In 1991, Congress enacted the Telephone Consumer Protection Act (TCPA) which specifically prohibits the use of auto-dialers in making calls to a wireless number without the prior express consent of the person being called. The only exception to this rule is in the case of an emergency. One of the main reasons for this Act is the fact that owners of wireless phones are often charged for their incoming calls as well as the calls that they make. This means that, aside from being annoying and potentially time consuming, the telemarketing calls are also costing their targets money out of pocket.
Despite the institution of this Act, companies appear to be unwilling to cooperate, as evidenced by the fact that companies which use auto-dialers to contact potential customers are still thriving. One of these companies is Variable Marketing, LLC and it has recently been hit with a class action lawsuit alleging violations of the TCPA.
Filed in the District Court for the Northern District of Illinois, the lawsuit names American Automobile Association, Inc.; Farmers Group, Inc.; Government Employees Insurance Company; Nationwide Mutual Insurance Company; State Farm Mutual Automobile Insurance Company; and Variable Marketing, LLC as defendants. All of these defendants allegedly used a lead-generator marketing company (Variable Marketing), to market their services in violation of the TCPA.
The plaintiffs are five consumers who received calls from Variable on their cell phones. When they answered or returned the calls, a pre-recorded message played before they were able to reach a live operator. According to the lawsuit, only one of the five plaintiffs had ever had any business dealings with any of these insurance companies prior to receiving the call and none of them had expressed their consent to receive these calls. The plaintiffs are seeking statutory damages and injunctive relief under the TCPA.
The proposed class is defined as “All persons within the United States who received a non-emergency telephone call from Variable, placed while Variable was acting on behalf of the Insurance Company Defendants, to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice.”
This proposed class could end up consisting of tens of thousands of members. Under the law, each of those members is entitled to up to $1,500 for each call that they received from Variable. This brings the total award sought by the plaintiffs to over $5,000,000, not including interest and attorneys’ fees.
Despite the fact that Variable is the company which actually placed the calls using an auto-dialer, all of the companies for which Variable did this are responsible for having violated the TCPA. The Federal Communications Commission (FCC), the agency which Congress put in charge of regulating and implementing the TCPA, determined that “a company on whose behalf a telephone solicitation is made bears the responsibility of any violations.” According to the FCC, the seller and the telemarketer do not need a contract in order for the seller to be liable. All that the FCC requires is that the telemarketer have “the apparent (if not actual) authority” to make the calls.
A representative of Variable told one of the plaintiffs that he was calling on behalf of “lots of the big [insurance companies], including Geico and AAA.” This suggests that Variable was given authority to use the Insurance Company Defendants’ trade name, trademark and service marks. This fulfills the requirement of “apparent (if not actual) authority” for holding the insurance companies accountable for the damages incurred as a result of their violation of the TCPA.