and evaluate alternative methods and procedures (including the use of electronic databases, telephone network technologies, special directory markings, industry-based or company-specific “do not call” systems, and any other alternatives, individually or in combination) for their effectiveness in protecting such privacy rights, and in terms of their cost and other advantages and disadvantages;

(B) evaluate the categories of public and private entities that would have the capacity to establish and administer such methods and procedures;

(C) consider whether different methods and procedures may apply for local telephone solicitations, such as local telephone solicitations of small businesses or holders of second class mail permits;

(D) consider whether there is a need for additional Commission authority to further restrict telephone solicitations, including those calls exempted under subsection (a)(3) of this section, and, if such a finding is made and supported by the record, propose specific restrictions to the Congress; and

(E) develop proposed regulations to implement the methods and procedures that the Commission determines are most effective and efficient to accomplish the purposes of this section.

(2) Regulations

Not later than 9 months after December 20, 1991, the Commission shall conclude the rulemaking proceeding initiated under paragraph (1) and shall prescribe regulations to implement methods and procedures for protecting the privacy rights described in such paragraph in an efficient, effective, and economic manner and without the imposition of any additional charge to telephone subscribers.

(3) Use of database permitted

The regulations required by paragraph (2) may require the establishment and operation of a single national database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations, and to make that compiled list and parts thereof available for purchase. If the Commission determines to require such a database, such regulations shall—

(A) specify a method by which the Commission will select an entity to administer such database;

(B) require each common carrier providing telephone exchange service, in accordance with regulations prescribed by the Commission, to inform subscribers for telephone exchange service of the opportunity to provide notification, in accordance with regulations established under this paragraph, that such subscriber objects to receiving telephone solicitations;

(C) specify the methods by which each telephone subscriber shall be informed, by the common carrier that provides local exchange service to that subscriber, of (i) the subscriber’s right to give or revoke a notification of an objection under subparagraph (A), and (ii) the methods by which such right may be exercised by the subscriber;

(D) specify the methods by which such objections shall be collected and added to the database;

(E) prohibit any residential subscriber from being charged for giving or revoking such notification or for being included in a database compiled under this section;

(F) prohibit any person from making or transmitting a telephone solicitation to the telephone number of any subscriber included in such database;

(G) specify (i) the methods by which any person desiring to make or transmit telephone solicitations will obtain access to the database, by area code or local exchange prefix, as required to avoid calling the telephone numbers of subscribers included in such database; and (ii) the costs to be recovered from such persons;

(H) specify the methods for recovering, from persons accessing such database, the costs involved in identifying, collecting, updating, disseminating, and selling, and other activities relating to, the operations of the database that are incurred by the entities carrying out those activities;

(I) specify the frequency with which such database will be updated and specify the method by which such updating will take effect for purposes of compliance with the regulations prescribed under this subsection;

(J) be designed to enable States to use the database mechanism selected by the Commission for purposes of administering or enforcing State law;

(K) prohibit the use of such database for any purpose other than compliance with the requirements of this section and any such State law and specify methods for protection of the privacy rights of persons whose numbers are included in such database; and

(L) require each common carrier providing services to any person for the purpose of making telephone solicitations to notify such person of the requirements of this section and the regulations thereunder.

(4) Considerations required for use of database method

If the Commission determines to require the database mechanism described in paragraph (3), the Commission shall—

(A) in developing procedures for gaining access to the database, consider the different needs of telemarketers conducting business on a national, regional, State, or local level;

(B) develop a fee schedule or price structure for recouping the cost of such database that recognizes such differences and—

(i) reflect the relative costs of providing a national, regional, State, or local list of phone numbers of subscribers who object to receiving telephone solicitations;

(ii) reflect the relative costs of providing such lists on paper or electronic media; and

(iii) not place an unreasonable financial burden on small businesses; and

(C) consider (i) whether the needs of telemarketers operating on a local basis could be met through special markings of area white pages directories, and (ii) if such directories are needed as an adjunct to database lists prepared by area code and local exchange prefix.

(5) Private right of action

A person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under this subsection may, if otherwise permitted by the laws or rules of court of a State bring in an appropriate court of that State—

(A) an action based on a violation of the regulations prescribed under this subsection to enjoin such violation,

(B) an action to recover for actual monetary loss from such a violation, or to receive up to $500 in damages for each such violation, whichever is greater, or

(C) both such actions.

