[Senate Hearing 114-560]
[From the U.S. Government Publishing Office]









                                                        S. Hrg. 114-560

 THE TELEPHONE CONSUMER PROTECTION ACT AT 25: EFFECTS ON CONSUMERS AND 
                                BUSINESS

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 18, 2016

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 18, 2016.....................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................     3
Statement of Senator McCaskill...................................    60
Statement of Senator Blunt.......................................    62
Statement of Senator Klobuchar...................................    64
Statement of Senator Daines......................................    66
Statement of Senator Blumenthal..................................    68
Statement of Senator Markey......................................    70



    Letter dated February 10, 2016, to Hon. John Thune and Hon. 
      Bill Nelson from Greg Zoeller, Indiana Attorney General; 
      Mark Brnovich, Arizona Attorney General; George Jepsen, 
      Connecticut Attorney General; Doug Chin, Hawaii Attorney 
      General; Andy Beshear, Kentucky Attorney General; Brian 
      Frosh, Maryland Attorney General; Chris Koster, Missouri 
      Attorney General; Cynthia H. Coffman, Colorado Attorney 
      General; Karl A. Racine, District of Columbia Attorney 
      General; Derek Schmidt, Kansas Attorney General; Janet 
      Mills, Maine Attorney General; Maura Healey, Massachusetts 
      Attorney General; Lori Swanson, Minnesota Attorney General; 
      Tim Fox, Montana Attorney General; Hector Balderas, New 
      Mexico Attorney General; Roy Cooper, North Carolina 
      Attorney General; Peter F. Kilmartin, Rhode Island Attorney 
      General; Sean Reyes, Utah Attorney General; Robert W. 
      Ferguson, Washington Attorney General; Jim Hood, 
      Mississippi Attorney General; Joseph Foster, New Hampshire 
      Attorney General; Eric T. Schneiderman, New York Attorney 
      General; Ellen F. Rosenblum, Oregon Attorney General; 
      Herbert H. Slatery III, Tennessee Attorney General; and 
      William H. Sorrell, Vermont Attorney General...............    72
    Letter dated November 2, 1015, from the Alliance for a Just 
      Society; Americans for Financial Reform; Center for Digital 
      Democracy; Consumer Action; Consumer Federation of America; 
      Consumers Union; The Institute for College Access & Success 
      and its Project on Student Debt; Mid-Minnesota Legal Aid; 
      NAACP; National Association of Consumer Bankruptcy 
      Attorneys; National Consumer Law Center on behalf of its 
      low-income clients; National Association of Consumer 
      Advocates; North Carolina Justice Center; Woodstock 
      Institute; US PIRG; and Virginia Poverty Law Center in 
      support of the HANGUP Act..................................    75

                               Witnesses

Hon. Greg Zoeller, Attorney General, State of Indiana............     4
    Prepared statement...........................................     6
Becca Wahlquist, Partner, Snell & Wilmer L.L.P., on behalf of the 
  U.S. Chamber Institute of Legal Reform and U.S. Chamber of 
  Commerce.......................................................     7
    Prepared statement...........................................    10
Margot Saunders, Of Counsel, National Consumer Law Center........    23
    Prepared statement...........................................    25
Richard Lovich, National Legal Counsel, American Association of 
  Healthcare Administrative Management...........................    41
    Prepared statement...........................................    43
Monica S. Desai, Partner, Squire Patton Boggs....................    45
    Prepared statement...........................................    47

                                Appendix

Letter dated May 17, 2016, to Hon. John Thune and Hon. Bill 
  Nelson from Debra J. Chromy, Ed.D., President, Education 
  Finance Council (EFC); James P. Bergeron, President, National 
  Council of Higher Education Resources (NCHER); and Winfield P. 
  Crigler, Executive Director, Student Loan Servicing Alliance 
  (SLSA).........................................................    79
Letter dated May 17, 2016, to Hon. John Thune and Hon. Bill 
  Nelson from ACA International, American Association of 
  Healthcare Administrative Management (AAHAM), American 
  Financial Services Association (AFSA), American Insurance 
  Association (AIA), 1Coalition of Higher Education Assistance 
  Organizations (COHEAO), Consumer Bankers Association (CBA), 
  Electronic Transactions Association (ETA), Financial Services 
  Roundtable (FSR), Florida Chamber of Commerce, Florida Justice 
  Reform Institute (FJRI), Indiana Chamber of Commerce, Las Vegas 
  Metro Chamber of Commerce, Missouri Chamber of Commerce and 
  Industry, Montana Chamber of Commerce, National Association of 
  Chain Drug Stores (NACDS), National Association of Mutual 
  Insurance Companies (NAMIC), National Restaurant Association 
  (NRA), National Retail Federation (NRF), Newspaper Association 
  of America (NAA), Oregon Liability Reform Coalition (ORLRC), 
  Professional Association for Consumer Engagement (PACE), Retail 
  Industry Leaders Association (RILA), Satellite Broadcasting and 
  Communications Association (SBCA), SLSA Private Loan Committee, 
  South Carolina Civil Justice Coalition (SCCJC), State Chamber 
  of Oklahoma, Student Loan Servicing Alliance (SLSA), Texas 
  Civil Justice League (TCJL), U.S. Chamber of Commerce (USCC), 
  U.S. Chamber Institute for Legal Reform (ILR), Washington 
  Liability Reform Coalition, Wisconsin Manufacturers & Commerce 
  (WMC), and West Virginia Chamber of Commerce...................    80
Prepared statement of America's Health Insurance Plans (AHIP)....    81
Prepared statement on behalf of the American Bankers Association, 
  Consumer Bankers Association, Credit Union National 
  Association, Financial Services Roundtable, Independent 
  Community Bankers of America, and National Association of 
  Federal Credit Unions..........................................    83
Letter dated June 1, 2016, to Hon. John Thune and Hon. Bill 
  Nelson from Sarah E. Ducich, Senior Vice President, Public 
  Policy and Government Relations, Navient.......................    89
Response to written questions submitted to Hon. Greg Zoeller by:
    Hon. John Thune..............................................    93
    Hon. Deb Fischer.............................................    94
    Hon. Steve Daines............................................    94
    Hon. Maria Cantwell..........................................    95
    Hon. Cory Booker.............................................    95
Response to written questions submitted to Becca Wahlquist by:
    Hon. John Thune..............................................    97
    Hon. Deb Fischer.............................................   101
Response to written questions submitted to Margot Saunders by:
    Hon. John Thune..............................................   102
    Hon. Deb Fischer.............................................   103
    Hon. Steve Daines............................................   104
    Hon. Maria Cantwell..........................................   105
    Hon. Amy Klobuchar...........................................   106
    Hon. Cory Booker.............................................   106
Response to written questions submitted to Richard Lovich by:
    Hon. John Thune..............................................   107
    Hon. Roy Blunt...............................................   110
Response to written questions submitted to Monica S. Desai by:
    Hon. John Thune..............................................   110
    Hon. Deb Fischer.............................................   114
    Hon. Steve Daines............................................   115

 
                   THE TELEPHONE CONSUMER PROTECTION
                    ACT AT 25: EFFECTS ON CONSUMERS
                              AND BUSINESS

                              ----------                              


                        WEDNESDAY, MAY 18, 2016

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:12 a.m., in 
room SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Blunt, Fischer, 
Sullivan, Heller, Gardner, Daines, Nelson, Cantwell, McCaskill, 
Klobuchar, Blumenthal, Markey, Booker, and Manchin.

             OPENING STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    The Chairman. This hearing will get underway. My apologies 
for being tardy. I'm running around a lot today already, so I 
thank you all for your patience. And welcome you to today's 
hearing on the Telephone Consumer Protection Act.
    When passing TCPA nearly 25 years ago, Congress expressly 
sought a balanced approach that protects the privacy of 
individuals and permits legitimate telemarketing practices. As 
a result of TCPA, a number of abusive and disruptive 
telemarketing practices have been significantly reduced or 
eliminated. For example, companies have to maintain Do Not Call 
lists and cannot make solicitation calls before 8 a.m. or after 
9 p.m.
    But, TCPA is also showing its age, and there are 
opportunities to build on its consumer benefits while also 
ensuring consumers fully benefit from modern communications. 
Consumers should be able to take advantage of new technologies 
that help them avoid falling victim to unscrupulous actors and 
those callers who ignore Do Not Call requirements. I doubt 
there's a person in this room who has not received a recorded 
voice on their mobile phone telling them that they've won a 
cruise. We should also ensure that the FCC continues to take 
action against abusive and harassing practices, and has the 
tools it needs to bring bad actors to justice, including those 
operating from overseas.
    We recently took a step in this direction by unanimously 
approving Ranking Member Nelson and Senator Fischer's anti-
spoofing legislation as part of the FCC Reauthorization Act. 
But, our discussion today is not only about policing abusive 
and harassing practices and stopping bad actors. We must also 
acknowledge that most businesses are trying to do the right 
thing and play by the rules. And we need to understand whether 
TCPA is inadvertently hurting the good actors and consumers.
    When Congress passed TCPA, cell phones were uncommon and 
mobile telephone service was extremely expensive. It made sense 
to have particularly strict rules about contacting people on 
their mobile phones. Today, however, mobile phones are not only 
ubiquitous, they are actually smart devices that do much more 
than just send and receive phone calls. Consumer behavior is 
also far different than it was back in 1991. In fact, today's 
consumer expectations about communications connectivity and the 
benefits of better contact with their doctors, schools, 
favorite charities, and, yes, even their lenders, would be 
unrecognizable to Congress 25 years ago. More than 90 percent 
of Americans now have a mobile phone, and nearly half of all 
households in the United States are mobile-only. These 
percentages are even higher for young adults. Simply put, if 
you can't reach these people on their mobile phones, you're 
going to have a hard time reaching them at all. The balance 
forged decades ago may now be missing the mark, and consumers 
may be missing the benefits of otherwise reasonable and 
legitimate business practices.
    The Federal Communications Commission was tasked by 
Congress with assuring a balanced application of TCPA. The 
Commission, however, has struggled to apply TCPA to a changing 
communications marketplace, and the agency actually seems to be 
creating more imbalances and more uncertainty. The Commission's 
rules have created new questions rather than answers. For 
example, what is an auto-dialer? The Commission will not answer 
that clearly, and, instead, only says it's something other than 
a rotary-dialed telephone. The FCC declared last year that it 
would not address the exact contours of the auto-dialer 
definition or seek to determine comprehensively each type of 
equipment that falls within that definition. Hospitals, 
charities, utilities, banks, and restaurants should not have to 
engage engineers and telecommunications attorneys in order to 
know if they can call their customers without being sued.
    Another example is what to do if a customer's number has 
been reassigned. While the FCC claims to have addressed this 
issue, companies say there is still no way to know with 
certainty. What is certain, however, is that, if a phone number 
has been reassigned and you call it more than once, you have--
you could be liable for $500 per call, even if the new party 
never answers.
    TCPA litigation has also become a booming business. TCPA 
cases are the second most filled type of case in Federal 
courts, with 3,710 filed last year alone. That represents a 45-
percent increase over 2014. And the companies affected by an 
unbalanced TCPA may surprise you. For example, Twitter stated 
the following in a filing at the FCC, and I quote, ``As the 
result of this hyper-litigious environment, innovative 
companies increasingly must choose between denying consumers 
information that they have requested or being targeted by TCPA 
plaintiffs' attorneys filing shakedown suits. No company should 
be put to such a choice.''
    The cost of getting the balance wrong isn't just burdensome 
litigation, it is also the cost to consumers and to the economy 
of the important consumer contact that is not being made, for 
fear of running afoul of an ill-defined rule. Text messages to 
let parents know about weather-related cancellations, calls to 
struggling low-income households know how to keep the heat from 
getting cutoff, calls to alert borrowers that they're at risk 
of defaulting on their debts and ruining their credit ratings, 
and follow-up calls to patients to make sure they understand 
their post-discharge treatment plans.
    Another specific matter that will be discussed today is the 
Obama administration's carve-out to allow robocalls to mobile 
phones to collect debts owed to or guaranteed by the Federal 
Government. The administration used last year's must-pass 
Bipartisan Budget Act as a vehicle to achieve its robocall 
carve-out. The Committee reached out to the Office of 
Management and Budget, the Department of the Treasury, and the 
Department of Education to testify about why the administration 
has prioritized this robocall carve-out for years. 
Unfortunately, the Obama administration is not represented 
before us today, but we will continue to seek its input as its 
robocall carve-out is implemented by the FCC and as the 
Committee continues its oversight of TCPA.
    Ultimately, finding the right balance is essential to 
protecting the privacy of consumers while making sure that they 
have reasonable access to the information they want and need 
and making sure good-faith business actors can reasonably 
assess the cost of doing business.
    We have a variety of perspectives represented on the panel 
before us today, and I look forward to hearing your testimony, 
and appreciate your participation. Thank you.
    I'll recognize the Senator from Florida, our Ranking 
Member, Senator Nelson.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Mr. Chairman, if you go anywhere in this 
country and you ask a consumer, ``Do you want to receive 
robocalls?'' or you ask them, ``Would you like to receive 
robocalls on your cell phone?''--you may get the cell phone 
thrown at you. There are few things that unite our countrymen 
and -women like the distaste for robocalls that are 
interrupting them at dinnertime, in the middle of driving--I 
mean, it goes on and on. It's a sentiment that nearly all of us 
share, and that's why, for the last 25 years, the laws have 
sided with consumers. The number of consumer complaints about 
robocalls, regardless of the laws, continue to increase. The 
FCC receives tens of thousands of robocall complaints every 
month. And we all have stories to tell.
    One of our friends signed up for a landline service one 
morning, and, by the afternoon, before he had given his new 
number to his family and friends, his phone was being flooded 
by robocalls. So, he gave up the landline. In fact, how many of 
us know friends at home that have given up the landline and 
just used the cell phone, for that exact same reason? They 
don't want the robocalls. Most of us, our cell phone is our 
lifeline, and if we allow those annoying robocalls to begin 
freely bombarding folks, where do consumers go to escape the 
harassment?
    So, what would happen on mobile phones is that they would 
start to ignore the calls from unknown numbers so they don't 
have to hear another recording, only to miss an important call. 
Or what about the senior citizens? And how about low-income 
Americans? Many of those consumers have calling plans that are 
restricted in the number of minutes that they can use every 
month. So, opening the floodgates of wireless robocalls to 
those individuals would have an immediate adverse effect.
    Or what about driving down the road, just like I was this 
morning, dodging in and out of traffic, coming across the 395 
bridge, people cutting in front of me and me having to slam on 
the brakes, and suddenly you get a call, and you want to answer 
it, but it's not something important. It's a robocall. And 
therefore, leading to distracted driving. And where would all 
of that end?
    The frustration is there also because of fraudulent 
callers. Scammers are always going to be a problem. We have 
tried to address that directly in a bipartisan way with the 
Chairman, thanks to his leadership. Senator Fischer and I have 
teamed up on our bill to combat spoofing. I'd also like us to 
see a revamped, improved Do Not Call List.
    Now, obviously, there are legitimate businesses and other 
reasons to call consumers on their wireless phones. But, 
there's already an answer to that. Just get the consumers' 
consent. That has been the law since 1991. In this bubble of 
Washington, policymakers are often in danger of losing sight to 
what is actually out there in America. And there's no doubt. 
Ask that question of any American consumer.
    So, I want to thank you, Mr. Chairman, for calling this 
hearing to shed light on the distaste of American consumers 
about these annoying calls.
    The Chairman. Thank you, Senator Nelson.
    All right, we'll get underway. We have with us today The 
Honorable Greg Zoeller, who's the Attorney General for the 
State of Indiana; Ms. Becca Wahlquist, testifying on behalf of 
the U.S. Chamber Institute of Legal Reform; Ms. Margot 
Saunders, with the National Consumer Law Center; Mr. Rich 
Lovich, testifying on behalf of the American Association of 
Healthcare Administrative Management; and Ms. Monica Desai, 
who's a Partner at Squire Patton Boggs law firm.
    So, we'll start on my left, and your right, with Mr. 
Zoeller. Please proceed. And welcome to the Committee.

       STATEMENT OF HON. GREG ZOELLER, ATTORNEY GENERAL, 
                        STATE OF INDIANA

    Mr. Zoeller. Thank you, Mr. Chairman and members of the 
Committee. I appreciate the opportunity to come and be heard.
    I'll pick up where Senator Nelson left off, that we do, in 
the state of Indiana, receive remarkable number of complaints 
each year. I think last year it was somewhere around 14,000 
calls, well the largest number of complaints in our consumer 
protection area. Over half of those complaints were about 
robocalls specifically.
    Indiana has a unique statute that was passed in 1988 that 
prohibits the use of the autodialer to make calls to consumers. 
And this is across the board. We've successfully defended that 
statute up through the Federal courts, up to the 7th Circuit 
Court of Appeals, really talking about how we do not allow 
these calls for any--other than those that, like Senator Nelson 
mentioned, have opted in. So, the schools and the pharmacies 
and the people that you referred to, in terms of important 
calls, have opted in, and we do have those that are still being 
heard.
    But, I think the points that I want to make, I'll--I've got 
written testimony that I've submitted, but I'll kind of 
summarize briefly that, really, the focus of our attention has 
been on maintaining the protection of our own statutes. So, the 
recent budget bill that you mentioned that had the exception 
for Federal debt now challenges the ability of our state to 
defend our own statute. Since we did not have any exceptions, 
we can claim that there are no, let's say, unconstitutional 
acts on the part of the state, so now that we have this new 
exception for Federal debt, I know the case that's recently 
filed by the American Association of Political Consultants 
challenges the constitutionality. And, according to our read of 
the 7th Circuit Court of Appeals in our own defense, I think 
we've got risks now whether that exception might raise the 
question about whether it's unconstitutionally distinguishing 
between certain types of calls. So, we have a blanket 
exception. It has been very effective. And we have been able to 
defend, but based on the fact that we did not have those types 
of exceptions that now the Federal Government has allowed.
    Just briefly, I'll say that, you know, in the last month 
alone, according to YouMail, which is a national robocall 
index, they estimate that 2.5 billion robocalls were made in 
the month of March. So, again, the barrage of this--I, quite 
frankly, had to ask my staff whether that was a legitimate 
number, because I couldn't believe it. But, unless someone 
wants to argue the other side, I'll just leave it that that's 
the only number we've got, in terms of the volume of these.
    We do have a very specific sense of what a robocall, the 
autodialer, is. When it can blast out 10,000 calls per minute, 
it's a robocaller. And when you say that you get a call on a 
new line, it's not that they actually called you; they called 
everybody in the area code. So, within an hour and a half, you 
can literally call everybody in Washington, D.C.
    We've heard from a number of companies that they really 
need the opportunity to call cell phones. But, again, I will 
side with Senator Nelson's view that we--that's the last link, 
in terms of the ability to communicate, since most of us have 
long since pulled out our landline due to the robocalling 
abuse. And again, most of it's from overseas, so, again, not 
something that either State attorneys general or the Federal 
Government can address.
    Frankly, the problems that we have with robocalls, I've 
warned all the citizens of our state that, if it's a robocall, 
you should assume it's a scam artist. It's really the best tool 
for scam artists. So, anytime you see these calls, we've 
trained the people of Indiana, hang up as quickly as you can, 
because, frankly, anything you say or do, even just staying on 
the line, will actually be sold to others. The information that 
you're going to be home on a Wednesday at 10:30 is now known by 
the people who have done the robocalling, and they sell that to 
others that may want to use other techniques to call you at 
that same time and place, knowing that you'll be home, the 
likelihood. And again, the risk to seniors is really where we 
see this. The use of this technology to collect data, when 
you--we talk about scam artists, you're really talking about 
the old version of a confidence man. The more they understand 
about you, the more they can win over your confidence. And 
knowing when you're going to be home, time, place, and the 
ability to target people with the amount of information, the 
risk to consumers are not just the harassment; this is the 
number-one tool to gain the information that the scam artists 
are using to bilk particularly the seniors in our state.
    I'll, finally, just say that we were very disappointed with 
the exception that was carved out. Without this type of 
hearing--we're having a hearing after-the-fact of the budget 
bill, which, again, the Chairman noticed that it was put in 
without really this kind of attention--we're--I'm representing, 
now, 25 attorneys general who have asked that you take up the 
HANGUP Act, which would take that back out. So, while we've 
made an exception, which, again, risks the constitutionality 
defense, plus you're targeting particularly the younger 
students who are using their cell phone, and now that we've 
managed to run up a 1.3 trillion dollars of student loan debt, 
again, that's going to be the number-one target. So, we're very 
worried about where this ends. We're against creating a safe 
harbor, a number of reasons we can go through.
    But, finally, I would just say that the point that--for 
years, 25 years now, of having the TCPA, there has always been 
the opportunity for legitimate businesses to ask people to opt 
in, ``We have new programs that you may want to know about. 
Please sign up, and we won't harass you. We will use it very 
specifically. You can always opt out.'' But, we've never seen 
anyone really go through this process of asking consumers 
whether they would like to get a robocall. So, again, without 
the trial of going through the process of trying to get 
people's opt-in consent, the assumption should be made that 
people don't want this. And businesses know they will never get 
people to sign up for a robocall unless they can really argue 
the case to their own customers. This shouldn't be something 
that the Federal Government allows, that the people that you 
represent have already made it pretty clear that they don't 
want.
    So, thank you for----
    The Chairman. Thank you, Mr. Zoeller, very much.
    [The prepared statement of Mr. Zoeller follows:]

      Prepared Statement of Hon. Greg Zoeller, Attorney General, 
                            State of Indiana
    Thank you Mr. Chairman and members of the Committee. I am Greg 
Zoeller, the Attorney General of Indiana. I appreciate the invitation 
to speak to you today.
    Preventing unwanted and harassing calls to peoples' phones has been 
a priority for attorneys general across the country, and particularly 
for me. I have spent my tenure as Attorney General working to 
strengthen Indiana's Do Not Call laws and prosecute violators. Unwanted 
calls and robocalls are by far the most common complaint received by my 
office, with more than 14,000 complaints received last year--half of 
which were specifically about robocalls. My office receives new Do Not 
Call and robocall complaints at a rate of nearly 50 complaints per day. 
If this rate continues, the number of Do Not Call and robocall 
complaints could exceed 18,000 in 2016. The YouMail National Robocall 
Index estimates that 2.5 billion robocalls were made in the U.S. in the 
month of March alone. Sixteen of the top twenty robocallers were debt 
collectors.\1\
---------------------------------------------------------------------------
    \1\ Source: http://www.youmail.com/phone-lookup/robocall-index/
2016/march
---------------------------------------------------------------------------
    It has been a long, tireless battle to help protect Hoosiers' 
privacy by working to stop unwanted calls that pester, intrude and all 
too often scam people. In Indiana, we've advanced some of the strongest 
telephone privacy laws and banned nearly all types of robocalls. A 
Federal court recently upheld Indiana's ban on political robocalls to 
peoples' phones without their consent. We've also expanded our state's 
Do Not Call law to include cell phones.
    Unfortunately, the Federal Telephone Consumer Protection Act (TCPA) 
was recently altered, undermining our tough state laws. The new 
amendment allows debt collection robocalls to peoples' cell phones if 
the debt is owned or guaranteed by the United States. Prior to the 
amendment, the TCPA prohibited all robocalls to cell phones. By carving 
out this exception, Congress is legitimizing robocalls and allowing 
them a free pass to harass people.
    Debt collection robocalls are aggressive, relentless, and often 
inaccurate. Of the nearly 700 debt collection complaints my office 
received last year, about 90 percent were because the caller was 
harassing the wrong person. The vast majority of robocallers are scam 
artists. Legitimizing some types of robocalls adds confusion and 
creates more opportunity for fraud, particularly as government 
impersonation scams rise. We had more complaints about the IRS 
impersonation scam this year than any other telephone privacy 
complaint, with nearly 1,400 complaints received this year at a rate of 
10 complaints per day.
    The debt collection exception particularly burdens young Americans 
struggling with student debt. College students and recent graduates are 
already buried in mountains of debt. Blasting them with robocalls, 
running up their cell phone bills and putting them at risk for fraud 
only adds insult to injury. In a letter sent earlier this year, I--
along with 24 state attorneys general--called on the Committee to 
defend the telephone privacy rights of citizens by passing the HANGUP 
Act and keeping the ban on robocalls to cell phones intact.
    Some sellers are urging you to create a safe harbor to protect them 
from the bad acts of telemarketers calling on their behalf or 
generating leads. This is because courts have imposed strict liability 
on the sellers in several cases. There is no ``safe harbor'' for those 
who hire telemarketers or buy leads to sell their products in Indiana. 
Our legislature clearly stated that liability extends not only to those 
who make calls, but also to those who cause them to be made. That is 
why I am urging you not to water down the TCPA by approving any 
amendment that lets sellers off the hook.
    I would also like to stress the importance of the TCPA's provision 
that allows private citizens to take action against companies and 
individuals that violate their telephone privacy rights. As Congress 
envisioned in 1991, individuals can pursue legal cases against 
telemarketers, faxers and debt collectors who violate the TCPA. This 
tradition has produced a rich body of case law, and curbed abuses by 
those who would otherwise ignore TCPA restrictions.
    Unwanted calls are a huge annoyance to our citizens. It's 
frustrating when the Federal Government weakens state efforts aimed at 
protecting and serving our citizens. I urge Congress to stop allowing 
loopholes that legitimize robocalls and open citizens up to a barrage 
of unwanted or misplaced calls.
    Thank you for your time. I am available for any questions.

