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Iain Duke-Richardet

How the Supreme Court’s Auto-Dialer Ruling Impacts Future TCPA Litigation

“In sum, Congress’ definition of an autodialer requires that in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator.” Facebook v. Duguid, Case No. 19-511

The April 1 Supreme Court ruling, applicable to both placing telephone calls and sending text messages, adopts the narrower of the prevailing interpretations regarding the applicability of the Telephone Consumer Protection Act (TCPA). Specifically, the requirement to obtain prior consent from a recipient rests on whether a system is an auto-dialer or not. To be deemed an auto-dialer, the Supreme Court found that a system “must use a random or sequential number generator.”

This narrower interpretation means that telephone and texting solutions which lack the capacity to generate random or sequential numbers no longer qualify as an auto-dialer; consequently, a substantially smaller portion of previously covered communications will now be regulated under TCPA. Because the Hearsay platform does not contain components—in Relate, or elsewhere—that use a random or sequential number generator, the platform would not be deemed an auto-dialer. Use of the platform is consequently not predicated on customer consent prior to calling or sending text messages.

Note that the Supreme Court ruling is not viewed as a positive by all, and the legislature may yet enact new rules to restrict the new standard. Additionally, while eliminating the obligation to obtain consent facilitates communication, the following remain true:

  1. Existing policies regarding the use of text messaging (i.e., consent is required) will need to be updated before or concurrent with any process change
  2. Certain limitations remain: pre-recorded calls require consent; ‘Do Not Call’ filters must still be applied
  3. Financial Services rules persist – including the tenets of FINRA’s Communications with the Public rule (solicitation times; advertising rules; suitability)
  4. Carriers block calls that they believe are spam; increased use could result in calls or text messages being blocked.
    If communications become out of control, Congress—or worse, the states—could write new laws to address industry practices, resulting in a patchwork of state requirements that could become tremendously cumbersome.

    Ensuring compliance in a dynamic regulatory environment may be challenging, but we’re here to help. Should you require any guidance with respect to this new ruling, please don’t hesitate to reach out to Hearsay’s in-house Compliance practice.
Iain Duke-Richardet

Iain Duke-Richardet

As Compliance Strategy Principal, Iain is responsible for guiding Hearsay’s 100+ global financial firm customers around the ever-evolving regulatory landscape. Iain is actively engaged with Hearsay’s customers and product teams and is focused on addressing new complexities as a strategic advantage to firms’ digital client experience initiatives.

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