It shall be an affirmative defense in any action brought under this paragraph that the defendant has established and implemented, with due care, reasonable practices and procedures to effectively prevent telephone solicitations in violation of the regulations prescribed under this subsection. If the court finds that the defendant willfully or knowingly violated the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.

(6) Relation to subsection (b)

The provisions of this subsection shall not be construed to permit a communication prohibited by subsection (b).

(d) Technical and procedural standards

(1) Prohibition

It shall be unlawful for any person within the United States—

(A) to initiate any communication using a telephone facsimile machine, or to make any telephone call using any automatic telephone dialing system, that does not comply with the technical and procedural standards prescribed under this subsection, or to use any telephone facsimile machine or automatic telephone dialing system in a manner that does not comply with such standards; or

(B) to use a computer or other electronic device to send any message via a telephone facsimile machine unless such person clearly marks, in a margin at the top or bottom of each transmitted page of the message or on the first page of the transmission, the date and time it is sent and an identification of the business, other entity, or individual sending the message and the telephone number of the sending machine or of such business, other entity, or individual.

(2) Telephone facsimile machines

The Commission shall revise the regulations setting technical and procedural standards for telephone facsimile machines to require that any such machine which is manufactured after one year after December 20, 1991, clearly marks, in a margin at the top or bottom of each transmitted page or on the first page of each transmission, the date and time sent, an identification of the business, other entity, or individual sending the message, and the telephone number of the sending machine or of such business, other entity, or individual.

(3) Artificial or prerecorded voice systems

The Commission shall prescribe technical and procedural standards for systems that are used to transmit any artificial or prerecorded voice message via telephone. Such standards shall require that—

(A) all artificial or prerecorded telephone messages (i) shall, at the beginning of the message, state clearly the identity of the business, individual, or other entity initiating the call, and (ii) shall, during or after the message, state clearly the telephone number or address of such business, other entity, or individual; and

(B) any such system will automatically release the called party’s line telephone line called within 5 seconds of the time notification is transmitted to the system that the called party has hung up answering party has hung up, to allow the called party’s line telephone line called to be used to make or receive other calls.

(e) Prohibition on provision of inaccurate caller identification information

(1) In general

It shall be unlawful for any person within the United States, in connection with any telecommunications service or IP-enabled voice service, to cause any caller identification service to knowingly transmit misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value, unless such transmission is exempted pursuant to paragraph (3)(B).

(2) Protection for blocking caller identification information

Nothing in this subsection may be construed to prevent or restrict any person from blocking the capability of any caller identification service to transmit caller identification information.

(3) Regulations

(A) In general

Not later than 6 months after December 22, 2010, the Commission shall prescribe regulations to implement this subsection.

(B) Content of regulations

(i) In general

The regulations required under subparagraph (A) shall include such exemptions from the prohibition under paragraph (1) as the Commission determines is appropriate.

(ii) Specific exemption for law enforcement agencies or court orders

The regulations required under subparagraph (A) shall exempt from the prohibition under paragraph (1) transmissions in connection with—

(I)  any authorized activity of a law enforcement agency; or

(II) a court order that specifically authorizes the use of caller identification manipulation.

(4) Repealed. Pub. L. 115–141, div. P, title IV, § 402(i)(3), Mar. 23, 2018, 132 Stat. 1089

(5) Penalties

(A) Civil forfeiture

(i) In general

Any person that is determined by the Commission, in accordance with paragraphs (3) and (4) of section 503(b) of this title, to have violated this subsection shall be liable to the United States for a forfeiture penalty. A forfeiture penalty under this paragraph shall be in addition to any other penalty provided for by this chapter. The amount of the forfeiture penalty determined under this paragraph shall not exceed $10,000 for each violation, or 3 times that amount for each day of a continuing violation, except that the amount assessed for any continuing violation shall not exceed a total of $1,000,000 for any single act or failure to act.

(ii) Recovery

Any forfeiture penalty determined under clause (i) shall be recoverable pursuant to section 504(a) of this title.