    The Chairman. Ms. Wahlquist.

             STATEMENT OF BECCA WAHLQUIST, PARTNER,

              SNELL & WILMER, L.L.P., ON BEHALF OF

          THE U.S. CHAMBER INSTITUTE FOR LEGAL REFORM

                  AND U.S. CHAMBER OF COMMERCE

    Ms. Wahlquist. Good morning, Chairman Thune and Ranking 
Member Nelson, members of the Committee. That was my good 
mornings.
    My name is Becca Wahlquist. I am honored to represent the 
U.S. Chamber of Commerce and the Chamber of Institute for Legal 
Reform testifying before you today.
    The context for my knowledge about the TCPA is that, for 
over a decade, I have defended various companies sued under the 
TCPA for a variety of communications made via phone, text, and 
facsimile. So, I've been a firsthand witness to the growing 
cottage industry of TCPA plaintiffs lawyers who have been 
targeting American businesses. I can confirm that, in the past 
few years, the problems with TCPA litigation abuse have only 
worsened. And so, we need your help.
    Over-incentivized plaintiffs, a growing TCPA plaintiffs' 
bar, and an antibusiness 2015 order from the FCC have led to an 
explosion of litigation in our country, litigation that is less 
about protecting consumers and more about driving a 
multimillion-dollar commercial enterprise of TCPA lawsuits. 
These suits, for the large part, are not about marketing calls. 
They're not about the kinds of robocalls that we were just 
hearing of. Robocalls are those indiscriminate calls reaching 
out, trying to get anyone, going through the numbers in an area 
code, just getting someone to pick up the phone. Robocalls are 
not what my clients have sent.
    So, for example, a client that has millions of customers, 
has a lot of automated systems, a customer's credit-card 
payment is rejected. The customer has provided a telephone 
number as their point of contact to the company. The company 
then contacts the customer to let them know, ``Your credit 
card's been rejected,'' because if they don't know that, and 
their service gets turned off, there are going to be fees to 
get your service turned back on again. So, this is all trying 
to provide information to a customer-provided number.
    The biggest driver of litigation now is if that number has 
been reassigned and the company has no knowledge about the 
reassignment. So, who they then send that message to ends up 
being a new owner, and that's what's driving a big chunk of the 
TCPA litigation now, is that you now have someone who says, 
``Well, I didn't consent to get that call,'' and especially if 
they don't inform the company, the calls can keep rolling in 
for other reasons, and then you start getting, ``I now have 40 
calls, now I want my $20,000,'' and you get the demand. And 
this is what companies are facing over and over again.
    The TCPA itself does not provide for attorneys' fees. It's 
clear that TCPA class lawsuits are just a lawyer-driven 
business at this point. Attorneys' fees awards are getting 
pulled from common class funds, dwarfing any recovery for 
individual consumers. For example, in 2014, the average 
attorneys' fees awarded in a TCPA class action was $2.4 
million, while the average class member's award in those 
actions would be $4.12.
    It's not just large companies who are finding themselves 
targeted. Small businesses throughout the country are finding 
themselves brought into court when they had no intention of 
violating any law, they had no knowledge of the TCPA. I have 
one client right now who has six employees and found me on the 
Internet because I talk about TCPA, and I took on their case. 
And if they can't--they're not sure what to do. They're going 
to have to shutter their business and fire their employees and 
close shop if they can't get past this TCPA lawsuit that's 
being brought on a class-action basis by someone who received a 
call at a reassigned number.
    So, small businesses throughout the country, a wide range 
of industry, so you have--literally thousands of different 
companies are being sued under the TCPA right now--social media 
companies, electric companies, banks, sports teams, pharmacies, 
family owned plumbing companies, a ski resort, an accountant, a 
local dentist office. They've all found themselves defending 
against TCPA litigation and facing what, for them, is 
potentially annihilating statutory damages for gotcha 
violations. And these are not spoofing robocalls, these are 
legitimate communications that these companies are trying to 
make.
    The TCPA is not only a liability trap, it's a vicarious 
liability trap, as well. So, for example, there are companies 
that make no calls, they have no telemarketing, they have no 
interaction with consumers--such as manufacturers--and they're 
finding themselves getting dragged into TCPA litigation on the 
argument that, ``Your product name was mentioned in the spoofed 
robocall that I received. And, because your name was mentioned, 
you're on the hook and you are responsible.'' And this is a 
problem, because you have companies with deep pockets now in 
litigations having to defend themselves on a class-action 
basis, where the statutory damages are so potentially 
annihilating that it really forces settlements rather than a 
defense.
    So, I provided some examples in my witness statement of 
some of the litigation abuse, such as the Pennsylvania woman 
who subscribes to 35 cellular phones, carries them around in a 
suitcase with her so she can jot down all the calls that she 
gets. She specifically chooses area codes from Florida areas so 
that they are more likely to have potentially socioeconomically 
depressed conditions. She chooses the area codes carefully and 
then waits for reassigned numbers to come in, and brings 
hundreds of suits.
    I mentioned the Ohio man who was so resistant to putting 
his number on the Do Not Call List that he actually fought up 
through the Ohio Supreme Court to be able to keep getting 
calls, because he wanted to bring suits under them and didn't 
want to be on the Do Not Call List.
    There are a lot of plaintiffs that are--people that are 
making their living right now as TCPA plaintiffs.
    I also provided some examples in my written statement of 
TCPA attorneys who are behind quite a bit of litigation abuse.
    So, it has been 25 years since the TCPA was drafted, and 
the equipment that was focused on was equipment that doesn't 
even exist anymore. The original intent of the TCPA is 
something I discuss in part 2 of my statement. I ask you to 
review that, to think about the changes that need to be made. I 
make suggestions in part 5 of my statement.
    I'm just here today to sum up, to voice the hope of 
thousands of businesses being sued under the TCPA, that 
Congress will act to update the TCPA, provide the greatest 
degree of clarity and alleviate the intolerable and unfair 
burdens that portions of the statute are placing on legitimate 
American businesses.
    [The prepared statement of Ms. Wahlquist follows:]

Prepared Statement of Becca Wahlquist, Partner, Snell & Wilmer L.L.P., 
   on behalf of the U.S. Chamber Institute for Legal Reform and U.S. 
                          Chamber of Commerce
    Chairman Thune, Ranking Member Nelson, and distinguished members of 
the Committee, thank you for inviting me to testify on behalf of the 
U.S. Chamber Institute for Legal Reform (``ILR'') and U.S. Chamber of 
Commerce. The U.S. Chamber of Commerce is the world's largest business 
federation representing the interests of more than three million 
companies of all sizes, sectors, and regions, as well as state and 
local chambers and industry associations, and dedicated to promoting, 
protecting, and defending America's free enterprise system. ILR is an 
affiliate of the Chamber dedicated to making our Nation's civil legal 
system simpler, faster, and fairer for all participants.
    I appreciate the opportunity to testify about the impact of the 
Telephone Consumer Protection Act, 47 U.S.C. Sec. 227 (``TCPA'') on 
American businesses big and small, in a manner never intended by the 
drafters of this 25-year-old statute.
    The TCPA is a well-intentioned statute that established our 
Nation's Do Not Call list and carried forward important policies. But 
portions are horribly outdated; in particular, Section 227(b), which 
addresses technologies used for cold-call telemarketing in the early 
90s, is now being expanded to attach liability to all manner of calls 
(i.e., informational and transactional) placed by businesses small and 
large to customer-provided numbers. TCPA litigation is also fueled by 
statutory damages that are untethered to any actual harm, and that can 
quickly balloon to staggering amounts of potential liability.
    Unfortunately, it is American businesses, and not harassing spam 
telemarketers, who are the targets for these suits. As FCC Commissioner 
Pai recently noted, ``The TCPA's private right of action and $500 
statutory penalty could incentivize plaintiffs to go after the illegal 
telemarketers, the over-the-phone scam artists, and the foreign 
fraudsters. But trial lawyers have found legitimate, domestic 
businesses a much more profitable target.'' \1\ Indeed, businesses 
reaching out in good faith to customer-provided telephone numbers are 
now the most common target of TCPA litigation.
---------------------------------------------------------------------------
    \1\ See In re Matter of Rules & Regulations Implementing the Tel. 
Consumer Prot. Act of 1991, 30 F.C.C.Rcd. 7961, 8072-73(2015) (Pai 
Dissent).
---------------------------------------------------------------------------
    It is time for this statute to be revisited and brought in line 
with other Federal statutes that provide for statutory damages when 
there is no actual harm. While protections should remain for consumers, 
businesses too need protection from astronomical liability for four 
years' worth of communications to customer-provided numbers (with no 
stated statute of limitations, courts have applied the default four-
year period in TCPA litigation). As further detailed below, the TCPA 
has created perverse incentives for persons to invite calls from 
domestic businesses and then sue for those calls, and for lawyers to 
search avidly for deep-pocket defendants calling their potential 
clients, even offering smartphone applications to help generate those 
lawsuits. TCPA litigation abuse is rampant, and its negative impact on 
American businesses is not what was intended when this statute was 
passed in a different technological era.
I. Background: The Destructive Force of TCPA Litigation
    The TCPA was enacted twenty-five years ago to rein in abusive 
telemarketers. But in recent years American businesses have discovered 
that if they reach out to customers via call, text, or facsimile for 
any reason, their company is at risk of being sued under the TCPA.
    A plaintiff claims that a communication was made without his or her 
consent using certain technologies, and more often than not, that 
plaintiff claims to represent a nationwide class seeking the $500 (or 
$1,500, if willful) statutory damages available under the TCPA for each 
communication. Thus, the small business that sent 5,000 faxes finds 
itself being sued for a minimum of $2.5 million; the restaurant that 
sent 80,000 text coupons is sued for trebled damages of $120 million; 
and the bank with 5 million customers finds itself staring at $2.5 
billion in minimum statutory liability for just one call placed to each 
of its customers.
    Individual plaintiffs can also stockpile calls they believe violate 
the TCPA for years, and then make demands or sue once they reach 
critical mass--seeking $20,000 to $60,000 in individual damages, for 
example, for 40 unanswered calls a company thought it was placing to 
its own customer's number over a three-year period. The targeted 
company must then decide whether to pay plaintiffs' counsel or the 
complaining individual, or to spend significant money defending an 
action in which, when a class is alleged, has statutory damages that 
can reach into the millions or billions of dollars.
    For over a decade, I have defended various companies sued under the 
TCPA for a variety of communications made via phone, text, and 
facsimile. I have been witness to the growing cottage industry of TCPA 
plaintiffs and lawyers targeting American businesses that reach out to 
their own customers for any reason (transactional, informational, or 
marketing), and I can confirm that in the past few years, the problems 
with TCPA litigation abuse have only worsened. Over-incentivized 
plaintiffs and a growing TCPA plaintiffs' bar, as well as an anti-
business July 2015 Order from a sharply divided FCC majority,\2\ have 
led to an explosion of litigation throughout the country--litigation 
that is less about protecting consumers and more about driving a multi-
million dollar commercial enterprise of TCPA lawsuits.
---------------------------------------------------------------------------
    \2\ See In re Matter of Rules & Regulations Implementing the Tel. 
Consumer Prot. Act of 1991, 30 F.C.C.Rcd. 7961 (2015) (hereafter, 
``July 2015 FCC Order''). Various appeals of this Order have been 
consolidated and are now pending before the D.C. Circuit Court of 
Appeals.
---------------------------------------------------------------------------
    Indeed, while the TCPA itself does not provide for attorneys' fees, 
it is clear that TCPA class lawsuits are a lawyer-driven business, with 
attorneys' fees awards (pulled from common class funds) dwarfing any 
recovery for individual consumers. For example, one survey of Federal 
TCPA settlements found that in 2014, the average attorneys' fees 
awarded in TCPA class action settlements was $2.4 million, while the 
average class member's award in these same actions was $4.12.\3\
---------------------------------------------------------------------------
    \3\ See Wells Fargo Ex Parte Notice, filed January 16, 2015, in CG 
Docket No. 02-278, p. 19, available at http://apps.fcc.gov/ecfs/
document/view?id=60001016697.
---------------------------------------------------------------------------
    And it is not just large companies who find themselves targeted: 
Small businesses throughout the country are finding themselves brought 
into court when they had no intention of violating any law and had no 
knowledge of the TCPA. One family-owned company from Michigan, Lake 
City Industrial Products, Inc., struggled for several years to defend a 
TCPA class action for 10,000 faxes, providing a chilling example of how 
the risks of unknowingly violating the TCPA can be exacerbated by lead 
generators who reach out to small companies and promise an inexpensive 
and legal way to get new businesses. Lake City received a faxed 
advertisement suggesting a way to generate new business: faxes to be 
sent to approximately 10,000 targeted businesses, all for the low 
sending cost of $92.\4\ The family-run company believed it was engaging 
in a legal marketing tactic and worked with the fax advertiser to 
design the facsimile it would send; on summary judgment, the court 
found Lake City liable for approximately 10,000 violations of the TCPA 
for the unsolicited marketing facsimiles, even though Lake City noted 
that statutory damages of $5,254,500 would force its bankruptcy.\5\ 
This is just one of the small businesses that has found itself facing 
annihilating statutory damages and accruing staggering defense costs 
for sending faxes in the modern age, when facsimile machines are no 
longer expensive and, indeed, most ``facsimiles'' are converted to e-
mail PDF and sent to a recipient's e-mail by company servers.
---------------------------------------------------------------------------
    \4\ See Am. Copper & Brass, Inc. v. Lake City Indus. Products, 
Inc., 1:09-CV-1162, 2013 WL 3654550 (W.D. Mich. July 12, 2013) 
(business retained fax blaster to send faxes; no question that the 
business first inquired whether such faxes were legal and received 
assurances that they were).
    \5\ See id.at *6.
---------------------------------------------------------------------------
    With such riches to be had through TCPA lawsuits, between 2010 and 
2015, the amount of TCPA litigation filed in Federal court increased by 
940 percent.\6\ For just one example of how this has impacted the 
already-crowded Federal court system, look to Florida: in 2015, at 
least 170 TCPA actions were filed just in Florida's Federal courts, 
compared with less than 30 such Federal actions in 2010.\7\
---------------------------------------------------------------------------
    \6\ See http://webrecon.com/out-like-a-lion-debt-collection-
litigation-cfpb-complaint-statistics-dec
-2015-year-in-review/.
    \7\ Source: Bloomberg Law Litigation & Dockets (searched on May 10, 
2016 with a search of ``TCPA'' OR ``telephone consumer protection'' in 
the Florida District Courts).
---------------------------------------------------------------------------
    The dramatic increase in TCPA litigation has been spurred by multi-
million dollar settlements (such as Capital One's $75 million 
settlement in 2014), as well as news of individual awards in the 
hundreds of thousands of dollars (such as one New Jersey woman's 
$229,500 verdict against her cable provider in July 2015,\8\ or a 
Wisconsin woman's $571,000 verdict in 2013 against the finance company 
calling her husband's phone after she defaulted on car payments \9\).
---------------------------------------------------------------------------
    \8\ King v. Time Warner Cable, 113 F. Supp. 3d 718 (S.D.N.Y. 2015).
    \9\ Nelson v. Santander Consumer USA, Inc., 2013 WL 1141009 (W.D. 
Wisc., March 8, 2013), a decision later vacated by agreement of the 
parties as part of a confidential settlement.
---------------------------------------------------------------------------
    Attorneys have profited as well, often teaming up to split the 
costs of ``investing'' in a TCPA litigation, so that multiple firms 
split the business risk and share in the reward when companies facing 
enormous statutory damages end up settling. In the Capital One action, 
for example, when considering the appropriate attorneys' fees (rather 
than the 33-40 percent of the award the named plaintiffs had agreed to 
with their various lawyers), the court recognized that while Capital 
One had many defenses that could extinguish the plaintiffs' TCPA 
claims, the in terroem value of settling an action with even a slight 
chance of billions of dollars in statutory damages was ``bankruptcy-
level exposure'' that made settlement (and a fees award) more likely 
than not, so that a fees award of a little over 20 percent was more 
appropriate.\10\ The plaintiffs' law firms were awarded their costs and 
$15,668,265 in fees out of the settlement fund.\11\
---------------------------------------------------------------------------
    \10\ See In re Capital One Tel. Consumer Prot. Act Litig., 80 F. 
Supp. 3d 781, 805 (N.D. Ill. 2015), appeal dismissed (May 5, 2015), 
appeal dismissed (June 8, 2015), appeal dismissed (June 26, 2015) (also 
recognizing ``the strong incentives to settlement created by the 
magnitude of Capitol One's potential liability'').
    \11\ Id. at 809.
---------------------------------------------------------------------------
    Businesses of all sizes in a wide range of industries--from social 
media companies, electric companies, banks, sports teams, and 
pharmacies, to a family-owned plumbing company, a ski resort, an 
accountant, and a local dentist's office--have found themselves 
defending against TCPA litigation and demands. Indeed, the TCPA is not 
only a liability trap, but also a vicarious liability trap as well. For 
example, companies (such as manufacturers) who place no phone calls to 
consumers are finding themselves defending class action litigation for 
millions of calls or texts placed by downstream resells simply because 
those communications purportedly mentioned their name-brand products. 
Companies are subject to the expense of defending against claims such 
as, for example, a text message was sent on their behalf, when the 
company did not send the message, did not authorize that such messages 
can be sent, and had no knowledge of which business partner (if any) 
would breach its contract to perform illegal telemarketing (as often 
the actual senders of spam text messages spoof the originating number 
that would show in the Caller ID field to hide their identity). Even 
the simple mention of the company's name in the text message subjects 
it to class-wide TCPA litigation by plaintiffs' attorneys hoping for 
the big payday of a settlement (because so many companies do settle due 
to the in terrorem specter of billions of dollars in potential damages, 
if a large enough class could be certified.\12\).
---------------------------------------------------------------------------
    \12\ As Chief Judge Richard Posner of the U.S. Court of Appeals for 
the Seventh Circuit has explained, certification of a class action--
even one lacking in merit--forces defendants ``to stake their companies 
on the outcome of a single jury trial, or be forced by fear of the risk 
of bankruptcy to settle even if they have no legal liability. In re 
Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1299 (7th Cir. 1995).
---------------------------------------------------------------------------
    To better explain the current TCPA landscape, Part II of my 
testimony below first addresses the original intent of the TCPA and the 
language that, in 1991, was designed to target certain abusive and 
harassing marketing calls, and then explains how the statute has been 
twisted and expanded without Congress' input to apply to modern 
technologies. Part III examines the current driving forces behind TCPA 
cases, and the reasons that companies cannot fully protect themselves 
from suits under Section 227(b). Part IV provides examples of just some 
of the rampant litigation abuse by both serial TCPA plaintiffs and by 
attorneys incentivized to bring TCPA lawsuits at an ever-increasing 
pace. I conclude in Part V by voicing the hope of the thousands of 
businesses being sued under the TCPA: that Congress should act to 
update the TCPA in order to provide the greatest degree of clarity and 
to alleviate the intolerable and unfair burdens that portions of this 
statute are placing on businesses. In order to start that discussion, I 
provide several recommendations that would bring the TCPA's private 
right of action in line with that of other Federal statutes offering 
consumer remedies and that could help protect American companies and 
Federal courts from the repercussions of litigation abuse, and allow 
business to continue communications helpful and important to their 
customers.
II. The Original Intent, and Current Application, of the TCPA
    The TCPA was enacted during a very different technological era, and 
is now twenty-five years removed from modern technologies. The 
telemarketing calls and faxes that the TCPA was designed to curtail 
were made by aggressive marketers employing tactics--such as random 
number generation or sequential dials--that systematically worked 
through every possible number in an area code, with the hope of getting 
someone to answer the phone or look at a fax with a marketing pitch for 
a product or service. Facsimile machines required expensive thermal 
paper; cellular phones were extremely uncommon (and very bulky) with 
expensive usage costs--thus, special protections were put in place for 
unsolicited calls made to cell phones and for unsolicited faxes that 
did not provide an easy opt-out. Caller ID was not in use, and so the 
only way to know who was calling was to pick up the ringing telephone. 
Text messages did not exist (indeed, e-mail was still uncommon), and 
today's smart phones were science fiction fantasies.
    An understanding of the technologies available in 1991 is crucial 
to an understanding of the TCPA's intent: Businesses reaching out to 
their own customers were not doing so through what the statute defined 
as ``ATDS machines''--systems capable of randomly and sequentially 
generating and dialing numbers,\13\ which were being used by 
telemarketers who did not care whom they reached, as long as they could 
get a certain number of people to pick up the phone. Congress was 
focused on the belief that limiting calls from ATDS autodialers would 
stop a certain kind of calling technology that ``seized'' phone lines 
that had been called randomly or sequentially.\14\
---------------------------------------------------------------------------
    \13\ See 47 U.S.C. Sec. 227(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.''
    \14\ See, e.g., Report of the Energy and Commerce Committee of the 
U.S. House of Representatives, H.R. Rep. 102-317, at 10 (1991) 
(discussing ``Automatic Dialing Systems'' as follows: ``The Committee 
report indicates that these systems are used to make millions of calls 
every day. . . . Telemarketers often program their systems to dial 
sequential blocks of telephone numbers, which have included those of 
emergency and public service organizations, as well as unlisted 
telephone numbers. Once a phone connection is made, automatic dialing 
systems can ``seize'' a recipient's telephone line and not release it 
until the prerecorded message is played, even when the called party 
hangs up. This capability makes these systems not only intrusive, but, 
in an emergency, potentially dangerous as well.'')
---------------------------------------------------------------------------
    The TCPA was designed to address consumer privacy concerns and 
serious intrusions from that type of aggressive marketing. As the 
Supreme Court has noted, ``Congress determined that Federal legislation 
was needed because telemarketers, by operating interstate, were 
escaping state-law prohibitions on intrusive nuisance calls.'' \15\ The 
TCPA set rules about the kinds of consent required to make certain 
communications to phones and facsimile machines,\16\ and further 
authorized the establishment of a national Do Not Call (DNC) list that 
would record consumers' requests to not receive any telemarketing 
calls.\17\ The FCC was tasked with implementing the TCPA and 
promulgating the regulations that would create the national DNC, and 
over time the FCC has updated its regulations to add new requirements 
(such as the need for companies to maintain their own internal DNC list 
for requests to stop telemarketing otherwise permissible because of an 
Existing Business Relationship (EBR)).\18\
---------------------------------------------------------------------------
    \15\ Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 742 (2012).
    \16\ See 47 U.S.C. Sec. 227(b).
    \17\ See 47 U.S.C. Sec. 227(c).
    \18\ See, generally, 47 C.F.R. Sec. 64.1200.
---------------------------------------------------------------------------
    On the Senate floor, the TCPA's lead sponsor, Senator Hollings (D-
SC), explained that the TCPA was intended to ``make it easier for 
consumers to recover damages'' from computerized telemarketing calls, 
and that the intent was for consumers to go into small claims courts in 
their home states so that the $500 in damages would be available 
without an attorney:

