Calls and Text Messages to Customers: The Growing Concern of the TCPA

03.23.17

Modern technology provides banks with a variety of tools to communicate with customers, including text messaging, social media, and autodialed calls. Banks use these methods of communication, and rightfully so, to provide valuable information to customers. This may include, for example, alerting customers to fraudulent activity, providing payment reminders, and marketing new products. While it’s important to integrate these communication channels into your business, it’s also critical to understand the type of customer consent required under the Telephone Consumer Protection Act (TCPA) before initiating such communications. Failure to comply with the TCPA can be substantial, as penalties range from $500 to $1500 per violation (per call).

If your bank uses or is considering using one of the following mechanisms to communicate with customers, these communications will be governed by the TCPA:

• Text messages
• Calls to landlines or cell phones using an autodialer
• Calls to landlines or cell phones using a pre-recorded or artificial voice

Put simply, if your bank uses or plans to use these communication channels for telemarketing or advertising purposes, you have more obstacles to tackle before initiating communication with your customer. Specifically, the bank must obtain a customer’s prior express written consent. This level of consent requires the following:

• Written agreement
• Signature of person called
• The following ​“clear and conspicuous” disclosure: 
  • “By executing this agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or pre-recorded voice; and
  • The person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.”
• Telephone number authorized to receive such messages

Though the TCPA does not prescribe how to capture a consumer’s written consent, a best practice is to consider a standalone agreement for both legal and practical reasons. 

Comparatively, if your bank does not plan to use these channels for telemarketing or advertising communications, the bank has, more than likely, already obtained required consent from the customer. Specifically, for these contacts, which include, for example, debt collection or checking account notifications (e.g. insufficient funds alerts), prior express (non-written) consent is required. Interpretative Orders issued by the Federal Communications Commission have stated that obtaining a cell phone number from a consumer (e.g. in the Account Signature Card), is sufficient to obtain prior express consent. No additional disclosures are required to be provided by the Bank and, furthermore, no contractual agreement between the Bank and consumer is required by law. Put simply, no additional documents are required, nor is document modification necessary. 

Notably, several types of contacts are exempt from TCPA. These contacts include notifying customers of a data security breach, identity theft, or suspected or actual fraudulent activity on the customer’s account. Additionally, contacts related to a customer’s money transfer are also exempt. In order to take advantage of these exemptions, however, a bank must adhere to prescriptive requirements including, for example, a limitation on the frequency of contacts, content requirements and formatting restrictions for text messages. Given the onerous nature of these requirements, a bank may alternatively wish to comply with TCPA for non-telemarketing/advertising contacts and simply obtain a customer’s cell phone number.

Finally, a bank should consider whether its systems and its people are equipped to manage varying levels of customer consent along with opt-outs (permitted at ​“any time” by ​“any reasonable means”). These people, process, technology considerations will be key to complying with the TCPA.

• General