(iii) Procedure

No forfeiture liability shall be determined under clause (i) against any person unless such person receives the notice required by section 503(b)(3) of this title or section 503(b)(4) of this title. Paragraph (5) of section 503(b) shall not apply in the case of violation of this subsection.

(iv) 2-year 4-year statute of limitations

No forfeiture penalty shall be determined or imposed against any person under clause (i) if the violation charged occurred more than 2 years 4 years prior to the date of issuance of the required notice or notice or apparent liability.

(B) Criminal fine

Any person who willfully and knowingly violates this subsection shall upon conviction thereof be fined not more than $10,000 for each violation, or 3 times that amount for each day of a continuing violation, in lieu of the fine provided by section 501 of this title for such a violation. This subparagraph does not supersede the provisions of section 501 of this title relating to imprisonment or the imposition of a penalty of both fine and imprisonment.

(6) Enforcement by States

(A) In general

The chief legal officer of a State, or any other State officer authorized by law to bring actions on behalf of the residents of a State, may bring a civil action, as parens patriae, on behalf of the residents of that State in an appropriate district court of the United States to enforce this subsection or to impose the civil penalties for violation of this subsection, whenever the chief legal officer or other State officer has reason to believe that the interests of the residents of the State have been or are being threatened or adversely affected by a violation of this subsection or a regulation under this subsection.

(B) Notice

The chief legal officer or other State officer shall serve written notice on the Commission of any civil action under subparagraph (A) prior to initiating such civil action. The notice shall include a copy of the complaint to be filed to initiate such civil action, except that if it is not feasible for the State to provide such prior notice, the State shall provide such notice immediately upon instituting such civil action.

(C) Authority to intervene

Upon receiving the notice required by subparagraph (B), the Commission shall have the right—

(i) to intervene in the action;

(ii) upon so intervening, to be heard on all matters arising therein; and

(iii) to file petitions for appeal.

(D) Construction

For purposes of bringing any civil action under subparagraph (A), nothing in this paragraph shall prevent the chief legal officer or other State officer from exercising the powers conferred on that officer by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence.

(E) Venue; service or process

(i) Venue

An action brought under subparagraph (A) shall be brought in a district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28.

(ii) Service of process In an action brought under subparagraph

              (A)—

(I) process may be served without regard to the territorial limits of the district or of the State in which the action is instituted; and

(II) a person who participated in an alleged violation that is being  litigated in the civil action may be joined in the civil action without regard to the residence of the person.

(7) Effect on other laws

This subsection does not prohibit any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State, or a political subdivision of a State, or of an intelligence agency of the United States.

(8) Definitions For purposes of this subsection:

(A) Caller identification information

The term “caller identification information” means information provided by a caller identification service regarding the telephone number of, or other information regarding the origination of, a call made using a telecommunications service or IP-enabled voice service.

(B) Caller identification service

The term “caller identification service” means any service or device designed to provide the user of the service or device with the telephone number of, or other information regarding the origination of, a call made using a telecommunications service or IP-enabled voice service. Such term includes automatic number identification services.

(C) IP-enabled voice service

The term “IP-enabled voice service” has the meaning given that term by section 9.3 of the Commission’s regulations (47 C.F.R. 9.3), as those regulations may be amended by the Commission from time to time.

(9) Limitation

Notwithstanding any other provision of this section, subsection (f) shall not apply to this subsection or to the regulations under this subsection.

(f) Effect on State law

(1) State law not preempted

Except for the standards prescribed under subsection (d) and subject to paragraph (2) of this subsection, nothing in this section or in the regulations prescribed under this section shall preempt any State law that imposes more restrictive intrastate requirements or regulations on, or which prohibits—

(A) the use of telephone facsimile machines or other electronic devices to send unsolicited advertisements;

(B) the use of automatic telephone dialing systems;

(C) the use of artificial or prerecorded voice messages; or

(D) the making of telephone solicitations.

(2) State use of databases

If, pursuant to subsection (c)(3), the Commission requires the establishment of a single national database of telephone numbers of subscribers who object to receiving telephone solicitations, a State or local authority may not, in its regulation of telephone solicitations, require the use of any database, list, or listing system that does not include the part of such single national database that relates to such State.