        The substitute bill contains a private right-of-action 
        provision that will make it easier for consumers to recover 
        damages from receiving these computerized calls. The provision 
        would allow consumers to bring an action in State court against 
        any entity that violates the bill. The bill does not, because 
        of constitutional constraints, dictate to the states which 
        court in each state shall be the proper venue for such an 
        action, as this is a matter for State legislators to determine. 
        Nevertheless, it is my hope that states will make it as easy as 
        possible for consumers to bring such actions, preferably in 
        small claims court. . . .

        Small claims court or a similar court would allow the consumer 
        to appear before the court without an attorney. The amount of 
        damages in this legislation is set to be fair to both the 
        consumer and the telemarketer. However, it would defeat the 
        purposes of the bill if the attorneys' costs to consumers of 
        bringing an action were greater than the potential damages. I 
        thus expect that the States will act reasonably in permitting 
        their citizens to go to court to enforce this bill.\19\
---------------------------------------------------------------------------
    \19\ 137 Cong. Rec. 30821-30822 (1991) (emphasis added).

    It is clear that the private right of action focused on allowing 
consumers to sue telemarketers. Moreover, it was so clear that TCPA 
claims were intended to be handled on an individual basis in small 
claims court, the few early TCPA litigants in Federal courts were told 
that there was no jurisdiction in Federal court to hear TCPA claims, a 
matter only finally resolved by the U.S. Supreme Court in 2012 in its 
Mims decision (when the question had essentially been mooted for large 
TCPA class actions by the earlier Class Action Fairness Act's provision 
that class actions alleging over $5 million in damages could be removed 
to Federal court).
    There was no real debate over the TCPA at the time of its passage; 
certainly, there was no indication of what the TCPA would grow to 
become. But now, a statute designed to provide a private right of 
action for consumers to pursue their own claims against entities 
placing intrusive and aggressive telemarketing calls, preferably in 
small claims court and without an attorney, now threatens to bankrupt 
any legitimate company placing legitimate business calls, as well as 
any ``deep-pocket'' entity that plaintiffs can claim could be 
vicariously liable for another person's or entity's communications.
    The largest driver of TCPA litigation these days is claims of 
``autodialed'' calls or texts to cellular phones placed without prior 
consent, because so many Americans now use their cell phones as their 
primary point of contact--as of 2014, 90 percent of American households 
had cellular phones,\20\ and almost 60 percent were wireless-only 
households.\21\ Unlike in 1991, the modern owners of cellular numbers 
often opt to provide those numbers to companies with whom they do 
business. And unlike in 1991, companies often use computerized systems 
to efficiently contact these numbers--systems that TCPA plaintiffs 
argue are ``autodialers'' subject to the TCPA's restrictions.
---------------------------------------------------------------------------
    \20\ Pew Internet Project, Mobile Technology Fact Sheet, Pew 
Research Center (2014), available at http://www.pewinternet.org/fact-
sheets/mobile-technology-fact-sheet/.
    \21\ Stephen J. Blumberg & Julian V. Luke, Div. of Health Interview 
Statistics, Nat'l Ctr. for Health Statistics, Centers for Disease 
Control and Prevention, Wireless Substitution: Early Release of 
Estimates From the National Health Interview Survey, January-June 2014, 
at 1-3 (Dec. 16, 2014).
---------------------------------------------------------------------------
    As already noted above, the TCPA defines an ``autodialed'' call as 
one made on an automated telephone dialing system (ATDS), ``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.'' \22\ TCPA plaintiffs and their attorneys have been 
arguing in lawsuit after lawsuit that if a call was placed with 
equipment that has even a hypothetical, future capacity to store or 
produce random or sequentially generated numbers (i.e., through 
reprogramming), that call or text was placed with an ATDS. And in an 
Order now on review before the D.C. Circuit Court, a divided majority 
of FCC commissioners agreed in June 2015 that ``capacity'' to randomly/
sequentially dial need not be an operative feature in dialing equipment 
for the call to be considered ``autodialed'' and subject to the TCPA's 
restrictions.\23\ (The two dissenting commissioners vehemently 
disagree.\24\)
---------------------------------------------------------------------------
    \22\ 47 U.S.C. Sec. 227(a)(1) (emphasis added).
    \23\ See July 2015 FCC Order, 30 FCC Rcd. at 7974-7976.
    \24\ See also id., Pai Dissent, 30 FCC Rcd. at 8074 (``That 
position is flatly inconsistent with the TCPA. The statute lays out two 
things that an automatic telephone dialing system must be able to do 
or, to use the statutory term, must have the ``capacity'' to do. If a 
piece of equipment cannot do those two things--if it cannot store or 
produce telephone numbers to be called using a random or sequential 
number generator and if it cannot dial such numbers--then how can it 
possibly meet the statutory definition? It cannot. To use an analogy, 
does a one-gallon bucket have the capacity to hold two gallons of 
water? Of course not.''); see also id., O'Rielly Dissent, 30 FCC Rcd. 
at 8088-90.
---------------------------------------------------------------------------
    The central problem to businesses with Section 227(b)'s prohibition 
on ``autodialed'' calls to cellular phones is that legitimate companies 
are being swept into the strict liability intended for the bad actors 
who, in 1991, were cold-call telemarketing random or sequential 
telephone numbers using a specific kind of equipment. No legitimate 
company in 1991 was trying to reach its own customers by randomly 
dialing numbers with equipment that fit the definition of an ATDS (as 
it would make no sense to try to reach a customer by dialing random 
numbers), so as to be subject to $500 or $1,500 per call liability for 
``autodialed'' calls. Thus, it makes sense to see no affirmative 
defenses built into Section 227(b), because no one making cold calls to 
random telephone numbers would have a defense for such practices.
    On the other hand, many companies in 1991 did conduct some form of 
targeted telemarketing to customers, former customers, or prospective 
customers, and were bound by Section 227(c) to adhere to all the 
telemarketing rules established as to the DNC list. The separate 
private right of action in Section 227(c)(5) gives more protection to 
the legitimate companies that could violate DNC provisions: having 
exceptions during existing business relationship periods; allowing one 
free mistake each twelve months per number; setting statutory damages 
at the less draconian ``up to'' $500 per communication; and providing 
affirmative defenses for companies who are making good faith efforts to 
comply with the law (i.e., by establishing written DNC policies and 
training employees on such policies \25\). Thus, companies were given 
instructions needed to comply with the DNC section of the TCPA, and 
could defend themselves in the instances when the inevitable human 
error, such as a customer representative not accurately recording a DNC 
request, would occur.
---------------------------------------------------------------------------
    \25\ See 47 U.S.C. Sec. 227(c)(5) (``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.'').
---------------------------------------------------------------------------
    It should come as no surprise that most TCPA litigation is now 
being brought under Section 227(b)'s unforgiving prohibitions on 
autodialed or prerecorded calls placed to cellular phones without prior 
express consent. Plaintiffs argue that calls or call attempts were 
autodialed. While the FCC has opined that ``prior express consent'' for 
transactional and informational calls exists when a customer opts to 
provide his or her cellular telephone number to a company (i.e., on an 
application),\26\ the FCC majority has also now stated that companies 
are liable (after the first call) to all ``autodialed'' calls placed to 
those customer-provided numbers if, unbeknownst to the company, the 
customer has changed his or her telephone number or provided a wrong 
number in the first place.\27\ Thus, a company reaching out to a 
customer-provided number can unknowingly be contacting a new subscriber 
to the cellular phone, who then can claim calls were made with an 
autodialer in violation of Section 227(b) without prior consent.
---------------------------------------------------------------------------
    \26\ See In re: Rules and Regulations Implementing the Telephone 
Consumer Protection Act of 1991, 23 F.C.C.R. 559, 564-65  10 (F.C.C. 
Jan. 4, 2008).
    \27\ See July 2015 FCC Order, 30 FCC Rcd. at 8001.
---------------------------------------------------------------------------
    As further addressed in Part IV below, this has created ``gotcha'' 
litigation, where someone signs up for a credit card with a friend's 
telephone number, and then the friend sues for calls received, or where 
someone keeps acquiring dozens of new cellular telephone lines in the 
hopes of ``striking it rich'' with a phone number receiving calls from 
deep-pocket companies trying to reach the prior owner of the line.\28\ 
Because the private right of action in Section 227(b)(3) lacks the 
affirmative defenses that Congress intended should apply to legitimate 
businesses (whom it was known could be targets of litigation under 
Section 227(c)(5), which does have such defenses), TCPA plaintiffs and 
their lawyers argue that there is strict liability for all these calls 
placed without consent, regardless of the company's good faith belief 
and adherence to practices meant to comply with the TCPA.
---------------------------------------------------------------------------
    \28\ The Third Circuit recently made such matters worse, in a ten-
year battle over a single phone call one roommate picked up on March 
11, 200, by ruling in October 2015 that a ``habitual user'' of a shared 
telephone such as a roommate was in the ``zone of interests protected 
by the TCPA'', and had alleged sufficient facts to pursue a claim under 
the TCPA if he answered a ``robocall'' intended for his roommate (who 
may herself have given prior consent for that call). See Leyse v. Bank 
of Am. Nat. Ass'n, 804 F.3d 316, 327 (3d Cir. 2015).
---------------------------------------------------------------------------
    One final note on the 1991 statute and the technology of that time: 
Text messages did not exist twenty-five years ago when the statute was 
drafted, nor did any phones capable of displaying such a message. 
However, some courts and now the FCC majority have decided that a text 
message is the same thing as a ``call'' to a cellular phone, and is 
subject to the $500 to $1,500 per communication liabilities under the 
TCPA for autodialed calls (even though Commissioner O'Rielly vehemently 
dissented to extending the TCPA to text messages).\29\ Many recent TCPA 
litigations focus on text messages--and even though companies ensure 
that a ``STOP'' response to a text message will stop all future 
messages, a consumer has no obligation to ask for texts to ``STOP'', 
but instead can simply keep collecting messages until there are enough 
for his or her lawyer to make a hefty demand. It is difficult to 
imagine that Congress, had it conceived of text messages in 1991, would 
not have had separate provisions to address this very different kind of 
communication that so many consumers welcome for easy and quick 
delivery of information.
---------------------------------------------------------------------------
    \29\ See July 2015 FCC Order, O'Rielly Dissent, 30 FCC Rcd. at 8084 
(``I disagree with the premise that the TCPA applies to text messages. 
The TCPA was enacted in 1991--before the first text message was ever 
sent. The Commission should have had gone back to Congress for clear 
guidance on the issue rather than shoehorn a broken regime on a 
completely different technology.'').
---------------------------------------------------------------------------
    It should be clear that the technological shift since 1991, 
particularly the advent of cellular phones and now smart phones, should 
have made portions of the TCPA inapplicable to such new technologies. 
However, the opposite has happened. While foreign-based scam 
telemarketers continue to barrage consumers with calls, legitimate 
domestic businesses find themselves targeted primarily for 
transactional and informational calls never intended to be subject to 
the TCPA's restrictions--calls placed via modern technologies not 
contemplated by the TCPA. As Commissioner Pai has pointed out, this is 
something Congress should address:

        Congress expressly targeted equipment that enables 
        telemarketers to dial random or sequential numbers in the TCPA. 
        If callers have abandoned that equipment, then the TCPA has 
        accomplished the precise goal Congress set out for it. And if 
        the FCC wishes to take action against newer technologies beyond 
        the TCPA's bailiwick, it must get express authorization from 
        Congress--not make up the law as it goes along.\30\
---------------------------------------------------------------------------
    \30\ July 2015 FCC Order, Pai Dissent, 30 FCC Rcd. at 8076.

