October 30, 2014

The Echols Firm, LLC has been in business since October 25th, 2011.

I would like thank each client and friend of the firm for your support over the last three years. The firm remains focused on providing exceptional boutique legal services to creditors, debt collection agencies, and debt purchasers. With the ever increasing litigation and regulatory activity that threatens our industry, it is critical to have counsel that understands your specific needs and provides an aggressive and business minded approach to litigation and compliance. I often tell industry executives "you do not need to like attorneys, but you do need to trust one." We take great pride in being that trusted advisor to the collection industry and its executives. Everyone at the firm looks forward to remaining a valuable partner to our clients and friends.

Sincerely,

Chad V. Echols

Owner, The Echols Firm, LLC

The Commercial Law League of America's Eastern Region Conference will take place in New York City, NY from November 6th to November 8th. Chad will  take part in a panel on November 6th, along with Robert Perrin of Williams & Fudge, Inc. and John Bedard of Bedard Law Group, P.C. The panel will discuss student loan debt and compliance issues within the collection industry.

• Founded in 1895, the Commercial Law League of America ("CLLA") is North America's oldest creditor's rights organization. CLLA provides services to the business and credit community in legal, educational, and professional areas of the industry.

Back the Pack is a charity organization that provides children in need with nutritious, nonperishable food. The firm is excited to help fill the Packs for Rock Hill kids. Back the Pack volunteers gather at the Advanced Technology Center of Rock Hill from 8:30am to 10:00am on designated Community Pack Days.

For more information, please visit the Rock Hill School District Foundation's website: rhsdfoundation.org/back-the-pack

You can make a donation to the Foundation to support Back the Pack here.

A website called “facesoflawsuitabuse.org” has created a short video (linked below) addressing the ridiculous nature of many Telephone Consumer Protection Act (TCPA) lawsuits.  As most people involved in the collection industry are aware, TCPA litigation has exploded over the last few years.  TCPA attorneys have continued to take aim at the collection industry and now seem to also be focused on large creditors and other significant business entities.  The more attention provided to lawsuits like the one discussed in the video, the more likely it becomes that the TCPA is adjusted in a positive manner via regulation or legislation.  There needs to be a practical solution that allows 21^st century technology to be utilized in a fair and reasonable way without being inappropriately hitched to a law from 1991 that failed to foresee the ubiquitous nature of cellular telephones in 2014.

"LA Lakers 'Showtime' Threatened by Class Action Lawsuit"

Lynn v. Monarch Recovery Mgmt., Inc., CIV. WDQ-11-2824, 2013 WL 1247815 (D. Md. Mar. 25, 2013) on reconsideration in part, 953 F. Supp. 2d 612 (D. Md. 2013) and aff'd, 13-2358, 2014 WL 4922451 (4th Cir. Oct. 2, 2014)

In Lynn, the Fourth Circuit upheld the U.S. District Court for the District of Maryland’s decision that the collector violated the TCPA’s “call charged” provision.

The collector placed 37 calls to the consumer’s residential landline using an automated telephone dialing system (“ATDS”) without the consumer’s prior express consent.  Unbeknownst to the collector, the consumer had converted his residential landline service to Voice over Internet Protocal (“VoIP”).  The consumer was charged (in six-second increments) a monthly rate of $1.49 and $0.0149 per minute for each of the collector’s incoming calls.  The consumer called the collector twice to advise the collector that he received per-minute charges for phone calls.  The collector called the consumer three more times after that notice.

The consumer filed suit against the collector alleging violations of the TCPA, the Maryland Telephone Consumer Protection Act (“MDTCPA”) and the FDCPA.

In the District Court, both parties filed motions for summary judgment on all counts.  The parties stipulated the calls were made via “ATDS” as defined by the TCPA.  There was no evidence that the calls were made with the consumer’s prior express consent or for emergency purposes.  The consumer submitted evidence that his VoIP service provider charged him for each call placed to his landline.

The District Court found, “even assuming that [the collector’s] conduct was permissible under the residential telephone line provision, it was prohibited under the separate call charged provision.” 2013 WL 1247815 (D.Md. Mar. 25, 2013) at *11.  The Fourth Circuit affirmed. 2014 WL 4922451 (4th Cir. Oct. 2, 2014) at *1.

The TCPA “Call Charged” Provision

The “call charged” provision of the TCPA, § 227(b)(1)(A)(iii), prohibits persons from making any call, without the prior express consent of the called party, using any ATDS or artificial or prerecorded voice to any telephone number assigned to “any service for which the called party is charged for the call.” 2013 WL 1247815 (D.Md. Mar. 25, 2013) at *3.

The “call charged” provision appears at § 227(b)(1)(A)(iii), while the “residential telephone line” provision appears at § 227(b)(1)(B).

The “residential telephone line” provision prohibits persons from initiating calls 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 exempted by rule or order by the FCC.  TCPA § 227(b)(2)(B)(ii) authorizes the FCC to exempt from paragraph (1)(B) “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.”  With this authority, the FCC published 47 C.F.R. § 64.1200(a)(2)(iii), creating the familiar “established business relationship exemption,” whereby collectors have correctly been able to defend themselves from TCPA liability when calling consumer landlines using a dialer without express consent – until now (if VoIP is utilized by the consumer and the consumer is charged for the call).  2013 WL 1247815 (D. Md. Mar. 25, 2013) at *3.

In Lynn, the collector argued that the calls it made to the consumer were properly exempted from TCPA liability because the calls were made to a residential phone line for a commercial purpose without any solicitation – pursuant to the “established business relationship exemption.”  The Fourth Circuit affirmed the District Court’s determination that the TCPA’s “call charged” provision is wholly distinct from the TCPA’s residential phone line provision and the FCC’s exemption for calls related to an established business relationship.  “[E]ven assuming that [the consumer’s] use of VoIP service did not fundamentally change the nature of his residential telephone line, [the consumer] has established that the service charged him for the calls. [The consumer’s] TCPA claim thus fits squarely within the separate, prohibition of the call charged provision.”  2013 WL 1247815 (D. Md. Mar. 25, 2013) at *7.

The Take-Away

Obtaining and documenting the consumer’s prior express consent is the cornerstone to defending any TCPA claim.  Case law is developing towards a broader definition of consent.  Whenever an entity engages in any sort of automated dialing or prerecorded messaging, entities should continue to press clients for specific TCPA consent language in all consumer credit agreements that eventually lead to the collection account.  Also, it remains important to remember how lucrative TCPA claims have become for the consumer bar.  TCPA claims have grown at a rapid pace over the last few years.  If you have questions regarding this case or its application to your practices, please contact the firm.