(g) Actions by States

(1) Authority of States

Whenever the attorney general of a State, or an official or agency designated by a State, has reason to believe that any person has engaged or is engaging in a pattern or practice of telephone calls or other transmissions to residents of that State in violation of this section or the regulations prescribed under this section, the State may bring a civil action on behalf of its residents to enjoin such calls, an action to recover for actual monetary loss or receive $500 in damages for each violation, or both such actions. If the court finds the defendant willfully or knowingly violated such regulations, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under the preceding sentence.

(2) Exclusive jurisdiction of Federal courts

The district courts of the United States, the United States courts of any territory, and the District Court of the United States for the District of Columbia shall have exclusive jurisdiction over all civil actions brought under this subsection. Upon proper application, such courts shall also have jurisdiction to issue writs of mandamus, or orders affording like relief, commanding the defendant to comply with the provisions of this section or regulations prescribed under this section, including the requirement that the defendant take such action as is necessary to remove the danger of such violation. Upon a proper showing, a permanent or temporary injunction or restraining order shall be granted without bond.

(3) Rights of Commission

The State shall serve prior written notice of any such civil action upon the Commission and provide the Commission with a copy of its complaint, except in any case where such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. The Commission shall have the right (A) to intervene in the action, (B) upon so intervening, to be heard on all matters arising therein, and (C) to file petitions for appeal.

(4) Venue; service of process

Any civil action brought under this subsection in a district court of the United States may be brought in the district wherein the defendant is found or is an inhabitant or transacts business or wherein the violation occurred or is occurring, and process in such cases may be served in any district in which the defendant is an inhabitant or where the defendant may be found.

(5) Investigatory powers

For purposes of bringing any civil action under this subsection, nothing in this section shall prevent the attorney general of a State, or an official or agency designated by a State, from exercising the powers conferred on the attorney general or such official by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence.

(6) Effect on State court proceedings

Nothing contained in this subsection shall be construed to prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any general civil or criminal statute of such State.

(7) Limitation

Whenever the Commission has instituted a civil action for violation of regulations prescribed under this section, no State may, during the pendency of such action instituted by the Commission, subsequently institute a civil action against any defendant named in the Commission’s complaint for any violation as alleged in the Commission’s complaint.

(8) “Attorney general” defined

As used in this subsection, the term “attorney general” means the chief legal officer of a State.

(h) Junk fax enforcement report The Commission shall submit an annual report to Congress regarding the enforcement during the past year of the provisions of this section relating to sending of unsolicited advertisements to telephone facsimile machines, which report shall include—

(1) the number of complaints received by the Commission during such year alleging that a consumer received an unsolicited advertisement via telephone facsimile machine in violation of the Commission’s rules;

(2) the number of citations issued by the Commission pursuant to section 503 of this title during the year to enforce any law, regulation, or policy relating to sending of unsolicited advertisements to telephone facsimile machines;

(3) the number of notices of apparent liability issued by the Commission pursuant to section 503 of this title during the year to enforce any law, regulation, or policy relating to sending of unsolicited advertisements to telephone facsimile machines;

(4) for each notice referred to in paragraph (3)—

(A) the amount of the proposed forfeiture penalty involved;

(B) the person to whom the notice was issued;

(C) the length of time between the date on which the complaint was filed and the date on which the notice was issued; and

(D) the status of the proceeding;

(5) the number of final orders imposing forfeiture penalties issued pursuant to section 503 of this title during the year to enforce any law, regulation, or policy relating to sending of unsolicited advertisements to telephone facsimile machines;

(6) for each forfeiture order referred to in paragraph (5)—

(A) the amount of the penalty imposed by the order;

(B) the person to whom the order was issued;

(C) whether the forfeiture penalty has been paid; and

(D) the amount paid;

(7) for each case in which a person has failed to pay a forfeiture penalty imposed by such a final order, whether the Commission referred such matter for recovery of the penalty; and

(8) for each case in which the Commission referred such an order for recovery—

(A) the number of days from the date the Commission issued such order to the date of such referral;

(B) whether an action has been commenced to recover the penalty, and if so, the number of days from the date the Commission referred such order for recovery to the date of such commencement; and

(C) whether the recovery action resulted in collection of any amount, and if so, the amount collected.