    But the FCC majority in issuing its recent July 2015 Order (now in 
litigation in the D.C. Circuit) instead continued to expand the reach 
of the TCPA, allowing litigation against businesses across all 
industries to proceed aggressively.
III. Core Factors Driving TCPA Litigation Against Businesses
    For many years, as it was intended to do, TCPA litigation focused 
primarily on unsolicited marketing facsimile, DNC violations, and 
prerecorded cold-call telemarketing calls. Around 2010, however, there 
was a sea-change in TCPA litigation. I recall that year defending one 
client sued on a class action basis for fraud alert calls placed to 
cellular telephones alerting the recipient that he or she might be a 
victim of identity theft. I thought that as soon as I alerted 
plaintiff's counsel that she had not received a marketing call, 
plaintiff would dismiss her lawsuit (as was usual); however, because 
the TCPA's protections for cellular telephones did not specifically 
apply to ``marketing'' calls, and my client was a large and well-funded 
corporation, the litigation went forward with tens of millions of 
dollars in statutory damages in play for fraud alert calls placed in 
the previous four years. Plaintiff argued that she had not given her 
prior consent for a prerecorded message from my client, but only to the 
credit reporting agency.
    We did win in summary judgment, with the court recognizing that 
Plaintiff had requested fraud alert calls be placed to her cellular 
phone through an intermediary and that there was indeed ``prior express 
consent'' to receive said calls, but that victory required my client to 
take on the costs of eighteen months of hard-fought litigation. In the 
end, Plaintiff's counsel walked away to file more TCPA lawsuits, only 
on the hook for my client's costs (and not for the significant 
expenditures in attorneys' fees, under the default American rule that 
leaves companies left holding the bag when a litigation ends).
    Before 2010, I defended just a few TCPA cases each year. By 2012, 
however, a critical mass of plaintiffs' attorneys had discovered the 
TCPA and its uncapped statutory damages and saw the expansion of TCPA 
litigation as a legal ``gold rush.'' By that time, I had become an 
almost full-time TCPA defense lawyer. And, given the amount of TCPA 
litigation being filed across the country, law firms also started TCPA 
defense practice groups. Now, TCPA litigations consume significant 
court resources across the country.
    In my experience, TCPA actions have been fueled in the past few 
years primarily by the following four issues:
a. ``Capacity'' to Autodial Remains Hotly Contested
    A debate continues as to whether ``capacity,'' as used in Section 
227(b) of the statute, refers to a system's present actual capacity, or 
includes a system's potential capacity, and the FCC's July 2015 Order 
only adds to the confusion. Under the FCC's view, any telephone call 
placed with equipment that is not an old-fashioned rotary dial 
telephone may encourage plaintiffs' lawyers to take a shot at a TCPA 
lawsuit.
    Some courts have rejected the theory that any technology with the 
potential capacity to store or produce and call telephone numbers using 
a random number generator constitutes an ATDS. For example, the Western 
District of Washington noted that such a conclusion would lead to 
``absurd results'' and would ``capture many of contemporary society's 
most common technological devices within the statutory definition.'' 
\31\ But other courts have accepted the ``potential'' capacity argument 
forwarded by the plaintiffs' bar. One judge in the Northern District of 
California, for example, has held that the question is ``whether the 
dialing equipment's present capacity is the determinative factor in 
classifying it as an ATDS, or whether the equipment's potential 
capacity with hardware and/or software alterations should be 
considered, regardless of whether the potential capacity is utilized at 
the time the calls are made.'' \32\ And the FCC majority refused, in 
its July 2015 Order, to find that ``capacity'' should reflect a 
system's present and actual abilities, with challenges to that opinion 
now pending in the D.C. Circuit.
---------------------------------------------------------------------------
    \31\ Gragg v. Orange Cab. Co., Inc., 995 F. Supp. 2d 1189, 1192-93 
(W.D. Wash. 2014); see Hunt v. 21st Mortg. Corp., No. 2:12-cv-2697-WMA, 
2013 WL 5230061, *4 (N.D. Ala. Sept. 17, 2013) (noting that, as, ``in 
today's world, the possibilities of modification and alteration are 
virtually limitless,'' this reasoning would subject all iPhone owners 
to 47 U.S.C. Sec. 227 as software potentially could be developed to 
allow their device to automatically transmit messages to groups of 
stored telephone numbers).
    \32\ Mendoza v. UnitedHealth Grp. Inc., No. C13-1553 PJH, 2014 WL 
722031, *2 (N.D. Cal. Jan. 6, 2014).
---------------------------------------------------------------------------
    Thus, there is no certainty for American businesses as to whether 
the expansion of the ``ATDS'' definition advocated by TCPA plaintiffs 
does indeed cover all modern, computerized systems used to dial 
telephone numbers or send text messages. A company whose employees are 
dialing calls that use any form of a computer in the process might find 
itself a target in a TCPA lawsuit, even when calls could not have been 
placed unless a human representative initiated the one-to-one call. To 
have uncapped statutory damages available that may or may not apply 
based on the interpretation of an undefined term in an outdated section 
of a Federal statute is an untenable situation for companies to find 
themselves in, when facing claims under the TCPA.
b. Calls Made To Recycled Or Wrongly Provided Cell Phone Numbers Are 
        Generating New Suits
    On a daily basis, companies across the country make calls or send 
texts to numbers provided to them by their customers, and prior express 
consent should exist for such communications even if they are made to 
cellular numbers with an ``autodialer'' or if they provide information 
via a prerecorded message. However, cell phone numbers can easily be 
relinquished and reassigned without notice to anyone, let alone to the 
businesses that were provided the number as a point of contact by their 
customer. Indeed, every day, an estimated 100,000 cell phone numbers 
are reassigned to new users.\33\
---------------------------------------------------------------------------
    \33\ July 2015 FCC Order, O'Rielly Dissent, 30 FCC Rcd. at 8090.
---------------------------------------------------------------------------
    Further, sometimes a customer makes a mistake when providing a 
contact number, or enters one belonging to a friend or roommate, or in 
these days of family plans, enters a number for a phone line shared 
with or later bequeathed to another family member. Then, when the 
company attempts to reach out to its customer at the provided number, 
it can unintentionally be sending communications to a non-customer, 
i.e., the new or actual owner of the number. This seemingly innocent 
mistake has become the most significant driver of new TCPA litigations. 
Indeed, a statute intended to cover abusive telemarketing has morphed 
into one supporting claims against well-intentioned companies 
attempting to communicate with their own customers, generally for 
transactional or informational purposes.
    As another example, automated calls set up by a cell phone owner to 
be sent to his or her cellular phone as a text message can be received 
instead by a new cell phone owner if the prior owner forgets to turn 
off such requested messages relinquishing a phone line. One California 
restaurant chain's automated voice-mail systems sent 876 food-safety-
related text messages intended to reach one of its employees' cell 
phones, after that employee had set a forwarding feature on his work 
telephone that was designed to message his own phone. However, after he 
changed numbers, those messages were unintentionally sent to the new 
owner of that telephone line.\34\ That restaurant was sued for over 
$500,000 in statutory damages, and after a protracted fight, the small 
restaurant chain informed me that it ended up settling for an 
undisclosed amount after incurring hundreds of thousands of dollars in 
defense costs to fight the allegations. Again, it is difficult to 
believe that Congress intended companies to be sued for ``set it and 
forget it'' messaging services set up by the prior owner of a phone 
line, once that line is recycled to a new owner.
---------------------------------------------------------------------------
    \34\ See Rubio's Restaurant, Inc. Petition for Expedited 
Declaratory Ruling, CG Docket No. 02-278, at 3 (filed Aug. 11, 2015).
---------------------------------------------------------------------------
c. Vicarious Liability Theories Are Targeting New Defendants (In 
        Particular, Those With Deep Pockets)
    Another driver of TCPA litigation is vicarious liability: it is no 
longer just the entity placing a call, sending a text, or faxing a 
document that needs worry about defending a TCPA lawsuit. In a 2013 
Order long-anticipated by the plaintiffs' bar, the FCC opined that 
vicarious liability could attach under the TCPA to companies who 
themselves had not initiated the communications in question, so long as 
the calls were placed ``on behalf of'' the company, using the Federal 
common law of agency.\35\ Thus, a person or company can find itself 
defending a TCPA lawsuit with claims it is responsible for someone 
else's decisions to communicate via phone, text, or fax.
---------------------------------------------------------------------------
    \35\ See In the Matter of The Joint Petition Filed By DISH Network, 
LLC, the United States of America, and the States of California, 
Illinois. North Carolina, and Ohio for Declaratory Ruling Concerning 
the Telephone Consumer Protection Act (TCPA) Rules, Declaratory Order, 
CG Docket No. 11-50 (issued Apr. 13, 2013).
---------------------------------------------------------------------------
    The FCC's vicarious liability order invites the plaintiffs' bar to 
reach up the chain to the defendant with the deepest possible pocket. 
This, in turn, has led to a dogpile of lawsuits being brought against 
security equipment manufacturers for calls mentioning their branded 
equipment (even when the calls were not made to sell that equipment, 
but rather the caller's own $39.99 a month monitoring services). 
Further, lawsuits are being brought against major corporations for 
third-party calls made by independent contractors not authorized in any 
way to call as, or on behalf of, the company.
    And in the case of an employee gone rogue who violates the TCPA's 
rules by breaking all of his own company's policies, the company finds 
itself facing potentially annihilating liability if it loses on the 
vicarious liability fight, and enormous pressure to settle. One 
insurance company, for example, recently completed settlement of a $23 
million class action that was brought by the recipient of a facsimile 
sent against company policy by an insurance agent who contracted on his 
own with a fax blaster to set up a server and send faxes in a home 
garage. When alleged vicarious liability for millions of faxes would be 
in the billions of dollars, it is easy to see how enormous the pressure 
to settle can be. And when there is a deep pocket defendant to put on 
the ropes, it is no wonder that the fax blaster who actually sent the 
faxes (after ensuring clients that such transmissions were legal) was 
not sued by the plaintiff.
    Companies are facing allegations of vicarious liability for calls 
and texts for which no source can even be ascertained; if a prerecorded 
marketing message promises a free gift card for a certain retailer, 
that retailer finds itself facing demands under the TCPA under the 
argument that it is liable under some ratification or apparent 
authority aspect of vicarious liability.
d. Revocation of Prior Express Consent Also Driving New Lawsuits
    A fourth breeding ground for modern TCPA litigations is found in 
situations in which a company is calling its customer, at the customer-
provided number, but then the recipient claims to have revoked consent 
for further calls. The Third Circuit stood alone in 2013 when it held 
that the TCPA provides consumers with the right to revoke their prior 
express consent to be contacted on cellular telephones by autodialing 
systems.\36\ Before this point, there were no revocation-based TCPA 
litigations; now, with the FCC majority stating in its July 2015 Order 
that prior consent can be revoked at any time and in any manner, claims 
that consent was revoked has become one of the fastest growing areas of 
TCPA litigation.\37\
---------------------------------------------------------------------------
    \36\ Gager v. Dell Financial Services, LLC, 727 F.3d 265, 272 (3d 
Cir. 2013).
    \37\ Commissioner O'Rielly points out that the TCPA itself had no 
mention of revocation or a means to do so, and that the FCC majority 
has simply invented a vague and unworkable new ``common-law'' based 
rule never vetted by Congress. See July 2015 Order, 30 FCC Rcd., 
O'Rielly Dissent, at 8095.
---------------------------------------------------------------------------
    The problem with allowing revocation by any means when larger 
businesses are making informational and/or transactional calls 
(sometimes through a variety of vendors) is that TCPA plaintiffs and 
their lawyers plan to generate suits by ``revoking consent'' for 
further calls with an oral statement, in the hopes that the customer 
representative does not capture that oral request.\38\ Other plaintiffs 
are sending convoluted text messages that a system might not recognize 
as a ``STOP'' message, and then claiming consent had been revoked. One 
demand I recently dealt with for a client involved someone who never 
replied ``STOP'' as the text messages instructed him to do whenever he 
wanted to opt out of the text reminders, and instead sent a wordy text 
message ``withdrawing permission for future calls to his cellular phone 
number.'' The system did not recognize this language, and in any case 
would only have been able to stop text messages and not phone calls; 
the determined consumer insisted that he had revoked consent for all 
communications, and was entitled to tens of thousands of dollars for 
later calls he received.
---------------------------------------------------------------------------
    \38\ For example, in April 2014, the Davis Law Firm of 
Jacksonville, Florida, posted an article providing 5 steps to ``stop 
calls'' from a targeted company and to potentially make money under the 
TCPA. See http://davispllc.com/lawyer/2014/04/16/Consumer-Protection/
How-to-Get-DirecTV-to-Stop-Calling-You-_bl12785.htm, last accessed 
November 6, 2014. Step 2 instructs cell phone owners to say ``I revoke 
my consent for you to call me'' and then to hang up. Thereafter, the 
firm asks the cell phone owner to keep a detailed call log regarding 
any additional calls to be the basis of a TCPA lawsuit. See id.
---------------------------------------------------------------------------
    Another issue with the newly announced ``revocation'' right is that 
the FCC majority implies that it should be instantaneous in 
implementation, without giving the business time to receive and process 
DNC requests from its vendors and/or to adjust its outbound calls. (In 
contrast, a business knows that DNC prohibitions attach to a number 30 
days after it is entered into the DNC list.\39\) Thus, claims of 
``immediate'' revocation rights are leading to even more ``gotcha'' 
litigation, including claims that a consumer revoked prior consent on a 
Monday morning but received three more calls over the next few days 
before all calls stopped--and that $4,500 in willful calling damages 
for the three calls are thus owed to that consumer under the TCPA.
---------------------------------------------------------------------------
    \39\ See 47 C.F.R. Sec. 64.1200 (``Persons or entities making calls 
for telemarketing purposes (or on whose behalf such calls are made) 
must honor a residential subscriber's do-not-call request within a 
reasonable time from the date such request is made. This period may not 
exceed thirty days from the date of such request.'').
---------------------------------------------------------------------------
    Thus, revocation-based claims--like those claims based on 
``capacity'' arguments, recycled or wrongly-provided numbers, and 
vicarious liability allegations--are certain to increase in number as 
TCPA litigation continues to grow exponentially throughout the country. 
Another certainty is that litigation abuse, too, will spread.
IV. Examples of TCPA Litigation Abuse
    As I mentioned at the start of this testimony, I have defended 
various companies facing TCPA claims for more than a decade. As a 
junior associate in 2001, I began working on a then-rare TCPA case in 
which a client was sued for millions of faxes an affiliated company had 
sent in a three-day period using a fax blaster service. I was shocked 
to see a statute (which I had not heard anything about in law school) 
that could create such staggering statutory liability--my client 
settled for millions rather than face billions of dollars in statutory 
liability, and because its insurance policy covered the claims 
(something that is no longer the case). My introduction to the TCPA was 
during a time when the few lawsuits being brought still focused on the 
kinds of unsolicited facsimiles and cold-call telemarketing that the 
statute was intended to address when it was authored and adopted in 
1991. But seeing just how lucrative TCPA lawsuits can be, various 
serial TCPA plaintiffs and TCPA-focused attorneys are doing everything 
they can to find and bring TCPA actions against American businesses.
a. Serial TCPA Plaintiffs
    Serial plaintiffs amassing multiple phone numbers at which to 
receive calls are making a living through TCPA demands and litigation. 
Some focus on sending copious demand letters to businesses, seeking 
several thousand dollars from each company. An early example was a man 
in San Diego who acquired a telephone number of 619-999-9999, even 
though such telephone numbers were normally not given out to 
consumers--he found out that companies at the time whose systems 
required some telephone number be entered into a phone number field had 
set a default of the 999-9999 to fill in after an area code, and his 
number was getting thousands of calls each month from systems of 
various companies. As Commissioner Pai has noted, this man even hired 
staff to log every wrong-number call he received, issue demand letters 
to purported violators, file actions, and negotiate settlements; only 
after he was the lead plaintiff in over 600 lawsuits did the courts 
finally agree that he was a ``vexatious litigant.'' \40\ But what 
Commissioner Pai does not know (and I do, as I was brought in to deal 
with later demands from the phone's new ``owner'' after this man was 
barred from his ``TCPA business''), is that the man then leased this 
telephone number to a friend who started her own business, paying 
commissions to the owner of the 999-9999 number for the calls she 
received and acting with her part-time staff of paralegal support to 
send TCPA demand letters to hundreds of businesses. It was only after 
this contract came to light that her ``TCPA business'', too, was 
finally shuttered.
---------------------------------------------------------------------------
    \40\ July 2015 FCC Order, Pai Dissent, 30 FCC Rcd. at 8073.
---------------------------------------------------------------------------
    But other consumers in the business of TCPA actions continue to 
make their living (and a good living, too) through this statute. For 
example, in the past year alone, one Pennsylvania woman has filed at 
least eleven (11) TCPA cases in the Western District of Pennsylvania 
and at least twenty (20) pre-litigation demand letters. When a company 
she had sued deposed her recently, it found that she had intentionally 
bought 35 cell phones and subscribed to cellular service lines for the 
sole purpose of receiving calls under which she can assert ``wrong 
number'' TCPA violations. Moreover, she specifically sought phone 
numbers in economically depressed area codes to make the receipt of 
collections calls more likely (i.e., she lives in PA, but acquires FL 
area code numbers). She carries all 35 plus phones with her when she 
travels so she can keep up on her recordkeeping--she logs all calls 
coming into the telephone numbers in efforts to reach the previous 
owner of the cellular phone. And she even loads more minutes as needed 
onto her phones to ensure she keeps the lines open for business.
    Another constant TCPA litigant, an Ohio man, has been bringing TCPA 
actions for fifteen years, and in recent years he has lent his name to 
actions in Federal court outside of Ohio as well, including in 
Wisconsin, Florida, Illinois, New York, West Virginia, California, and 
Connecticut. As an example of one recent suit, this consumer was the 
named plaintiff in a TCPA action settled by American Electric Power in 
2015. He received two (2) marketing phone calls while on the Federal 
DNC (entitling him to up to $1,500 for the second call, if the company 
had no valid defenses), but his named-plaintiff incentive payment under 
the settlement is $12,500. Tellingly, this man's actual registration on 
the DNC list only happened ten years into his TCPA career. Because it 
was so clear he wanted marketing calls (and was making his living by 
receiving them), he was ordered by one state court in 2005 to register 
his phone lines with the Federal DNC, but he appealed that order to the 
Ohio Supreme Court, which held in 2007 that he was not required to 
register his telephone numbers. Later, with the shift in TCPA 
litigation to autodialed/prerecorded calls, he registered his lines 
(via a settlement in 2011) and now sues for autodial/prerecorded calls, 
as well as violations of his registered Federal DNC status. Like many 
persons supplementing their incomes or fully depending on TCPA monies, 
he has the usual mechanisms for trapping callers (recordings and logs) 
and generating demand letters.
    Indeed, there are plenty of ``do-it-yourself'' guides on the 
Internet advising consumers how to bring TCPA claims and rake in 
significant money. What businesses are finding problematic in the past 
few years lawsuits and demands brought by family members, roommates, or 
partners of a customer who gave that person's telephone number as his 
or her own. In actions I am currently defending for various companies, 
the plaintiff or class plaintiff is the daughter, the aunt, the 
boyfriend, the son, the mother-in-law, or the guardian of the customer 
who provided their telephone number to a company as his or her own 
number. There are indications that some such provisions are happening 
on purpose, to try to create viable fact patterns for a TCPA claim by 
that family member or friend. Indeed, I had one recent demand letter in 
which the telephone number the customer provided actually belonged to a 
well-known TCPA lawyer, who then of course threatened suit and demanded 
payment of thousands of dollars.
    The consumers abusing the statute to ensure that calls are placed 
to them, so that they can support themselves from demands and lawsuits 
filed against American businesses, are bad enough; as detailed below, 
the tactics of some of the lawyers specializing in TCPA claims are even 
worse.
b. Over-incentivized TCPA Attorneys
    As already detailed above, the TCPA (which has no attorneys' fees 
provision) provides for hefty statutory damages that incentivize 
attorneys to start litigations and carve fees out of the uncapped 
statutory damages that are available. One Connecticut-based firm, 
Lemberg Law, LLC, even came out with a smartphone application, ``Block 
Calls, Get Cash,'' that potential clients could download to make their 
call data directly available to the firm, which could review inbound 
calls to look for potential litigation targets.\41\ The app's website 
states that ``with no out-of-pocket cost for the app or legal fees, its 
users will `laugh all the way to the bank.' '' \42\ And at least one 
other firm has followed suit with its own competing application.
---------------------------------------------------------------------------
    \41\ See Reply Comments of the U.S. Chamber of Commerce, CG Docket 
02-278, at 4 (filed Dec. 1, 2014) (citing Lawsuit Abuse? There's an App 
for That, U.S. Chamber Institute for Legal Reform (Oct. 29, 2014), 
http://www.instituteforlegalreform.com/resource/lawsuit-abuse-theres-
an-app-for-that/).
    \42\ Id.
---------------------------------------------------------------------------
    Lemberg Law is now engaged in litigation with an associate who 
withdrew to start up her own lucrative TCPA shop, and its business 
practices are being revealed. In counterclaims against Lemberg Law, 
which sued the associate for absconding with clients and the settlement 
monies they could engender, she claims that demands are filed by 
Lemberg Law for consumers who have no idea that they have ``retained'' 
a law firm to represent them and who were not even consulted about 
complaints filed on their behalves.\43\ In fact, the former associate 
claims that the first time some of these consumers find out about their 
own lawsuit is when Lemberg tries to contact the client to send them 
their portion of a settlement agreement (after accessing the consumer's 
private phone call information, crafting demands based on calls, and 
carving out Lemberg's own fees and costs, including a $595 
``PrivacyStar'' Cost).\44\
---------------------------------------------------------------------------
    \43\ See, e.g., Amended Answer, Affirmative Defenses, and 
Counterclaim, Dkt. No. 32, Filed 11/12/15, in Lemberg Law, LLC v. Tammy 
Hussin and the Hussin Law Offices, P.C., Case No. 3:15-cv-00737-MPS (D. 
Conn), at  1.k, 1.l, 1.o, and 1.p; see also 1.p (``Based on Hussin's 
belief that her paralegal had confirmed the facts with the new clients, 
Hussin unknowingly filed complaints on behalf of Californians who were 
unaware of legal representation.'').
    \44\ See, e.g., id. at Affirmative Defenses,  1.f, 1.g, 1.k; see 
also 1.s (``Lemberg insisted on taking a 40 percent referral fee for 
new ``clients' without even having discussed legal representation with 
them and without having obtained a signed fee agreement. Upon reaching 
the new ``clients'' when Hussin transferred the cases to her firm, most 
of them had no knowledge of Lemberg's firm and were unaware of legal 
representation, yet Lemberg insisted on taking a 40 percent referral 
fee on said cases.'').
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    As just one more example of many, Anderson & Wanca is a Midwest-
based firm focused on bringing facsimile actions after receiving, in 
discovery years ago, a roster of clients from a fax-blaster named B2B. 
In a recent decision, the Seventh Circuit upheld $16,000 worth of 
statutory damages against a small digital hearing aid company in Terra 
Haute, Indiana, for 32 facsimile ads, but noted its distaste in doing 
so:

        Fax paper and ink were once expensive, and this may be why 
        Congress enacted the TCPA, but they are not costly today. As a 
        result, what motivates TCPA suits is not simply the fact that 
        an unrequested ad arrived on a fax machine. Instead, there is 
        evidence that the pervasive nature of junk-fax litigation is 
        best explained this way: it has blossomed into a national cash 
        cow for plaintiff's attorneys specializing in TCPA disputes. We 
        doubt that Congress intended the TCPA, which it crafted as a 
        consumer-protection law, to become the means of targeting small 
        businesses. Yet in practice, the TCPA is nailing the little 
        guy, while plaintiffs' attorneys take a big cut. Plaintiffs' 
        counsel in this case admitted, at oral argument, that they 
        obtained B2B's hard drive and used information on it to find 
        plaintiffs. They currently have about 100 TCPA suits 
        pending.\45\
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    \45\ Bridgeview Health Care Center, Ltd. v. Jerry Clark, 2016 WL 
10852333, *5 (7th Cir. Mar. 21, 2016) (emphasis added; internal 
citations and quotations omitted).

    As the Seventh Circuit has recognized in its recent decision quoted 
above, it is a perversion of the original intent of the TCPA to 
``target small businesses'' who are not alleged to have caused actual 
harm. And I should note that Anderson & Wanca is not always so unlucky 
as to only get $16,000 verdicts; that firm has been the recipient of 
multi-million dollar fees awards in the past few years from class 
action settlements as well.
V. Conclusion and Recommendations
    The TCPA was designed to protect privacy and to stop invasive and 
persistent telemarketing, primarily of the ``cold call'' kind, that 
ensues when telemarketers use dialing technology to randomly or 
sequentially dial numbers. It was not designed to subject companies to 
claims regarding ``autodialed'' calls when they reach out to targeted, 
segmented lists of their own customers who have a common need for 
information using the telephone numbers (including cellular phone 
numbers) provided by those customers. It was not intended to apply to 
text messages, and it was not designed to cover collections calls, 
which have independent sets of rules to ensure that those calls are not 
abusive or overly intrusive.
    Congress needs to take a hard look at updating the TCPA in a manner 
that provides more certainty and protection for businesses who need to 
legitimately communicate with their customers and employees, and who 
strive to comply with the law but who, for example, may unknowingly be 
calling a reassigned number, or have a customer representative err in 
recording a revocation request. If Congress wishes to pull text 
messages into the TCPA's protection, then it should assess what rules 
should apply.
    In sum, considering the unfair and unintended onslaught of TCPA 
cases hammering American businesses, the following updates to the 
statute could be taken under consideration.
    Statute of Limitations: The TCPA contains no statute of 
limitations, and so has fallen into the four-year default, which makes 
no sense for calls/faxes that are supposedly invasions of privacy that 
the consumer knows about at the moment they are placed. Class actions 
reach staggering amounts of damages because class plaintiffs seek four 
years' worth of calling data and liability. (I defended one putative 
class action brought against a company for a single text sent three 
years and ten months before Plaintiff filed his suit.) The TCPA's time 
to bring suit should be reasonably limited, as is the case with the 
other Federal statutes providing private rights of action for statutory 
damages.\46\
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    \46\ See, e.g., Electronic Funds Transfer Act (15 U.S.C. 
Sec. 1693), Section 1693(m) (statute of limitations--1 year); Fair Debt 
Collection Practices Act (15 U.S.C. Sec. 1692), Section 1692(k) 
(statute of limitations--1 year).
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    Capping Statutory Damages and Adding Provisions for Reasonable 
Attorneys' Fees: Like every other Federal statute providing statutory 
damages and a private right of action to consumers to seek those 
damages, the TCPA should have a cap on the amount of individual and 
class action damages that can be sought.\47\ There is no better way to 
curb litigation abuse, bring the TCPA in line with its sister statutes, 
and avoid unconstitutional and excessive fines for technical violations 
causing no actual harm.
---------------------------------------------------------------------------
    \47\ See, e.g., Electronic Funds Transfer Act (15 U.S.C. 
Sec. 1693), Section 1693(m); Fair Debt Collection Practices Act (15 
U.S.C. Sec. 1692), Section 1692(k); Truth in Lending Act (15 U.S.C. 
Sec. 1631 et. al), Section 1640; Fair Credit Reporting Act (15 U.S.C. 
Sec. 1681 et. al.), Section 1681(o). (Several of these statutes also 
permit defendants to recover costs/fees when actions are shown to have 
been brought in bad faith.)
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    Affirmative Defenses: As businesses are targeted for calls under 
Section 227(b), as well as for the 227(c) calls that Congress knew 
could be made in error by a business acting in good faith to follow the 
appropriate policies and procedures (see Part II above), the 
affirmative defenses available in Section 227(c) should also be 
imported into Section 227(b) to provide protection to businesses 
working in good faith to comply with the TCPA.
    Capacity: The ``capacity'' of an autodialer should be interpreted 
for past calls as written in the text of the statute, meaning only 
those devices that have the actual ability to randomly/sequentially 
dial telephone calls would be actionable. And if Congress wishes to 
limit some other sort of calling technologies or text messages, new and 
more precise language should be drafted, vetted, and implemented after 
a notice period to companies so that they can comply with statutory 
requirements.
    Reassigned or Wrongly-Provided Number: Businesses should not be 
punished via TCPA lawsuits when they, in good faith, call a customer-
provided phone number that now belongs to a new party unless and until 
the recipient informs the caller that the number is wrong and the 
business has a reasonable time to implement that change in its records. 
(If, after that notice and reasonable time the company continues to 
call, then lack of prior consent would be established for future 
calls.)
    Vicarious Liability: The FCC has interpreted the TCPA to allow ``on 
behalf of'' liability for prerecorded/autodialed calls, something not 
specifically provided for in the statute. Among other things, the TCPA 
should be revised to define any such vicarious liability so that it 
would exist only against the appropriate entities--those persons who 
place the calls, or who retain a telemarketer to place calls, or who 
authorize an agent to place calls on their behalf.
    Bad Actors: The TCPA should be reformed to focus on the actual bad 
actors (i.e., fraudulent calls from ``Rachel from Cardmember 
Services'', with spoofed numbers in Caller ID fields to hide the 
identity of caller), instead of companies trying to contact their 
consumers for a legitimate business purposes.
    Address New Technologies, Such As Text Messaging: A text message is 
not the same as a call, and courts are wrong in treating them equally. 
Should Congress wish to set rules on text messaging within the TCPA, it 
should do so through the regular channels of drafting, vetting, and 
implementing new statutory language.
    Revocation: If a consumer that has provided a telephone number to a 
company no longer wishes to receive communications at that number, 
there should be a set process (as in the Fair Debt Collection Practices 
Act) on how the business should be told of the revocation, and a 
reasonable time for the company to implement that change.
    Importantly, when considering these changes, Congress should keep 
in mind what TCPA reform should not include policies that will:

   Increase in the number of phone solicitations;

   Encourage abusive or harassing debt collection practices 
        (which are addressed, in any case, by the FDCPA); and

   Create an end-run around the Federal and Internal Do Not 
        Call List rules.

    The changes discussed above--which would help to protect American 
companies from expensive and damaging litigation abuse--would not risk 
any of these repercussions. Thus, we urge this Committee to revisit the 
TCPA to bring this 20th Century statute in line with 21st Century 
challenges. Twenty-five years have passed, and it is evident that the 
TCPA has had a negative impact on businesses that Congress never 
intended when first enacting this law in 1991. We appreciate the 
Committee's calling of today's hearing and stand ready to work with you 
on this important issue.
                                 ******
    Thank you for inviting me to testify. I am happy to answer any 
questions you may have.

    The Chairman. Thank you, Ms. Wahlquist.
    Ms. Saunders.

    Ms. Saunders's oral remarks at this May 18, 2016, hearing and 
written prepared statement submitted to the Committee before the 
hearing follow.
    On May 20, 2016, Ms. Saunders wrote to the Committee and noted that 
she had ``referred to the incorrect row of figures supplied by the FTC. 
As a result, in those parts of my testimony discussing the number of 
complaints to the FTC about robocalls, my numbers were slightly off.''
    Here are Ms. Saunders corrections:

   There were 2,200,000 complaints about robocalls to the FTC 
        (not 3,500,000) in 2015.

   There were an average of 184,000 complaints to the FTC about 
        robocalls each month (not 298,000) that year.

   Complaint numbers have spiked in the first four months of 
        2016 which when annualized indicate that there may be 3,300,000 
        complaints to the FTC about robocalls in 2016 (not 5,200,000 
        complaints).

   For every 1,000 complaints to the FTC, less than two (not 
        ``only one'') lawsuits are filed. Most consumers who receive 
        robocalls do not take the time to complain to a Federal agency 
        and even a tinier percentage, less than two-tenths of 1 percent 
        (not one-tenth of 1 percent) actually files a lawsuit.

           STATEMENT OF MARGOT SAUNDERS, OF COUNSEL, 
                  NATIONAL CONSUMER LAW CENTER

    Ms. Saunders. Chairman Thune, Senator Nelson, Senator 
Markey, members of the Committee, thank you very much for 
inviting me to testify today on behalf of the National Consumer 
Law Center and eight other national groups that collectively 
represent millions of American consumers. We believe that 
robocalls pose a severe problem, and we ask that you defend the 
TCPA and work to strengthen it.
    Twenty-five years ago, the TCPA was passed because of the 
complaints about one line of robocalls which are still pouring 
in. The problem is that robocalls cost only a tiny fraction of 
a penny per call, making it cheaper for businesses to make the 
calls than to be careful about who they're calling.
    The TCPA was designed to ensure that consumers control who 
robocalls them on their cell phone by requiring express consent 
before the calls can be made, unless there is an emergency. And 
many of the examples that Senator Thune made of--raised were 
emergencies that should fall under the exception already in the 
law.
    The industry is making extravagant claims about spurious 
lawsuits and wrongful class-actions, churning new claims, 
litigating TCPA--in TCPA litigation, all to support their 
insistence that the law be changed. Yet, the judicial system 
has a--robust mechanisms to protect against meritless claims. 
As TCPA claims don't lead to attorneys' fees, the costs of 
initiating, investigating, and litigating a lawsuit already 
restricts these cases only to those in which numerous illegal 
calls have been made.
    In 2015, there were over three and a half million 
complaints to the FTC, far more than any other issue for 
robocalls. For every 1,000 complaints, only one lawsuit was 
filed. Most consumers who've received unwanted robocalls don't 
complain to a Federal agency. Only one-tenth of 1 percent of 
those that did complain filed.
    Here are a few of many examples of the cases brought to 
stop the unwanted barrage of robocalls: Yahoo sent 27,000 
wrong-number text messages to one consumer, refusing to stop 
even after the FCC got involved to ask them to stop. State Farm 
Bank made 327 robocalls to one consumer in 6 months, seeking to 
collect a debt owed by someone else. Time Warner Cable used an 
automated system involving zero human capacity to make 153 
robocalls to a woman who had never been a customer, including 
74 calls made after she filed suit.
    In all of these cases, business entities set loose an 
automated system that called the consumer's phone multiple 
times, even after the consumer's repeated attempts to stop the 
calls. In each case, the caller had decided that it was simply 
more cost-effective to ignore the expressed wishes of these 
consumers and continue to make these automated calls.
    Seventy million people, approximately, rely in this country 
on prepaid or lifeline cell phones which only provide a fixed 
number of minutes. Many of these consumers are low-income, and 
they rely on these limited minutes for essential calls. And 
unwanted robocalls eat into these essential minutes. Any one of 
the industry proposals would lead to the receipt of more 
unwanted robocalls to all cell phone users, and would be 
devastating to these users with limited minutes.
    For example, the industry argues that the FCC's 
longstanding definition of ``autodialer'' is wrong, based on 
the notion that the current definition covers too many 
instruments, thus making the distinction effectively 
meaningless. But, the definition the industry proposes would 
exclude all of the technology that's currently being used to 
make calls.
    Unfortunately, Section 301 of the Budget Act passed last 
October to create an exemption to the TCPA that permits 
collectors of Federal debt, primarily student loan borrowers 
and--as well as taxpayers pursued by private collectors to be 
made without the consent of the consumer. This is dangerous 
precedent that will impact over 61 million Americans, and it 
should be repealed. We strongly support the HANGUP Act, which 
repeals Section 301. It is evident the consumers need more 
protection from such abuses, not less.
    Continued enforcement of the TCPA is critical, and we ask 
that you support consumers in this battle.
    Thank you.
    [The prepared statement of Ms. Saunders follows:]

  Prepared Statement of Margot Freeman Saunders, Of Counsel, National 
    Consumer Law Center, On behalf of the low-income clients of the 
   National Consumer Law Center, and Americans for Financial Reform, 
Center for Responsible Lending, Consumer Action, Consumer Federation of 
      America, Consumers Union, National Association of Consumer 
    Advocates, National Center for Law and Economic Justice, Public 
                    Citizen, and MFY Legal Services
    Chairman Thune, Senator Nelson, and Members of the Committee, I 
appreciate the opportunity to testify today on the importance of 
maintaining the integrity of the Telephone Consumer Protection Act 
(TCPA) for consumers. I provide my testimony here today on behalf of 
the low-income clients of the National Consumer Law Center \1\ (NCLC), 
as well as Americans for Financial Reform, Center for Responsible 
Lending, Consumer Action, Consumer Federation of America, Consumers 
Union, National Association of Consumer Advocates, National Center for 
Law and Economic Justice, Public Citizen, and MFY Legal Services.\2\
---------------------------------------------------------------------------
    \1\ The National Consumer Law Center (NCLC) is a non-profit 
corporation founded in 1969 to assist legal services, consumer law 
attorneys, consumer advocates and public policy makers in using the 
powerful and complex tools of consumer law for just and fair treatment 
for all in the economic marketplace. NCLC has expertise in protecting 
low-income customer access to telecommunications, energy and water 
services in proceedings at state utility commissions, the FCC and FERC. 
We publish and annually supplement nineteen practice treatises that 
describe the law currently applicable to all types of consumer 
transactions, including Access to Utility Service (5th ed. 2011), 
covering telecommunications generally, and Federal Deception Law (2d 
ed. 2016), which includes a chapter on the Telephone Consumer 
Protection Act.
    \2\ A description of all the groups on whose behalf this testimony 
is provided is included in an Appendix.
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    I am here today, on behalf of the millions of consumers whom we 
represent, to ask you to defend and strengthen the Telephone Consumer 
Protection Act as an essential bulwark against unwanted, annoying, 
harassing, and even dangerous, robocalls.
    ``If robocalls were a disease, they would be an epidemic.'' \3\ An 
average of 298,000 complaints were made to the Federal Trade Commission 
(FTC) every month in 2015 about robocalls.\4\ Indeed, some estimate 
that 35 percent of all calls placed in the U.S. are robocalls.\5\ The 
problem is escalating: the FTC reported more than 3.5 million 
complaints about unwanted calls in 2015--over twice as many complaints 
as there were in 2010.\6\ Almost half of these calls (1,823,897) 
occurred after the consumer had already requested that the company stop 
calling.\7\ Indeed, in the first four months of 2016, the complaint 
numbers have spiked again, increasing to an average of over 440,000 a 
month, which will produce a yearly rate of over 5.2 million 
complaints.\8\
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    \3\ Rage Against Robocalls, Consumer Reports (July 28, 2015) 
[hereinafter Rage Against Robocalls], available at http://
www.consumerreports.org/cro/magazine/2015/07/rage-against-robocalls/
index.htm.
    \4\ Federal Trade Commission, National Do Not Call Registry Data 
Book, FY 2015, at 5 (Nov. 2015).
    \5\ Rage Against Robocalls.
    \6\ Federal Trade Commission, National Do Not Call Registry Data 
Book, FY 2015, at 4 (Nov. 2015).
    \7\ Federal Trade Commission, National Do Not Call Registry Data 
Book, FY 2015, at 5 (Nov. 2015).
    \8\ The 2016 figures for robocall complaints to the FTC's Do Not 
Call Registry were supplied by the FTC's Bureau of Consumer Protection 
on May 12, 2016. The 2016 annualized complaint data was determined by 
averaging the total complaints received in the first four months and 
then multiplying that monthly average by twelve.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





    Congress passed the Telephone Consumer Protection Act \9\ (TCPA) in 
1991 in direct response to ``[v]oluminous consumer complaints about 
abuses of telephone technology--for example, computerized calls 
dispatched to private homes.'' \10\ Yet 25 years later, the complaints 
are still pouring in. Robocalls are very inexpensive to make. Both 
legitimate callers and bad actors can discharge tens of millions of 
robocalls over the course of a day at a fraction of a penny per 
call.\11\ The TCPA needs to be strengthened.
---------------------------------------------------------------------------
    \9\ 47 U.S.C. Sec. 227.
    \10\ Mims v. Arrow Fin. Servs., L.L.C., 132 S. Ct. 740, 744 (2012).
    \11\ See e.g., Call-Em-All Pricing, which quotes pricing from a 
high of 6 cents per call to $7.50 per month ``for one inclusive monthly 
fee. Call and text as much as you need.'' https://www.call-em-all.com/
pricing, (last accessed May 13, 2016).44, 73
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    The problem of unwanted and harassing robocalls is growing worse. 
No one likes robocalls. Consumers in every district and every state are 
complaining. The current structure of the TCPA does provide some 
protection, but it does not provide enough.
    In this testimony I will cover the following topics:

  1.  The role that the Telephone Consumer Protection Act plays in 
        protecting consumers from unwanted and invasive calls and texts 
        to cell phones.

  2.  The reasons why the FCC's 2015 Omnibus Order \12\ on the TCPA was 
        correct.
---------------------------------------------------------------------------
    \12\ In re Rules and Regulations Implementing the Telephone 
Consumer Protection Act of 1991, CG Docket No. 02-278, Report and 
Order, 30 FCC Rcd. 7961 (2015) [hereinafter 2015 TCPA Declaratory 
Ruling and Order].

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  3.  The importance of passing the HANGUP Act.

  4.  Needed additions to Federal law to deal with abusive robocalling 
        to consumers.

  5.  A real fix for the reassigned number problem.

  6.  Vicarious liability rules under the TCPA are appropriate.
1. The Telephone Consumer Protection Act provides consumers critically 
        important protections from unwanted and invasive calls and 
        texts to cell phones.
    Privacy Concerns. The TCPA is an essential privacy protection law, 
intended to protect consumers from the intrusions of unwanted automated 
and prerecorded calls to cell phones. But for the exception created in 
the Budget Act last October,\13\ the TCPA permits these calls only if 
the consumer has given ``prior express consent'' to receive them.\14\ 
Calls for emergency purposes are excluded from this prohibition. When 
it enacted the TCPA in 1991, Congress found that automated and 
prerecorded calls are ``a nuisance and an invasion of privacy, 
regardless of the type of call . . .'' \15\ They are no less a nuisance 
and an invasion of privacy today.
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    \13\ Congress amended the TCPA in 2015 to allow calls to be made 
without consent to collect a debt owed to or guaranteed by the United 
States, subject to regulations issued by the FCC. Pub. L. No. 114-74, 
129 Stat. 584 (2015) (Sec. 301).
    \14\ 47 U.S.C. Sec. 227(b)(1)(A)(iii).
    \15\ TCPA, Pub. L. No. 102-243, 105 Stat. 2394 (1991) Sec. Sec. 12-
13.
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    Heavy impact on struggling households. Many people in the United 
States today rely exclusively on their cell phones as their only means 
of communication. These consumers include:

   Close to 70 percent of adults aged 25-29 and over 67 percent 
        of adults aged 30-34;

   Nearly 60 percent of persons in households below the poverty 
        line;

   59 percent of Hispanics and Latinos, and 46 percent of 
        African Americans.\16\
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    \16\ See Stephen Blumberg and Julian Luke, U.S. Dep't of Health and 
Human Services, National Center for Health Statistics, Wireless 
Substitution: Early Release of Estimates From the National Health 
Interview Survey, July-December 2014, at 6 (June 2015).

    Many, if not most, of the households living below the poverty line 
rely on pay-as-you-go, limited-minute prepaid wireless products. These 
wireless plans have been growing in use, especially among low-income 
consumers and consumers with poor credit profiles.\17\ These prepaid 
wireless products provide a fixed number of minutes, and often a fixed 
number of texts. After these limits are exceeded, consumers must 
purchase a package of new minutes periodically to maintain their 
service. Consumers in such plans are billed for incoming calls in 
addition to outgoing calls, making them very sensitive to repetitive 
incoming calls--especially calls that they do not want.
---------------------------------------------------------------------------
    \17\ Federal Communications Commission, Annual Report and Analysis 
of Competitive Market Conditions With Respect to Mobile Wireless, 
Eighteenth Report, WT Docket No. 15-125,  44, 73, 95, 96 (Dec. 23, 
2015).
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    Additionally, almost 12.5 million low-income households maintain 
essential telephone service through the Federal Lifeline Assistance 
Program.\18\ Most of these Lifeline participants have service through a 
prepaid wireless Lifeline Program, which most commonly limits usage to 
only 250 minutes a month for the entire household.\19\
---------------------------------------------------------------------------
    \18\ Universal Service Administrative Company, 2014 Annual Report 9 
(2014).
    \19\ Federal Communications Commission, Second Further Notice of 
Proposed Rulemaking, Order on Reconsideration, Second Report and Order, 
and Memorandum Opinion and Order 15-71,  16 (Rel. June 22, 2015).
---------------------------------------------------------------------------
    Allowing calls without the consent of the person called, limiting 
the right to revoke consent, or curbing the definition of autodialer--
all proposals made by the calling industry in repeated filings before 
the FCC--would be devastating for households struggling to afford 
essential telephone service. Any one of these changes would lead to the 
receipt of more unwanted and unconsented-to calls that would further 
deplete the scarce minutes available for the Lifeline household. For 
the lower-income consumers and households that struggle to afford 
telephone service, any one of these changes would use up the minutes on 
which the entire Lifeline household depends to access health care, 
transportation, emergency, and other essential services, and to avoid 
social isolation.
    Public safety threatened. Cell phones accompany people wherever 
they go, including in cars. Too often, calls and texts are answered 
while people are driving because so many cannot resist the imperious 
ring of the wireless telephone. Receiving cell phone calls while 
driving threatens public safety. The National Highway Traffic Safety 
Administration found that cell phone use contributed to 995 (or 18 
percent) of fatalities in distraction-related crashes in 2009. More 
robocalls will inevitably lead to more distracted drivers and, 
inescapably, more accidents.\20\
---------------------------------------------------------------------------
    \20\ See U.S. Dep't of Transportation, Facts and Statistics, 
available at http://www.dis
traction.gov/stats-research-laws/facts-and-statistics.html (last 
accessed Jan. 14, 2016) (citing 3,154 deaths and 424,000 injuries from 
distracted drivers in 2013, and noting that text messaging, because of 
the visual, manual, and cognitive attention required from the driver, 
is ``by far the most alarming distraction''). See also Injury 
Prevention & Control: Motor Vehicle Safety: Distracted Driving, Centers 
for Disease Control and Prevention, available at http://www.cdc.gov/
motorvehiclesafety/distracted_driving/ (last accessed Jan. 14, 2016) 
(``Each day in the United States, more than 9 people are killed and 
more than 1,153 people are injured in crashes that are reported to 
involve a distracted driver.'').
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    Texts are as intrusive as calls. The TCPA's prohibitions against 
unwanted communications apply to both phone calls and texts.\21\ This 
is because text messages are just as intrusive and costly to consumers 
as phone calls. And, particularly for low-income consumers using 
prepaid wireless plans, the unwanted texts deplete the limited data 
they pay for and rely on.
---------------------------------------------------------------------------
    \21\ See In re Rules and Regulations Implementing the Telephone 
Consumer Protection Act of 1991, CG Docket No. 02-278 Report and Order, 
18 FCC Rcd. 14014 (2003) ( 165).
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    As noted in a recent Gallup study: ``Texting, using a cellphone and 
sending and reading e-mail messages are the most frequently used forms 
of non-personal communication for adult Americans.'' \22\ As Americans' 
use of texts as a regular means of communication increases, unwanted 
texts become more and more invasive. People now respond to text 
messages in the same reflexive way they respond to calls--the beep of a 
text demands an immediate acknowledgment. As a result, autodialed texts 
that arrive in droves interrupt, annoy and harass consumers just as 
robodialed calls do. And these unwelcome texts use up precious limits 
for consumers whose cell phone plans impose restrictions, such as those 
consumers on prepaid or Lifeline plans.
---------------------------------------------------------------------------
    \22\ Frank Newport, The New Era of Communication Among Americans, 
Gallup (Nov. 10, 2014), available at http://www.gallup.com/poll/179288/
new-era-communication-americans.aspx.
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    Litigation protects consumers and is justified by the number of 
complaints about robocalls. In addition to the hundreds of thousands of 
complaints made monthly to government agencies, a tiny percentage of 
consumers who are plagued with repeated and unwanted robocalls and 
prerecorded calls do file suit. A small selection of cases illustrates 
just some of the abuses to which consumers have been subjected:

   Dominguez v. Yahoo, Inc.\23\--Yahoo sent 27,809 wrong number 
        text messages in 17 months to this consumer, and refused to 
        stop even after the consumer's many pleas.
---------------------------------------------------------------------------
    \23\ 629 Fed. Appx. 369 (3d Cir. 2015).

   Osorio v. State Farm Bank\24\--327 robocalls to the 
        consumer's cell phone in 6 months, all seeking to collect on a 
        debt owed by someone else.
---------------------------------------------------------------------------
    \24\ 746 F.3d 1242 (11th Cir. 2014).

   Gager v. Dell Fin. Servs., L.L.C.,\25\--40 robocalls to the 
        consumer's cell phone in 3 weeks, even after she asked the 
        company to stop robocalling.
---------------------------------------------------------------------------
    \25\ 727 F.3d 265 (3d Cir. 2013).

   King v. Time Warner Cable,\26\--An automated system for debt 
        collection calls involving zero human intervention or review 
        resulted in 153 robocalls to a woman who had never been a 
        customer. The calls continued even after she informed Time 
        Warner of its error and asked it to stop calling, including 74 
        additional robocalls after she filed suit.
---------------------------------------------------------------------------
    \26\ 113 F. Supp. 3d 718 (S.D.N.Y. 2015), appeal filed, No. 15-2474 
(2d Cir. Aug. 6, 2015).

   Moore v. Dish Network L.L.C,\27\--31 robocalls in 7 months 
        to the cell phone of a low-income consumer using a Lifeline 
        support phone, even after he repeatedly told the company it had 
        the wrong number and to stop calling.
---------------------------------------------------------------------------
    \27\ 57 F. Supp. 3d 639 (N.D. W. Va. 2014).

   Munro v. King Broadcasting Co.\28\--Hundreds of text 
        messages despite the consumer's dozens of requests for the 
        company to stop.
---------------------------------------------------------------------------
    \28\ 2013 WL 6185233 (W.D. Wash. Nov. 26, 2013).

   Beal v. Wyndham Vacation Resorts, Inc.\29\--Dozens of 
        robocalls to the consumer's cell phone, which continued even 
        after her repeated requests to stop calling.
---------------------------------------------------------------------------
    \29\ 956 F. Supp. 2d 962 (W.D. Wis. 2013).