(i) Annual report to the Congress on robocalls and transmission of misleading or inaccurate caller identification information

(1) Report Required

Not later than 1 year after the date of the enactment of this subsection, and annually thereafter, the Commission, after consultation with the Federal Trade Commission, shall submit to Congress a report regarding enforcement by the Commission of subsections (b), (c), (d), and (e) during the preceding calendar year.

(2) Matters for inclusion

Each report required by paragraph (1) shall include the following:

(A) The number of complaints received by the Commission during each of the preceding five calendar years, for each of the following categories:

(i) Complaints alleging that a consumer received a call in violation of subsection (b) or (c).

(ii) Complaints alleging that a consumer received a call in violation of the standards prescribed under subsection (d).

(iii) Complaints alleging that a consumer received a call in connection with which misleading or inaccurate called identification information was transmitted in violation of subsection (c).

(B) The number of citations issued by the Commission pursuant to section 503(b) during the preceding calendar year to enforce subsection (d), and details of each such citation.

(C) The number of notices of apparent liability issued by the Commission pursuant to section 503(b) during the preceding calendar year to enforce subsections (b), (c), (d), and (e), and details of each such notice including any proposed forfeiture amount.

(D) The number of final orders imposing forfeiture penalties issued pursuant to section 503(b) during the preceding calendar year to enforce such subsections, and details of each such order including the forfeiture imposed.

(E) The amount of forfeiture penalties or criminal fines collected, during the preceding calendar year, by the Commission or the Attorney General for violations of such subsections, and details of each case in which such a forfeiture penalty or criminal fine was collected.

(F) Proposals for reducing the number of calls made in violation of such subsections.

(G) An analysis of the contribution by providers of interconnected VoIP service and non-interconnected VoIP service that discount high-volume, unlawful, short-duration calls to the total number of calls made in violation of such subsections, and recommendations on how to address such contribution in order to decrease the total number of calls made in violation of such subsections.

              (3) No additional reporting required

The Commission shall prepare the report required by paragraph (1) without requiring the provision of additional information from providers of telecommunications service or voice service (as defined in section 7(d) of the Stopping Bad Robocalls Act).

(j) Information sharing

              (1) In general

Not later than 18 months after the date of the enactment of this subsection, the Commission shall prescribe regulations to establish a process that streamlines the ways in which a private entity may voluntarily share with the Commission information relating to –

                             (A) a call made or a text message sent in violation of subsection (b); or

(B) a call or text message for which misleading or inaccurate caller identification information was caused to be transmitted in violation of subsection (e)

              (2) Text message defined

              In this subsection, the term “text message” has the meaning given such term in subsection (e)(8).

(k) Robocall blocking service

              (1) In general

Not later that 1 year after the date of the enactment of this subsection, the Commission shall take a final agency action to ensure the robocall blocking services provided on an opt-out or opt-in basis pursuant to the Declaratory Ruling of the Commission in the matter of Advanced Methods to Target and Eliminate Unlawful Robocalls (CG Docket No. 17-59; FCC 19-51; adopted on June 6, 2019)–

              (A) are provided with transparency and effective redress options for both –

                             (i) consumers; and

                             (ii) callers; and

(B) are provided with no additional line item charge to consumers and no additional charge to callers for resolving complaints related to erroneously blocked calls.

              (2) Text message defined

              In this subsection, the term “text message” has the meaning given such term in subsection (e)(8).

(June 19, 1934, ch. 652, title II, § 227, as added Pub. L. 102–243, § 3(a), Dec. 20, 1991, 105 Stat. 2395; amended Pub. L. 102–556, title IV, § 402, Oct. 28, 1992, 106 Stat. 4194; Pub. L. 103–414, title III, § 303(a)(11), (12), Oct. 25, 1994, 108 Stat. 4294; Pub. L. 108–187, § 12, Dec. 16, 2003, 117 Stat. 2717; Pub. L. 109–21, §§ 2(a)–(g), 3, July 9, 2005, 119 Stat. 359–362; Pub. L. 111–331, § 2, Dec. 22, 2010, 124 Stat. 3572; Pub. L. 114–74, title III, § 301(a), Nov. 2, 2015, 129 Stat. 588; Pub. L. 115–141, div. P, title IV, § 402(i)(3), title V, § 503(a)(1)–(4)(A), Mar. 23, 2018, 132 Stat. 1089, 1091, 1092.)