    In these cases, and in a number of filings before the FCC, the 
defendants argued that the technology used to make the multiple calls 
did not fit the definition of an autodialer under the statute (see 
Dominguez;\30\ King;\31\ Moore \32\); that the statutory term ``called 
party'' should be construed to allow calls to a number given by, and 
formerly assigned to, a different person (the ``intended party'') (see 
Osorio,\33\ King,\34\ Moore \35\); and that the consumer could not 
revoke consent (see Osorio;\36\ Gager;\37\ King;\38\ Beal;\39\ Munro 
\40\). If the FCC's position had not been sustained in those cases, or 
if it had been changed by statute, nothing would prevent callers like 
these from continuing the unwanted calls.
---------------------------------------------------------------------------
    \30\ 629 Fed. Appx. at 371.
    \31\ 113 F. Supp. 3d at 722, 725.
    \32\ 57 F. Supp. 3d at 652-55.
    \33\ 746 F.3d at 1252.
    \34\ 113 F. Supp. 3d 718 at 722, 725.
    \35\ 57 F. Supp. 3d at 648-49.
    \36\ 746 F.3d at 1255-56.
    \37\ 727 F.3d at 272.
    \38\ 113 F. Supp. 3d 718 at 726.
    \39\ 956 F. Supp. 2d at 977.
    \40\ 2013 WL 6185233, at *3-4.
---------------------------------------------------------------------------
    In all of these cases, a business entity set loose an automated 
system that called a consumer's cell phone multiple times, even after 
the consumer's repeated attempts to stop the calls. In each case, the 
caller had simply decided that it was more cost-effective to ignore the 
clearly expressed wishes of these consumers and continue to make these 
automated calls and texts.
    It is evident that consumers need more protection from such abuses, 
not less. The sheer number of calls a single caller with an autodialer 
can generate is staggering. The figures exemplify why robust 
interpretation and continued enforcement of the TCPA is critical, 
particularly given the increase in cell phone use and advances in 
technology.
    The calling industry, including all those represented here today, 
make extravagant claims about spurious lawsuits, wrongful class 
actions, and nefarious attorneys churning new claims relating to TCPA 
litigation--all to support their insistence that the TCPA must be 
changed, and their arguments that the FCC's 2015 Order is substantively 
improper. For example, some groups point to websites that track 
incoming unlawful calls to support their claim that much of TCPA 
litigation is a sham. Yet these businesses, like Privacy Star, track 
calls only after callers choose to make them. Further, the judicial 
system has robust mechanisms to protect against meritless cases. And 
even if there were some meritless cases that still made it through the 
judicial system, this would certainly not justify allowing innocent 
consumers to fall victim to a barrage of unwanted robocalls. Congress 
should not let this fictional specter of spurious litigation distract 
it from the harmful effects on consumers of the millions of unwanted 
calls.
    Congress deliberately created statutory penalties in the TCPA to 
ensure compliance. Any allegedly harsh consequence of repeated 
violations is precisely the deterrent intended and needed to instigate 
corrective action and industry-wide compliance. Only businesses that 
make robocalls without consent and without up-to-date dialing lists 
risk liability from TCPA lawsuits.
    Despite the facts that robocalls consistently top the list of 
consumer complaints \41\ and that 3.5 million complaints about unwanted 
calls were made to the FTC in 2015,\42\ there were only 3,710 TCPA 
lawsuits filed in 2015.\43\
---------------------------------------------------------------------------
    \41\ See 2015 TCPA Declaratory Ruling and Order  1.
    \42\ Federal Trade Commission, National Do Not Call Registry Data 
Book, FY 2015, at 4 (2015).
    \43\ See WebRecon, Out Like a Lion . . . Debt Collection Litigation 
& CFPB Complaint Statistics, Dec 2015 & Year in Review, available at: 
http://webrecon.com/out-like-a-lion-debt-collection-litigation-cfpb-
complaint-statistics-dec-2015-year-in-review/#sthash.m8WYbAKa.dpuf.
---------------------------------------------------------------------------
    This means that for every 1,000 complaints to the FTC, only one 
lawsuit is filed. Most consumers who receive robocalls do not take the 
time to complain to a Federal agency, and even a tinier percentage (one 
tenth of 1 percent) actually files a lawsuit. Most contact the caller 
or give up. Only those who are very frustrated will seek redress with 
state or Federal agencies. For example, the consumer in the Dominguez 
case, who received nearly 28,000 text messages from Yahoo, repeatedly 
asked Yahoo to stop, without success. The consumer then turned to the 
FCC, which also asked Yahoo to stop. Yahoo refused, stating that it did 
not believe, based on its narrow view of what constitutes an autodialer 
under the TCPA, that it was regulated by the FCC. Only then did the 
consumer file suit.\44\ If the industry callers represented here today 
achieve their goal of weakening the law, the number of unwanted calls 
and texts will skyrocket.
---------------------------------------------------------------------------
    \44\ 629 Fed. Appx. at 371.
---------------------------------------------------------------------------
    The TCPA does not provide for an attorney fee award even when the 
consumer prevails, and the statutory damages recovery is limited to 
$500 per impermissible call. (The court has discretion to treble this 
amount if it finds that the defendant acted willfully or 
knowingly.\45\) This means that only cases involving a high volume of 
illegal calls will provide the possibility of a recovery that is even 
sufficient to cover the attorney's time to investigate, file and 
litigate the case. Thus the very structure of the TCPA weeds out cases 
that involve only a low volume of isolated, unwanted calls.
---------------------------------------------------------------------------
    \45\ 47 U.S.C. Sec. 227(b)(3)(C).
---------------------------------------------------------------------------
    Moreover, the alarmist criticisms of class actions are simply a red 
herring. A few problematic class actions do not diminish the necessity 
of fostering effective enforcement of the significant substantive 
protections provided by the TCPA. The vast majority of TCPA claims are 
brought as individual actions, but having the ability to pursue TCPA 
claims as a class action furthers the statute's fundamental purpose. 
Class settlements bring real relief to the public, as many defendants 
then stop making the offending calls or they implement safeguards. 
Also, because the TCPA has no attorney fee provision, class actions 
often present the only practical means of litigating a claim.\46\
---------------------------------------------------------------------------
    \46\ ``It may be that without class certification, not all of the 
potential plaintiffs would bring their cases. But that is true of any 
procedural vehicle; without a lower filing fee, a conveniently located 
courthouse, easy-to-use Federal procedural rules, or many other 
features of the Federal courts, many plaintiffs would not sue.'' Shady 
Grove Orthopedic Associates, P.A., v. Allstate Insurance Co., 559 U.S. 
393, 435 n.18 (2010).
---------------------------------------------------------------------------
2. The FCC's 2015 Omnibus Order on the TCPA was correct.
    The callers have pressed the FCC to change three critical 
definitions within the TCPA:

  (a)  They seek a narrow definition of ``autodialer'' or ``ATDS'' 
        under the TCPA--which would have the effect of eliminating any 
        statutory or government oversight over automated calls, whether 
        for informational, telemarketing, debt collection, or other 
        purposes.

  (b)  They seek a definition of the term ``called party'' to mean the 
        ``intended recipient'' of the call--which would remove any 
        incentives for callers to maintain timely records of consent, 
        and eliminate the legal basis for consumers to ask that wrong 
        number calls cease.

  (c)  They seek a ruling that once a consumer has provided consent to 
        receive robocalls, such consent can never be revoked, 
        regardless of the number of unwanted automated calls and texts 
        the consumer receives.

    Not only are these arguments incorrect as a matter of law, but the 
granting of any one of them would unleash a tsunami of unwanted calls 
upon owners of cell phones in the United States. The FCC was quite 
correct, both legally and as a policy matter, to deny each of these 
requests by the industry.
    Autodialer definition. The calling industry's argument that the 
FCC's longstanding definition of autodialer is wrong is based on the 
notion that the current definition covers too many instruments, 
supposedly making the distinction meaningless. The implication is that 
because so many people have smart phones, each of which could be 
considered an autodialer, all of those people could be sued under the 
TCPA--a danger the industry would prevent by changing the definition of 
autodialer to exclude all of the technology that is actually being used 
by commercial entities to call consumers.
    Called party. The calling industry argues that ``called party'' 
must mean the person the caller intended to call, rather the person the 
caller actually reached at the dialed number. The industry proposes a 
tortured analysis of the TCPA's plain language that would lead to 
disastrous results for consumers. Adopting the industry's absurd 
interpretation not only runs afoul of the TCPA's plain reading, but it 
would also leave innocent consumers who receive uninvited, wrong number 
robocalls without recourse. For example, in one reported case, Nelnet 
called one consumer over 185 times, contending that it had consent 
because the intended recipient was the person it was trying to call, 
namely the real debtor.\47\
---------------------------------------------------------------------------
    \47\ Cooper v. Nelnet, 6:14-cv-00314-GKS-DAB (M.D. Fla.).
---------------------------------------------------------------------------
    If the position advanced by industry were to become the rule, 
Nelnet would have no liability no matter how many times it called the 
wrong person. Nelnet's defense would be that because it intended to 
call one party 185 times, and it had consent from that party, that 
would be sufficient. It would not matter that it actually reached 
someone else 185 times. The person who answers and owns the phone is 
clearly the ``called party.'' It does not make sense to treat the 
``intended party'' as the ``called party,'' and leave the party 
actually called unprotected.
    In Osorio, the consumer received 327 debt collection robocalls to 
her cell phone for a debt owed by someone else.\48\ In Dominguez, Yahoo 
sent 27,809 texts, and maintained that it did not have to stop because 
it had consent from a prior subscriber.\49\ In Allen v. JPMorgan Chase, 
N.A., a noncustomer of Chase Auto Finance received over 80 prerecorded 
calls to her cell phone relating to the debt of someone else. When she 
answered the calls, an automated voice instructed her to call Chase 
Auto Finance to discuss ``her'' account, or to visit www.chase.com. 
When she called, Chase initially refused to take action because she was 
not a customer. Only after numerous complaints and litigation did the 
calls cease.\50\
---------------------------------------------------------------------------
    \48\ 746 F.3d at 1246.
    \49\ 629 Fed. Appx. at 371.
    \50\ Case No. 13-cv-08285 (N.D. Ill.).
---------------------------------------------------------------------------
    The FCC did not make new law in its 2015 ruling. It simply 
reiterated the holdings of the vast majority of courts that ``called 
party'' is indeed the person actually called and not some other 
intended recipient.\51\
---------------------------------------------------------------------------
    \51\ See Osorio, 746 F.3d at 1250-52 (rejecting argument that 
``intended recipient'' is the ``called party''). See also Soppet v. 
Enhanced Recovery Co., 679 F. 3d 637, 640-41 (3d Cir. 2013); Paradise 
v. Commonwealth Fin. Sys., Inc., No. 3:13-cv-00001, 2014 WL 4717966, at 
*3 (M.D. Pa. Sept. 22, 2014) (``called party'' does not mean intended 
recipient); Fini v. DISH Network L.L.C., 955 F. Supp. 2d 1288, 1296 
(M.D. Fla 2013) (``possessing standing as a `called party' . . . does 
not require the plaintiff to have been the intended recipient''); Manno 
v. Healthcare Revenue Recovery Group, L.L.C., 289 F.R.D. 674, 682 (S.D. 
Fla. 2013); Breslow v. Wells Fargo Bank, N.A., 857 F. Supp. 2d 1316, 
1322 (S.D. Fla. 2012) (``called party'' refers to the actual, not the 
intended, recipient).
---------------------------------------------------------------------------
    The reassigned numbers issue is a red herring. In its 2015 Omnibus 
Order, the FCC allowed callers only one call to determine whether a 
cell phone number had been reassigned to a new consumer.\52\ It did 
this because if there were not a strict limit on these calls, callers 
would have no incentive to ensure that they are calling the person who 
provided consent to be called.
---------------------------------------------------------------------------
    \52\ See 2015 TCPA Declaratory Ruling and Order at 8006-10,  85-
92.
---------------------------------------------------------------------------
    Wrong number calls generally are not a matter of one or even two 
calls, but usually result in many calls. Here are just a few examples 
involving a huge number of wrong number calls:

   Singh v. Titan Fitness Holdings, L.L.C. d/b/a Fitness 
        Connection: 200 calls.\53\
---------------------------------------------------------------------------
    \53\ Case No. 4:14-cv-03141 (S.D. Tex).

   Percora v. Santander: 50 calls \54\
---------------------------------------------------------------------------
    \54\ Case No. 5:14-cv-04751-PSG (N.D. Cal.)

   Scott v. Reliant Energy Retail Holdings, L.L.C.: at least 
        100 calls.\55\
---------------------------------------------------------------------------
    \55\ Case No. 4:2015-cv-00282 (S.D. Tex).

    It does not matter if the industry does not benefit from wrong 
number calls--the industry must be incentivized to stop the wrong 
number calls. The TCPA places the burden of proving consent on the 
caller. This burden should remain on the caller to ensure that the 
consent remains valid. The experience reflected in the cases shows 
that, without proper incentives to stop making wrong-number calls, the 
industry will simply keep calling. (But actually, the industry does 
benefit from the wrong number calls by shifting the cost of ensuring 
that the right party is called from the caller to the called party.)
    The FCC's Order on reassigned numbers is reasonable, and allows 
industry groups one ``free'' call before liability attaches. After all, 
the businesses placing the calls are in the best position to ensure 
ongoing consent. Industry groups that insist on placing robocalls to 
consumers can seek technologies with a higher accuracy rate than those 
on the market (which currently have between 85 to 99 percent accuracy 
in identifying cellular numbers).\56\ They can combine existing 
technologies with other strategies to prevent wrong number calls, such 
as making a manual call first, or developing a method to confirm that 
the called party is in fact the intended recipient. The discussion in 
section 6 of this Testimony provides more detail about methodologies 
that can be used to avoid wrong number calls.
---------------------------------------------------------------------------
    \56\ Michael P. Battaglia, Meg Ryan, Marcie Cynamon, Purging Out-
Of-Scope And Cellular Telephone Numbers From RDD Samples, in 
Proceedings of the AAPOR-ASA Section on Survey Research Methods 3798 
(2005).
---------------------------------------------------------------------------
    Keeping the onus on the caller is appropriate. It is analogous to 
what transpired in the financial sector after the Fair Credit Billing 
Act was passed.\57\ Placing the burden of managing consumer fraud in 
credit card transactions upon banks provided them with the incentive to 
create systems that limit and avoid fraud. The rationale is the same 
here.
---------------------------------------------------------------------------
    \57\ 15 U.S.C. Sec. Sec. 1601 et seq.
---------------------------------------------------------------------------
    Many callers communicate regularly with the persons they intend to 
call (i.e., their own customers). Who better than the callers to ensure 
that they have ongoing consent? These callers have processes in place 
to maintain current customers' contact information; they can also 
establish consent to call cell phones. Businesses can implement 
features in their customer communications to confirm ongoing consent 
(i.e., via their websites, at their storefronts, via telephone). If 
they are unable to confirm consent, the best practice would be to 
remove the consumer's name from their automated calling lists.
    Notably, most cell phone providers do not reassign numbers for at 
least 30 days.\58\ Autodialers are equipped to record ``triple-tone'' 
signals that identify a number that has been disconnected. A manual 
dialer will also hear a triple-tone. Once the caller knows that the 
number has been disconnected, it also knows that the number is on track 
to be reassigned to a different person.\59\
---------------------------------------------------------------------------
    \58\ See Numbering Resource Optimization, CC Docket No. 99-200, 
Report and Order, 15 FCC Rcd. 7574, 7590,  29 (2000).
    \59\ See 2015 TCPA Declaratory Ruling and Order at 38 n.303.
---------------------------------------------------------------------------
    And, of course, if a business wants an absolute guarantee against 
TCPA liability, it has the option of simply refraining from making 
robocalls; it can manually dial instead. Businesses do not have a 
``right'' to make robocalls. And their ability to do so must not 
undermine the privacy rights of consumers. The FCC's a safe harbor for 
liability for one call is an appropriate balance between assisting 
callers to determine whether a number has been reassigned and opening 
the floodgates to unwanted calls to consumers.
    ``Reasonable means of revoking consent'' includes only means that 
are reasonable. The calling industry also complains about the FCC's 
order requiring that callers honor consumers' use of ``reasonable 
means'' to revoke consent.\60\ But any ``reasonable'' means to revoke 
consent is appropriate and consistent with the plain reading of the 
TCPA. Industry arguments paint a myriad of far-fetched examples of ways 
consumers could attempt to revoke consent. Yet the FCC did not say 
consent could be revoked in any way, but rather any reasonable way.
---------------------------------------------------------------------------
    \60\ See 2015 TCPA Declaratory Ruling and Order  47.
---------------------------------------------------------------------------
    Industry objects to the use of reasonableness as a standard. But 
reasonableness is often used as a standard in statutes, court rules, 
and administrative agency rules and decisions. The ``Reasonable Man'' 
is an eminent personality in United States law. For example, the term 
``reasonable'' is used to define a standard in Rules 4, 5, 11, 12, 15, 
16, 17, 23, 26, 27, 30, 32, 33, 34, 36, 37, 43, 45, 50, 51, 53, 56, 60, 
65, and 68 of the Federal Rules of Civil Procedure.
    The Uniform Commercial Code--the basic law governing commercial 
transactions throughout the United States--imposes upon parties a duty 
of good faith, defined to include ``reasonable commercial standards of 
fair dealing.'' \61\ It provides that an offer shall be construed as 
inviting acceptance ``by any medium reasonable in the circumstances'' 
and is construed to remain open for a ``reasonable time.'' \62\ 
``Reasonably predictable'' fair market rent is part of the standard for 
distinguishing between a lease and a sale.\63\ When the parties have 
not agreed upon a time for an action to be taken, it is to be taken 
within a ``reasonable time.'' \64\ And this is just a partial list of 
the references to reasonableness as a standard in only the first of the 
U.C.C.'s eleven Articles. The industry's objection to a reasonableness 
standard is alarming, and indicative that--absent this requirement--
these industry groups would seek to impose unreasonable measures to 
restrict revocation of consent.
---------------------------------------------------------------------------
    \61\ U.C.C. Sec. Sec. 1-201, 1-304.
    \62\ U.C.C. Sec. 2-206.
    \63\ U.C.C. Sec. 1-203.
    \64\ U.C.C. Sec. 1-205.
---------------------------------------------------------------------------
    It is only when callers make it unduly cumbersome to revoke consent 
that they are likely to receive varying manners of revocation, which 
may or may not ultimately be deemed reasonable. For example, if the 
caller does not provide a mechanism to opt out when making a robocall 
(and many do not), the consumer might go to the brick and mortar 
storefront and ask a representative to remove his name from the calling 
list.
    Reasonable methods of revocation should include an easy-to-use opt-
out mechanism provided within the call or text. Other methods may 
include going to the caller's website, or calling the company's 
customer service line. It stands to reason that consumers would be 
likely to use these methods. However, no specific method should be 
mandatory because not every method fits every scenario.
    Instead of requiring consumers to discern how to revoke consent for 
a particular business (i.e., XYZ Co. requires completion of a form), 
the onus must be on the caller. If a business wants to robocall 
consumers, it should train its employees how to handle a consumer's 
wish to opt out of robocalls, and not shift its burden to consumers.
    Allowing the industry to limit mechanisms for revocation is 
contrary to the TCPA's broad construction, and also disregards the 
myriad of ways in which businesses may be organized (i.e., not all have 
a website or customer service line). Allowing any reasonable manner of 
revocation that conveys a message to the caller that the recipient does 
not wish to receive future communications is appropriate.
    Some industry groups have suggested that the terms for revocation 
should be limited to the terms set out in the underlying contracts. 
However, not all communications are subject to a contractual 
relationship between the parties (e.g., wrong number calls), so even 
the most consumer-protective contract would not be a one-size-fits-all 
solution. More important, leaving the matter to contract opens the door 
to unequal bargaining positions in contractual drafting and obscure 
provisions in fine print, all leading to consumer confusion about how 
to revoke consent. Better to keep the FCC's approach: that revocation 
must simply be reasonable.
3. The importance of passing the HANGUP Act.
    Unfortunately, a provision seriously undermining the important 
protections of the TCPA was jammed through Congress as part of the 
Bipartisan Budget Act of 2015. Section 301 of this Act creates an 
exemption to the TCPA that permits robocalls and texts by debt 
collectors of Federal debt--primarily student loan borrowers who are 
delinquent on Federal student loan payments, as well as taxpayers 
pursued by private collectors--to be made to cellphones without the 
consent of the consumer. This is a dangerous precedent that will harm 
tens of millions of Americans, and it should be repealed. Senate Bill 
2235, the HANGUP (Help Americans Never Get Unwanted Phone calls) Act, 
repeals the enactment of Section 301 in the budget bill. We strongly 
support the HANGUP Act.
    Our best estimate of the total number of people who could be 
negatively impacted by Section 301 is over 61 million people. This 
includes:

   Federal Student Loans. The total number of unduplicated 
        recipients of Federal student loans (including Direct loans, 
        Federal Family Education loans, and Perkins loans) was 41.8 
        million as of Q1 2016.\65\
---------------------------------------------------------------------------
    \65\ U.S. Dept of Education, Federal Student Aid Portfolio Summary 
(May 2016), available at https://studentaid.ed.gov/sa/about/data-
center/student/portfolio.

   Federally Guaranteed Mortgages. As of September 2015, there 
        were a total of 4,934,260 mortgages with an explicit guaranty 
        from the U.S. Government, including the Federal Housing 
        Administration, the U.S. Department of Veterans Affairs, and 
        certain other departments to a lesser extent. This number 
        includes both current and performing mortgages (4.4 million) as 
        well as delinquent mortgages (474,000).\66\
---------------------------------------------------------------------------
    \66\ ``Office of the Comptroller of the Currency, OCC Mortgage 
Metrics Report, Third Quarter 2015 (Feb. 2016), available at http://
www.occ.treas.gov/publications/publications-by-type/other-publications-
reports/mortgage-metrics/mortgage-metrics-q3-2015.pdf.

   Small Business Loans. The Small Business Administration 
        (SBA) offers several kinds of guaranteed loan programs, as well 
        as direct business loans and disaster loans. For Fiscal Year 
        2015, the SBA approved over 80 thousand loans.\67\
---------------------------------------------------------------------------
    \67\ ``U.S. Small Business Administration, Number of Approved Loans 
by Program (Feb. 2016), available at https://www.sba.gov/sites/default/
files/WDS_Table3_ApprovalCount_Report
.pdf.

   Agriculture Loans. The U.S. Department of Agriculture (USDA) 
        offers various kinds of loan programs, including direct and 
        guaranteed loans for single/multi-family housing, community 
        facilities, and business programs. The USDA's Rural Development 
        loan programs serve 306,552 borrowers through direct programs 
        and 942,367 borrowers through guaranteed programs, as of Fiscal 
        Year 2015.\68\
---------------------------------------------------------------------------
    \68\ ``U.S. Dep't of Agriculture, Office of Inspector General, 
Rural Development's Financial Statements for Fiscal Years 2015 and 2014 
at 23, available at http://www.usda.gov/oig/webdocs/85401-0005-11.pdf.

   IRS Taxpayer Delinquent Accounts. Since 2004, the number of 
        taxpayer delinquent accounts subject to collection activities 
        has grown each year.\69\ As of September 30, 2015, a total of 
        13.3 million taxpayer accounts were subject to IRS delinquent 
        collection activities.\70\ These accounts are now subject to 
        robocalling by private debt collectors.\71\
---------------------------------------------------------------------------
    \69\ Internal Revenue Service Data Book, SOI Tax Stats--Delinquent 
Collection Activities, Table 16 (2015), available at https://
www.irs.gov/uac/SOI-Tax-Stats-Delinquent-Collection-Activities-IRS-
Data-Book-Table-16.
    \70\ Internal Revenue Service Data Book 43 (2015), available at 
https://www.irs.gov/pub/irs-soi/15databk.pdf.
    \71\ See 26 U.S.C. Sec. 6306 (amended by Pub. L. No. 114-94, 129 
Stat. 1312 (Dec. 4, 2015)).

    Student loan collectors' and servicers' repeated debt collection 
violations. Student loan collectors and servicers have frequently 
violated the laws and regulations designed to protect consumers from 
overreaching, abuse and harassment. For example, consider the student 
loan servicer Navient's recent settlements with the FDIC and the 
Department of Justice. On May 13, 2014, Navient reached an agreement 
with the Department of Justice requiring it to pay $60 million to 
compensate student loan debtors for interest overcharges that violated 
the Servicemembers Civil Relief Act (SCRA).\72\ On the same day, the 
FDIC announced a separate $96.6 million settlement with Navient for 
manipulating the allocation of students' payments in order to maximize 
late fees, misrepresenting and inadequately disclosing how borrowers 
could avoid late fees, and violating SCRA requirements.\73\
---------------------------------------------------------------------------
    \72\ See Press Release, Justice Department Reaches $60 Million 
Settlement with Sallie Mae to Resolve Allegations of Charging Military 
Servicemembers Excessive Rates on Student Loans (May 13, 2014), 
available at http://www.justice.gov/opa/pr/justice-department-reaches-
60-million-settlement-sallie-mae-resolve-allegations-charging.
    \73\ See Press Release, FDIC Announces Settlement with Sallie Mae 
for Unfair and Deceptive Practices and Violations of the Servicemembers 
Civil Relief Act (May 13, 2014), available at https://www.fdic.gov/
news/news/press/2014/pr14033.html. While this matter involved private 
student loans, rather than the Federal student loans for which section 
301 provides a carve-out, the behavior of student loan servicers is 
relevant to the discussion.
---------------------------------------------------------------------------
    Moreover, in 2014 testimony to Congress about problems with student 
loans, the Consumer Financial Protection Bureau's Student Loan 
Ombudsman stated:

        Loan servicers are the primary point of contact on student 
        loans for more than 40 million Americans. . . . .

        As the recession decimated the job market for young graduates, 
        a growing share of student loan borrowers reached out to their 
        servicers for help. But the problems they have encountered bear 
        an uncanny resemblance to the problems faced by struggling 
        homeowners when dealing with their mortgage servicers. Like 
        many of the improper and unnecessary foreclosures experienced 
        by many homeowners, I am concerned that inadequate servicing 
        has contributed to America's growing student loan default 
        problem, now topping 7 million Americans in default on over 
        $100 billion in balances.

        The Bureau has received thousands of complaints from borrowers 
        describing the difficulties they face with their student loan 
        servicers. Borrowers have told the Bureau about a range of 
        problems, from payment processing errors to servicing transfer 
        surprises to loan modification challenges. To ensure that we do 
        not see a repeat of the breakdowns and chaos in the mortgage 
        servicing market, it will be critical to ensure that student 
        loan servicers are providing adequate customer service and 
        following the law.\74\
---------------------------------------------------------------------------
    \74\ Hearing on the Impact of Student Loan Debt on Borrowers and 
the Economy Before the United States Senate Comm. on the Budget, 113th 
Cong., 2d Sess. (June 4, 2014) (testimony of Rohit Chopra, Assistant 
Director & Student Loan Ombudsman, Consumer Financial Protection 
Bureau) (emphasis added).

    Student loan collectors and servicers have also frequently been 
subject to private suits for TCPA violations. For example, Nelnet was a 
defendant in a recent TCPA action, Cooper v. Nelnet, because it 
contacted third parties' cell phones with pre-recorded messages. Mr. 
Cooper does not have a student loan serviced by Nelnet. Yet, he 
received the following pre-recorded call several times on his cell 
---------------------------------------------------------------------------
phone in addition to texts and other calls:

        Hello, this is an important message for Leonor Vargas from 
        Nelnet, calling on behalf of the U.S. Department of Education. 
        We do not have a current address, phone number, or e-mail on 
        file for Leonor Vargas. Without current contact information, we 
        are unable to provide important information about their student 
        account. Please contact Nelnet 24/7 at 888-486-4722 or visit us 
        at www.nelnet.com. This matter requires your immediate 
        attention. Thank you.

    Similarly, Sallie Mae was the defendant in Cummings v. Sallie Mae, 
12-cv-09984 (N.D. Ill.), a case involving allegations that Sallie Mae 
called people who were references for the students' loans with pre-
recorded debt collection messages. Sallie Mae had no relationship with 
these references in regards to the accounts that were the subject of 
the calls.
    These examples demonstrate that student loan servicers and 
collectors are autodialing and delivering artificial voice messages to 
cell phones in violation of the TCPA, as well as violating other 
critically important consumer protections. Until the servicers and 
collectors begin complying with the rules and regulations to which they 
are currently subject, it is a mistake to create special exemptions 
from consumer protection law for their benefit. The situation calls for 
stronger enforcement, not weaker protections.
    Financially distressed consumers. Studies have shown--and 
executives in the credit industry have repeatedly admitted--that the 
major causes of serious consumer delinquency are unemployment, illness, 
and marital problems. Moreover, the credit industry's overextension of 
credit, particularly high-cost credit, greatly inhibits debtors' 
ability to repay.
    When Congress wrote the Federal Fair Debt Collection Practices Act 
(FDCPA) it explicitly recognized that most delinquency is not 
intentional. Just the opposite is the case. Most overdue debts are not 
the fault of the consumer:

        One of the most frequent fallacies concerning debt collection 
        legislation is the contention that the primary beneficiaries 
        are ``deadbeats.'' In fact, however, there is universal 
        agreement among scholars, law enforcement officials, and even 
        debt collectors that the number of persons who willfully refuse 
        to pay just debts is minuscule. Prof. David Caplovitz, the 
        foremost authority on debtors in default, testified that after 
        years of research he has found that only 4 percent of all 
        defaulting debtors fit the description of ``deadbeat.'' This 
        conclusion is supported by the National Commission on Consumer 
        Finance which found that creditors list the willful refusal to 
        pay as an extremely infrequent reason for default.

        The Commission's findings are echoed in all major studies: the 
        vast majority of consumers who obtain credit fully intend to 
        repay their debts. When default occurs, it is nearly always due 
        to an unforeseen event such as unemployment, overextension, 
        serious illness, or marital difficulties or divorce.\75\
---------------------------------------------------------------------------
    \75\ S. Rep. No. 95-382, 95th Cong., 1st Sess., reprinted in 1977 
U.S. Code Cong. & Admin. News. (Aug. 2, 1977) (emphasis added).

    The FDCPA, along with other laws protecting debtors from abuse and 
harassment, is based on this recognition, rather than on the myth that 
draconian collection tactics are justified by the existence of 
substantial numbers of debtors who sought out credit without the 
intention or wherewithal to repay.\76\
---------------------------------------------------------------------------
    \76\ David Caplovitz, Consumers in Trouble: A Study of Debtors in 
Default ch. 11 (1974). See also Teresa A. Sullivan, Elizabeth Warren, 
and Jay Lawrence Westbrook, As We Forgive Our Debtors: Bankruptcy and 
Consumer Credit in America (1989).
---------------------------------------------------------------------------
    There are clear, objective, widely recognized causes of delinquency 
and default on consumer debt. Unemployment is widely recognized as the 
leading cause of the failure to pay credit card debt.\77\ Excessive 
medical debt is also widely seen as cause for the non-payment of other 
bills.\78\
---------------------------------------------------------------------------
    \77\ Sumit Agarwal and Chunlin Liu, Determinants of Credit Card 
Delinquency and Bankruptcy: Macroeconomic Factors, 27 Journal of 
Economics and Finance 1 (2003).
    \78\ See e.g. Theresa Tamkins, ``Medical Bills Prompt More than 60 
percent of Bankruptcies,'' CNN Original Series, June 5, 2009.
---------------------------------------------------------------------------
    The impact of the FCC's proposed rule on borrowers with Federal 
debt from for-profit colleges. There are numerous for-profit colleges 
that have been repeatedly investigated or sued for fraudulent 
activities that seriously harm consumers, especially low-income 
consumers. Just two examples are Corinthian \79\ and ITT.\80\ As the 
result of predatory practices, students who attend for-profits often do 
not benefit from the education paid for with the Federal student loans, 
and thus disproportionately default on their Federal student loans.
---------------------------------------------------------------------------
    \79\ See Anya Kamenetz, Corinthian Colleges Misled Students On Job 
Placement, Investigation Finds, Higher Ed, Nov. 17, 2015, available at 
http://www.npr.org/sections/ed/2015/11/17/456367152/corinthian-misled-
students-on-job-placement-investigation-finds. See also Annie Waldman, 
How a For-Profit College Targeted the Homeless and Kids With Low Self-
Esteem, ProPublica, Mar. 18, 2016 (newly released e-mails and 
PowerPoints show first-hand Corinthian Colleges' predatory practices), 
available at https://www.propublica.org/article/how-a-for-profit-
college-targeted-homeless-and-kids-with-low-self-esteem: Press Release, 
CFPB Sues For-Profit Corinthian Colleges for Predatory Lending Scheme 
(Sept. 16, 2014) (Bureau Seeks More than $500 Million In Relief For 
Borrowers of Corinthian's Private Student Loans), available at http://
www.consumerfinance.gov/about-us/newsroom/cfpb-sues-for-profit-
corinthian-colleges-for-predatory-lending-scheme/.
    \80\ Danielle Douglas-Gabriel, Is this the beginning of the end for 
ITT? Washington Post, Oct. 19, 2015 (CFPB accused the company of 
providing zero-interest loans to students but failing to tell them that 
they would be kicked out of school if they didn't repay in a year; when 
students could not pay up, ITT allegedly forced them to take out high-
interest loans to repay the first ones),available at https://
www.washingtonpost.com/news/grade-point/wp/2015/10/19/is-this-the-
beginning-of-the-end-for-itt/
---------------------------------------------------------------------------
    The vast majority of students at these for-profit colleges have 
Federal student loans. A 2012 report from the U.S. Senate's Health 
Employment Labor and Pension Committee that examined 30 publicly traded 
for-profit colleges, found that these institutions were up to 450 
percent more expensive than their public counterparts, and that 96 
percent of students who attend for-profit colleges borrow in order to 
do so.\81\ Further, students who attend for-profit colleges are far 
less likely to be able to repay their loans, leading to greater default 
and serious financial consequences for former students. Nationally, the 
for-profit college sector generates nearly half of all student loan 
defaults, while enrolling only about 13 percent of all students.\82\ 
These harmful practices most often impact vulnerable populations 
including low-income persons, people of color, and veterans, all of 
whom are overrepresented in enrollment at for-profit colleges. This is 
illustrated in an October 2014 Center for Responsible Lending:
---------------------------------------------------------------------------
    \81\ Staff of S. Comm on Health, Education, Labor, and Pension, 
112th Cong., For Profit Higher Education: The Failure to Safeguard the 
Federal Investment and Ensure Student Success (2012), available at 
http://www.help.senate.gov/imo/media/for_profit_report/Contents.pdf.
    \82\ Peter Smith & Leslie Parrish, Do Students of Color Profit from 
For-Profit College? Poor Outcomes and High Debt Hamper Attendees' 
Future, Center for Responsible Lending (Oct. 2014), available at http:/
/www.responsiblelending.org/sites/default/files/nodes/files/research-
publication/crl-for-profit-univ-final.pdf.

        We find that students who attend for-profit colleges are more 
        likely to need to borrow for their education and tend to borrow 
        more than their peers at public or private, non-profit schools. 
        Unfortunately, this financial investment does not appear to pay 
        off for many for-profit students, who graduate at lower rates, 
        are more likely to default on their loans, and may face poor 
        employment outcomes. African Americans and Latinos are at 
        greater risk of the high debt burdens and poor outcomes caused 
        by for-profit colleges because they are more likely to attend 
---------------------------------------------------------------------------
        these schools than their white peers.

        [A]id received by recent veterans as part of the new Post-9/11 
        GI bill does not count towards the 90 percent limitation on 
        Federal aid [that for-profits receive]. As a result, for-profit 
        colleges target their recruitment efforts toward current and 
        former members of the military, whose additional grant aid can 
        be counted towards the 10 percent of funds that are intended to 
        come from private sources.\83\
---------------------------------------------------------------------------
    \83\ Id.

    Vulnerable populations with delinquent Federal student loans from 
potentially fraudulent for-profit schools should not be further 
harassed by robocalls to their cell phones.
    Abusive debt collection calls. Collectors are not generally dealing 
with people who are choosing not to pay something they can pay. Rather, 
they are dealing with people who are already struggling to pay their 
debts, for whom choosing to pay one debt will often mean that other 
debts or necessities will go unmet. This is supported by estimates 
indicating that the new loophole for debt collection robocalls will not 
generate significant revenue for the Federal Government. As pointed out 
by Consumerist, the Congressional Budget Office projects that debt 
collection robocalls will raise, at most, $500,000 per year over the 
next ten years.\84\ This is why both debt collection regulation and 
cell phone regulation should not permit abuse, harassment or unfair or 
deceptive practices.
---------------------------------------------------------------------------
    \84\ Chris Morran, Government's Own Budget Analysis Shows that 
Allowing Debt Collection Robocalls is Pointless, Consumerist, Oct. 28, 
2015, available at https://consumerist.com/2015/10/28/governments-own-
budget-analysis-shows-that-allowing-debt-collection-robocalls-is-
pointless/.
---------------------------------------------------------------------------
    Causing one's cell phone to ring repeatedly is even more abusive 
for consumers than causing one's home phone to ring. Debt collection 
often begins with a series of form letters and then graduates to phone 
calls from collection employees. The industry's technological 
capabilities, along with the perverse incentives it provides its 
employees, often ensure that these calls are frequent and often 
abusive. In particular, the collection employee is often eligible for 
salary incentives based on the amount he or she collects. Collectors 
use automated dialing systems that will place a million calls per day.
    As is indicated by the numerous cases filed in the courts about 
multiple calls as a collection tactic, people find it enormously 
stressful to receive multiple collection calls every day.\85\ The calls 
are highly intrusive. They cause great distress and trigger 
difficulties in marriages. Numerous collection calls interfere with 
daily life. The calls themselves, the dread of future calls, and the 
fear of the dissemination of personal, embarrassing information to 
friends, neighbors, co-workers and employers permeate the lives of 
consumers. Indeed, in some cases, aggressive collection efforts have 
caused such significant emotional distress as to cause physical 
illness.\86\
---------------------------------------------------------------------------
    \85\ See, e.g., CashCall, Inc. v. Morrisey, 2014 WL 2404300 (W. Va. 
May 30, 2014) (84,371 calls to 292 consumers) (unpublished); Meadows v. 
Franklin Collection Serv., Inc., 414 Fed. Appx. 230 (11th Cir. 2011) 
(200-300 calls); Rucker v. Nationwide Credit, Inc., 2011 WL 25300 (E.D. 
Cal. Jan. 5, 2011) (approximately 80 phone calls in one year); Krapf v. 
Nationwide Credit, Inc., 2010 WL 2025323 (C.D. Cal. May 21, 2010) (four 
to eight calls daily for two months); Turman v. Central Billing Bureau, 
Inc., 568 P.2d 1382 (Or. 1977) (at least four calls over nine days).
    \86\ See, e.g., Margita v. Diamond Mortgage Corp., 406 N.W.2d 268 
(Mich. Ct. App. 1987) (stress from telephone collection efforts 
including phone calls aggravated paroxysmal atrial tachycardia); Turman 
v. Central Billing Bureau, Inc., 568 P.2d 1382 (Or. 1977) (affirming 
tort verdict; blind consumer rehospitalized with anxiety and glaucoma 
complications after repeated collection calls); GreenPoint Credit Corp. 
v. Perez, 75 S.W.3d 40 (Tex. App. 2002) (affirming jury verdict of $5 
million in compensatory damages against debt collector; elderly 
consumer suffered severe shingles-related sores, anxiety, nausea, and 
elevated blood pressure due to repeated telephone and in-person 
harassment over a debt she did not owe).
---------------------------------------------------------------------------
    Complaints about debt collection--wrong people called routinely. 
The Consumer Financial Protection Bureau's Annual Report for 2015 shows 
that 40 percent of debt collection complaints involved continued 
attempts to collect debts not owed, which include complaints that the 
debt does not belong to the person called.\87\ Almost one fifth of all 
the complaints related to debt collector communication tactics.\88\
---------------------------------------------------------------------------
    \87\ Consumer Financial Protection Bureau, Consumer Response Annual 
Report 16 (January 1-December 31, 2015) available at http://
files.consumerfinance.gov/f/201604_cfpb_consumer-response-annual-
report-2015.pdf.
    \88\ Id.
---------------------------------------------------------------------------
    Similarly, a 2009 survey conducted by the Scripps Survey Research 
Center at Ohio University shows that 30 percent of respondents were 
being called regarding debt that was not their debt.\89\ And according 
to statistics from the Federal Reserve, one in seven people in the 
United States is being pursued by a debt collector, a substantial 
percentage of whom report being hounded for debts they do not owe.\90\
---------------------------------------------------------------------------
    \89\ Marcia Frellick, Survey: Debt collection calls growing more 
frequent, aggressive, Creditcard.com, Jan. 28, 2010, available at 
http://www.creditcards.com/credit-card-news/debt-collectors-become-
more-aggressive-break-law-1276.php.
    \90\ David Dayen, Someone Else's Debt Could Ruin Your Credit 
Rating, New Republic, Mar. 31, 2014, available at http://
www.newrepublic.com/article/117213/debt-collector-malpractice-someone-
elses-debt-could-ruin-your-credit.
---------------------------------------------------------------------------
    Senate Bill 2235, the HANGUP Act, repeals the enactment of Section 
301 in the budget bill. The best protection against unwanted robocalls 
is to require the consent of the called party, as the TCPA does for all 
other non-emergency robocalls and texts made to cell phones.
    We urge you to pass S. 2235 as soon as possible.
4. Federal law should be strengthened to deal with abusive robocalling 
        to consumers.
    As is evident from the growing number of complaints about 
robocalls, as well as the growing litigation, American consumers are 
suffering from two problems related to robocalls. One is too many 
robocalls from legitimate companies. The other is the escalating number 
of robocalls from scammers. In the public's mind, these two issues are 
intertwined. And, until they are each independently dealt with, the 
complaints--both to government agencies and through the courts--will 
continue to escalate.
    The TCPA and the Do Not Call Registry provide some protection for 
consumers from unwanted robocalls from legitimate companies, but these 
mechanisms have completely failed to address the entire robocall 
problem. Major phone companies provide little effective protection from 
the calls sent by scammers and unscrupulous actors. These calls cost 
consumers an estimated $350 million in 2011.\91\ Many of these scam 
robocalls originate from overseas, outside of the reach of the law.\92\ 
The FTC has had difficulty in enforcing the restrictions against 
unwanted calls, collecting less than 12 percent of the $1.2 million it 
has charged to Do Not Call and robocall violators since it created the 
national registry.\93\
---------------------------------------------------------------------------
    \91\ Kevin B. Anderson, Federal Trade Commission, Staff Report of 
the Bureau of Economics, Consumer Fraud in the United States, 2011: The 
Third FTC Survey (April 2013), available at https://www.ftc.gov/sites/
default/files/documents/reports/consumer-fraud-united-states-2011-
third-ftcsurvey/130419fraudsurvey_0.pdf. The survey identified 
approximately 3.5 million telemarketing fraud cases in 2011 with a 
median loss per case of $100. Id. at 38 and 39.
    \92\ Ringing off the Hook: Examining the Proliferation of Unwanted 
Calls before the United States Senate Special Comm. on Aging, 114th 
Cong., 1st Sess. (2015) (testimony of the Federal Trade Commission), 
available at http://www.aging.senate.gov/imo/media/doc/FTC_Greisman
_6_10_15.pdf.
    \93\ Federal Trade Commission, FTC DNC and Robocall Enforcement, 
(Apr 19, 2016) (on file with the author).
---------------------------------------------------------------------------
    The confluence of two changes in the law in 2015 with the ongoing 
caller ID spoofing problems will tremendously exacerbate existing 
problems. Scammers posing as IRS collection agents have long been known 
as perpetrating one of the worst consumer scams. Now that private debt 
collectors can collect IRS debts,\94\ it will be especially difficult 
for consumers to determine the difference between real collectors for 
the IRS and scammers.\95\ This likely confusion is made worse by a new 
statutory provision authorizing the debt collectors of IRS debt to 
robodial consumers without consent. Calls from real collectors for the 
IRS will be permitted to robodial consumers--which directly conflicts 
with the explicit advice of the FTC ``that the IRS never calls 
consumers out of the blue.'' \96\
---------------------------------------------------------------------------
    \94\ See 26 U.S.C. Sec. 6306 (amended by Pub. L. No. 114-94, 129 
Stat. 1312 (Dec. 4, 2015)) (requiring the IRS to enter into tax 
collection contracts for all inactive tax receivables).
    \95\ Internal Revenue Service, Phone Scams Continue to be a Serious 
Threat, Remain on IRS ``Dirty Dozen'' List of Tax Scams for the 2016 
Filing Season (Feb. 2, 2016), available at https://www.irs.gov/uac/
Newsroom/Phone-Scams-Continue-to-be-a-Serious-Threat,-Remain-on-IRS-
Dirty-Dozen-List-of-Tax-Scams-for-the-2016-Filing-Season.
    \96\ Jon Morgan, Federal Trade Commission, It's the IRS calling . . 
. or is it? (Mar. 12, 2015) (``This has all the signs of an IRS 
imposter scam. In fact, the IRS won't call out of the blue to ask for 
payment, won't demand a specific form of payment, and won't leave a 
message threatening to sue you if you don't pay right away. Have you 
gotten a bogus IRS call like this? If you did, report the call to the 
FTC and to TIGTA--include the phone number it came from, along with any 
details you have.'').
---------------------------------------------------------------------------
    One part of the problem is that scammers are able to use a spoofed 
caller-ID so that it may look to the consumer answering the telephone 
as though a legitimate business is actually calling. That spoof is 
often the beginning of a telemarketing scam. Until we deal with caller 
ID spoofing, we won't be able separate the robocalls from legitimate 
businesses from the scammers.
    What is needed. The telephone companies must be required to provide 
easy to use and free services that enable consumers to block unwanted 
callers, especially robocalls. Additionally, effective and mandatory 
anti-spoofing technology needs to be developed and adopted immediately.
    We appreciate the sentiment behind Senator Nelson's introduction of 
Senate Bill 2558: the Spoofing Prevention Act of 2016. This bill is a 
good start in the battle to push for a solution to the serious problem 
of caller ID spoofing. However, we fear that the effective anti-
spoofing technology will not be developed until the telephone companies 
themselves are required to employ it.
    H.R. 4932, the ROBOCOP (Repeated Objectionable Bothering of 
Consumers on Phones) Act, gives consumers the ability to protect 
themselves from scam robocalls. It directs the FCC to require phone 
companies to offer free, optional tools to all of their customers that 
will block unwanted autodialed or prerecorded calls. Emergency 
robocalls and those calls to which the consumer has consented would not 
be affected by this mandate. The bill would also require phone 
companies to address the ``spoofing'' problem \97\ by improving call-
blocking technologies and robocall enforcement.\98\ This bill outlines 
a comprehensive solution to the robocall problem, and we ask the Senate 
to introduce a companion bill as quickly as possible.
---------------------------------------------------------------------------
    \97\ Federal Communications Commission, ``Spoofing and Caller ID,'' 
available at https://www.fcc.gov/consumers/guides/spoofing-and-caller-
id.
    \98\ H.R. 4932 (ROBOCOP Act), 114th Cong., 2d Sess. (2016).
---------------------------------------------------------------------------
    Our groups also encourage consumers to put pressure on the major 
phone companies to offer all of their customers effective robocall-
blocking tools at no additional cost. The FCC has declared that phone 
companies ``should'' offer these technologies,\99\ and last summer, 45 
state attorneys general called on five major phone companies to provide 
them to their customers.\100\ Over 600,000 people have already signed 
Consumers Union's petition asking AT&T, Verizon, and CenturyLink to 
provide these technologies to their customers. Consumers can join the 
campaign at www.EndRobocalls.org.
---------------------------------------------------------------------------
    \99\ Tom Wheeler, Another Win For Consumers, Federal Communications 
Commission Blog, (May 27, 2015) available at https://www.fcc.gov/news-
events/blog/2015/05/27/another-win-consumers.
    \100\ Letter from National Association of Attorneys General to 
Randall Stephenson (AT&T), Lowell C. McAdam (Verizon), Glen F. Post, 
III (CenturyLink), Marcelo Claure (Sprint), John Legere (T-Mobile) 
(July 22, 2015), available at http://www.oag.state.md.us/Press/NAAG
_Call_Blocking.pdf.
---------------------------------------------------------------------------
5. A real fix for the reassigned number problem.
    One of the chief bugaboos in the discussions about callers' 
professed difficulties complying with the FCC's 2015 Omnibus Order is 
this industry's statements that it has no reasonable way of knowing 
when the phone numbers have been reassigned to new people. So, they 
say, how can they reasonably avoid making these wrong number calls?
    There are several ways to avoid these calls. First, the calling 
industry can arrange for a fully accurate database by setting up one 
with the cooperation of the cell phone providers.\101\ A database would 
be fully accurate and relatively inexpensive to operate and access by 
the caller if has the following components:
---------------------------------------------------------------------------
    \101\ My understanding is that Twitter has already arranged for a 
private database providing this information.

  1.  All cell phone providers would participate by providing timely 
---------------------------------------------------------------------------
        information about cell phone numbers that change ownership.

  2.  The information provided would simply be--on each reporting 
        date--any telephone number that had been returned to the cell 
        phone company (because it was dropped or abandoned or 
        terminated) since the previous reporting date.

  3.  The providers would make these reports within a short time (one 
        day? two days?) from the date that the number was dropped.

  4.  Callers could access the database easily online and simply ask: 
        ``For telephone number XYZ, when was the last time it changed 
        ownership?'' There would be no big data dump from the database, 
        just the simple answer to the question: ``Number XYZ most 
        recently changed ownership on ABC date.''

  5.  The fees charged to callers for accessing the information would 
        pay for the maintenance of the database.

    The keys components here are (a) all cell phone providers would 
participate, (b) by providing timely and updated information, (c) 
allowing reasonable cost for callers to access.
    Indeed, there are already database systems on the market that 
provide, with a high degree of accuracy, information about whether 
phone numbers have been reassigned. For example, Early Warning, a data 
exchange company,\102\ runs a database that can be accessed by callers 
to determine the status of each of the numbers they want to call. Early 
Warning describes its procedure in this way:
---------------------------------------------------------------------------
    \102\ For more information, see Early Warning's website at http://
www.earlywarning.com/about-us.html.

---------------------------------------------------------------------------
    How Mobile Number Verification Service Works:

  1.  Organizations query the service, in real-time or batch, prior to 
        calling customers.

  2.  The service returns a number match or mismatch indicator based 
        on:

     Changes to the account since the last date the 
            [caller] contacted the customer.

     The network status of the number, if deactivated or 
            suspended. This allows the organization to refrain from 
            making an outbound call to an outdated number or out of 
            service number.

  3.  If the response returned is a ``number match'', then 
        organizations can add the verified number to the Auto-Dialer/
        Contact Center process. If a number is flagged as a mismatch, 
        organizations can take the steps necessary to re-verify, 
        confirm or update the customer file.\103\
---------------------------------------------------------------------------
    \103\ Data Sheet from 2014, describing the mobile number 
verification service offered by Early Warning (emphasis added). This 
data sheet is on file with the author.

    This company claims a high degree of accuracy: ``In a recent test, 
Mobile Number Verification Service correctly identified over 99 percent 
of mobile changes.'' \104\ We think it is likely that there are other 
companies that provide similar services or can develop them.
---------------------------------------------------------------------------
    \104\ Id.
---------------------------------------------------------------------------
    Additionally, callers can and should employ best practices that 
would include a number of practices to increase the accuracy of the 
callers' records to assure that the phone numbers for which they have 
consent to call still belong to their customers. After all it is in 
their interest to ensure that they are actually reaching their intended 
customers. Some ideas for these best practices might include:

   Capturing incoming numbers from customers and providing an 
        alert when the number called from is different than the one for 
        which the consumer has provided consent.

   Requesting current telephone numbers in all interactions 
        with customers, including online and paper transactions.

    The reassigned number problem need not really be a problem. Simple 
solutions are within reach. Congress should require that the cell phone 
providers participate in the database described above, and thereby 
provide a reasonable way to eradicate the reassigned numbers issue.
6. The vicarious liability rules under the TCPA are appropriate.
    The issue of the extent to which one company should be liable for 
the TCPA violations of others has arisen recently, largely as the 
result of a case brought against DISH Network, L.L.C. The case was 
first filed in 2009 by the U.S. Department of Justice and the states of 
Illinois, California, Ohio and North Carolina.
    The litigation was brought because DISH Network's dialers, as well 
as several of its retailers, were aggressively marketing DISH Network 
through robocalling consumers. Many of the calls were made to consumers 
who were on the National Do Not Call Registry. Some had specifically 
requested to DISH that they not to be called again. Consumers testified 
about the substantial inconvenience that DISH's calls caused them. 
Illinois consumers, for example, testified that the calls interrupted 
family meals, childcare, and taking care of sick relatives.
    Retailers were paid by DISH simply based on the sign-up volume. The 
evidence produced at trial demonstrated that DISH knew many of the 
retailers would do telemarketing as part of their sales practices. The 
Federal and state governments argued at trial that, among other things, 
DISH knew the retailers were making outbound telemarketing calls with 
automatic dialers, and that DISH was aware there were violations of 
both TCPA and telemarketing laws because of consumer complaints and 
enforcement actions.
    The issue is whether DISH Network can be held liable for the TCPA 
violations of its dialers and retailers. The FCC ruled that the Federal 
common law of agency is sufficient to show vicarious liability.\105\ 
The court has since agreed with that position, holding that the facts 
could support a finding that DISH Network is liable for the TCPA 
violations of the retailers making calls on its behalf.\106\ Although 
there have been reasoned positions advanced that third-party liability 
under the TCPA should reach further than agency principles to any act 
by a representative of or for the benefit of another,\107\ the FCC and 
the court were clearly right to apply at least the common law rules of 
agency liability to the entity--DISH Network--on whose behalf the calls 
were made.
---------------------------------------------------------------------------
    \105\ In re DISH Network, L.L.C., CG Docket No. 11-50, Declaratory 
Ruling, FCC 13-54, at 11 (May 9, 2013).
    \106\ United States v. DISH Network, L.L.C., 75 F. Supp. 3d 942, 
1042 (C.D. IL 2014), vacated in part on reconsideration, (Feb. 17, 
2015).
    \107\ In re DISH Network, L.L.C., CG Docket No. 11-50, Declaratory 
Ruling, FCC 13-54, at 4 (May 9, 2013).
---------------------------------------------------------------------------
    Congress should not consider passing any change to the vicarious 
liability standards applicable to TCPA enforcement cases.
    Conclusion. Thank you very much for the opportunity to testify 
today. I would be happy to answer any questions.
                                 ______
                                 
                                Appendix
Descriptions of National Organizations On Behalf of Which This 
        Testimony Is Filed
    Americans for Financial Reform is an unprecedented coalition of 
over 250 national, state and local groups who have come together to 
reform the financial industry. Members of our coalition include 
consumer, civil rights, investor, retiree, community, labor, faith 
based and business groups.
    The Center for Responsible Lending (CRL) is a nonprofit, non-
partisan research and policy organization dedicated to protecting 
homeownership and family wealth by working to eliminate abusive 
financial practices. CRL is an affiliate of Self-Help, a nonprofit 
community development financial institution. For 30 years, Self-Help 
has focused on creating asset building opportunities for low-income, 
rural, women-headed, and minority families, primarily through financing 
safe, affordable home loans.
    Consumer Action has been a champion of underrepresented consumers 
nationwide since 1971. A non-profit 501(c)(3) organization, Consumer 
Action focuses on consumer education that empowers low-and moderate-
income and limited-English-speaking consumers to financially prosper. 
It also advocates for consumers in the media and before lawmakers to 
advance consumer rights and promote industry-wide change. By providing 
consumer education materials in multiple languages, a free national 
hotline, a comprehensive website (www.consumer-action.org) and annual 
surveys of financial and consumer services, Consumer Action helps 
consumers assert their rights in the marketplace and make financially 
savvy choices. Over 7,000 community and grassroots organizations 
benefit annually from its extensive outreach programs, training 
materials and support.
    The Consumer Federation of America is an association of nearly 300 
nonprofit consumer groups that was established in 1968 to advance the 
consumer interest through research, advocacy and education.
    Consumers Union is the public policy and advocacy division of 
Consumer Reports. Consumers Union works for telecommunications reform, 
health reform, food and product safety, financial reform, and other 
consumer issues. Consumer Reports is the world's largest independent 
product-testing organization. Using its more than 50 labs, auto test 
center, and survey research center, the nonprofit rates thousands of 
products and services annually. Founded in 1936, Consumer Reports has 
over 8 million subscribers to its magazine, website, and other 
publications.
    MFY Legal Services envisions a society in which there is equal 
justice for all. Its mission is to achieve social justice, prioritizing 
the needs of people who are low-income, disenfranchised or have 
disabilities. MFY does this through providing the highest quality 
direct civil legal assistance, providing community education, entering 
into partnerships, engaging in policy advocacy, and bringing impact 
litigation. MFY assists more than 20,000 New Yorkers each year. MFY's 
Consumer Rights Project provides advice, counsel, and representation to 
low-income New Yorkers on a range of consumer problems, including 
unwanted and harassing debt collection robocalls, and supports 
strengthening the TCPA.
    The National Association of Consumer Advocates (NACA) is a non-
profit association of attorneys and consumer advocates committed to 
representing consumers' interests. Its members are private and public 
sector attorneys, legal services attorneys, law professors, and law 
students whose primary focus is the protection and representation of 
consumers. As a national organization fully committed to promoting 
justice for consumers, NACA's members and their clients are actively 
engaged in promoting a fair and open marketplace that forcefully 
protects the rights of consumers, particularly those of modest means.
    National Center for Law and Economic Justice (NCLEJ) works with 
low-income families, individuals, communities, and a wide range of 
organizations to advance the cause of economic justice through ground-
breaking, successful litigation, policy work, and support of grassroots 
organizing around the country.
    The National Consumer Law Center (NCLC) is a non-profit corporation 
founded in 1969 to assist legal services, consumer law attorneys, 
consumer advocates and public policy makers in using the powerful and 
complex tools of consumer law for just and fair treatment for all in 
the economic marketplace. NCLC has expertise in protecting low-income 
customer access to telecommunications, energy and water services in 
proceedings at state utility commissions, the FCC and FERC. We publish 
and annually supplement nineteen practice treatises that describe the 
law currently applicable to all types of consumer transactions, 
including Access to Utility Service (5th ed. 2011), covering 
telecommunications generally, and Federal Deception Law (2d ed. 2016), 
which includes a chapter on the Telephone Consumer Protection Act.
    Public Citizen is a national non-profit organization with more than 
225,000 members and supporters. We represent consumer interests through 
lobbying, litigation, administrative advocacy, research, and public 
education on a broad range of issues including consumer rights in the 
marketplace, product safety, financial regulation, safe and affordable 
health care, campaign finance reform and government ethics, fair trade, 
climate change, and corporate and government accountability.
    U.S. Public Interest Research Group (U.S. PIRG) serves as the 
Federation of State PIRGs, which are non-profit, non-partisan public 
interest advocacy organizations that take on powerful interests on 
behalf of their members. For years, U.S. PIRG's consumer program has 
designated a fair financial marketplace as a priority. Our research and 
advocacy work has focused on issues including credit and debit cards, 
deposit accounts, payday lending and rent-to-own, credit reporting and 
credit scoring and opposition to preemption of strong state laws and 
enforcement. On the web at www.uspirg.org.

    The Chairman. Thank you, Ms. Saunders.
    Mr. Lovich.

          STATEMENT OF RICHARD LOVICH, NATIONAL LEGAL

          COUNSEL, AMERICAN ASSOCIATION OF HEALTHCARE

                   ADMINISTRATIVE MANAGEMENT

    Mr. Lovich. Chairman Thune, Ranking Member Nelson, and 
members of the Committee, thank you for the opportunity to 
submit this testimony for the record.
    My name is Richard Lovich, and I serve as the National 
Legal Counsel for the American Association of Healthcare 
Administrative Management, known as AAHAM, which is a national 
organization actively representing the interests of healthcare 
administrative management professionals through a comprehensive 
program of legislative and regulatory monitoring and 
participation in many industry groups. I appreciate your 
holding this hearing today on these important issues.
    As you know, the FCC last July ruled on more than 20 
petitions seeking clarifications to the Telephone Consumer 
Protection Act and the FCC's TCPA rules. AAHAM was one of the 
petitioners and saw the clarification of what prior express 
consent means in the healthcare context, as well as a partial 
exemption from the Act to facilitate important healthcare-
related calls. The FCC's ruling did not clarify consent and 
exempted only certain types of calls made by healthcare 
providers. These calls cannot be financial in nature.
    Because of the ambiguity of the term ``prior express 
consent'' and whether related entities are protected, many 
well-intended healthcare organizations have been sued, and TCPA 
litigation continues to skyrocket.
    To be clear, healthcare providers cannot do their jobs 
effectively, efficiently, or cost-effect--in a cost-effective 
manner without using appropriate technology. The TCPA inhibits 
the use of such technology, and, as a result, drives the cost 
of healthcare higher.
    The TCPA was intended primarily to protect consumers from 
receiving unsolicited telemarketing calls in their homes at all 
hours of the day and night by restricting the use of 
autodialers and through requiring consent to be called. Mr. 
Chairman, AAHAM fully supports the goal and mission of the TCPA 
in helping to reduce unsolicited telemarketing calls. The 
complaints that have been mentioned here today typically are 
not involving healthcare providers.
    Despite its positive intent, 25 years since its passage, 
the TCPA has become severely outdated. It prevents Americans 
from receiving non-marketing service messages that they want, 
including healthcare appointment reminders, insurance coverage 
eligibility issues, Social Security disability eligibility and 
payment options, credit-card fraud alerts, notifications of 
travel changes, package delivery information, and many more. 
Further, it prevents them from receiving these communications 
on the devices that they prefer; specifically, their mobile 
telephones.
    At the time the TCPA legislation was passed, over 90 
percent of U.S. households relied on their home or landline 
phone. Today, the trend is away from landline phones; in fact, 
nearly half of all American homes no longer maintain a 
landline, relying exclusively on wireless or cell technology. 
Since the enactment of the TCPA, the use of text messaging has 
exploded. In 2012, more than 2.19 trillion text messages were 
sent and received. This could not be anticipated when the TCPA 
was first enacted.
    To make matters worse, new laws and regulations have been 
passed that make compliance with the TCPA even more difficult. 
Two examples are the Affordable Care Act and the new IRS 
regulations dealing with charitable hospitals.
    The ACA requires hospitals and outpatient clinics to 
perform post-discharge follow up with patients to reduce the 
rate of readmission, which is a big contributor to the cost of 
healthcare. We know the reminders, surveys, and education that 
have proven to lower readmission rates can be successfully and 
cost-effectively conducted by phone. However, this cannot be 
economically done under the current TCPA.
    Similarly, the IRS's 501(r) regulations create another 
unfunded Federal mandate. These regulations require hospitals 
to make reasonable efforts to determine whether an individual 
is eligible for financial assistance with regard to their 
hospital bills. Again, the TCPA prohibits the use of the most 
efficient manner in which to do this.
    By requiring the use of more labor-intensive methods to 
comply with the regulations, the FCC's TCPA decisions have 
added unnecessary expense, diverting resources that could 
otherwise be dedicated to patient care.
    In today's technologically burgeoning society, it makes no 
sense for the FCC to allow technology to be used to contact 
consumers via their landline phone but not their cell phones. 
Today, the FCC is looking at the modernization of the TCPA in 
the wrong way. The FCC should be looking at balancing the needs 
of consumers to obtain healthcare and other information quickly 
and efficiently through their mobile devices, and also be 
protected by the strong anti-telemarketing rules that already 
exist. We urge Congress to modernize the TCPA to allow 
automated dialing technology to be used to text or call mobile 
phones as long as these texts or calls are not for 
telemarketing purposes.
    Mr. Chairman and Ranking Member Nelson, modernization of 
the TCPA in the healthcare arena is not a partisan issue, nor 
should it be. This issue simply points out the need for 
government regulations to keep pace with the needs of today's 
consumers and businesses. This is about government working to 
bring healthcare costs down for consumers, not drive them up by 
continuing to require adherence to outdated rules and 
regulations.
    The current TCPA invites opportunistic parties to pressure 
caregivers for huge payouts. Lawsuits, even unsuccessful ones, 
require extraordinary time, cost, and effort to defend, and, 
thus, rob hospitals of the ability to fulfill their mission, 
which is delivering quality healthcare at a reasonable cost.
    Thank you for this opportunity. And if you or your staff 
have any questions, please feel free to contact me. I would 
love to work with the Committee on real solutions to this very 
important issue.
    [The prepared statement of Mr. Lovich follows:]

     Prepared Statement of Richard Lovich, National Legal Counsel, 
      American Association of Healthcare Administrative Management
    Chairman Thune, Ranking Member Nelson, and members of the 
Committee, thank you for the opportunity to submit this testimony for 
the record.
    My name is Richard Lovich and I serve as National Legal Counsel for 
the American Association of Healthcare Administrative Management 
(AAHAM), which is the national organization actively representing the 
interests of healthcare administrative management professionals through 
a comprehensive program of legislative and regulatory monitoring and 
its participation in industry groups such as ANSI, DISA, WEDI and NUBC. 
AAHAM is a major force in shaping the future of healthcare 
administrative management.
    I appreciate your holding this hearing today. As you know, the 
Federal Communications Commission recently ruled on over 22 petitions 
seeking changes to the current rules governing the Telephone Consumer 
Protection Act (TCPA). AAHAM was one of those groups that submitted a 
petition seeking clarification of how the FCC defines consent. Consent 
by definition may seem like something simple to answer, but we have 
found that consent does not mean the same thing to so many people and 
thus has caused our members to be sued over this issue. Healthcare 
providers cannot do their job effectively, efficiently, or in a cost 
effective manner without using technology today.
    The TCPA was signed into law in 1991 and already is out of date, 
yet, the FCC seems unwilling to consider real modernization. Technology 
has advanced so rapidly since 1991 and continues to develop at a pace 
the government cannot keep up with, yet agencies like the FCC, are 
unwilling to keep pace with these changes.
    The TCPA was designed to protect consumers from receiving 
unsolicited telemarketing calls in their homes at all hours of the day 
and night. To prevent these intrusive calls, Congress restricted the 
use of ``automatic telephone dialing systems,'' broadly limited the use 
of pre-recorded voice messages and prohibited outreach to mobile phones 
without ``prior express consent'' from the call recipient. Mr. 
Chairman, AAHAM supports that goal and mission of the TCPA. Nothing we 
or others have proposed would change that.
    Twenty three years since its passage, the TCPA has become outdated. 
It restricts Americans from receiving customer service messages they 
want--including healthcare appointment reminders, credit card fraud 
alerts, notifications of travel changes, power outage restoration, UPS 
delivery information and more. Further, it prevents them from receiving 
these communications on the device they prefer, their mobile phones.

   At the time the TCPA legislation was passed, over 90 percent 
        of U.S. households relied on their home or landline phone. Only 
        3 percent of Americans had a mobile phone, they were truly the 
        province of the elite. So much has changed since then.

   Today, the trend is away from landline phones, in fact 
        nearly 2 in 5 American homes no longer maintain a land line and 
        rely exclusively on wireless or cell technology.

   Since the enactment of the TCPA, a new form of 
        communication, text messaging, has emerged. In 2012, more than 
        2.19 trillion text messages were sent and received. In 1991, 
        legislators had no way of predicting the growth of the mobile 
        market or the rapid adoption of text messaging as a critical 
        form of communication.

    To make matters worse, new laws and regulations have been passed 
that make compliance with the TCPA even more difficult. The Affordable 
Care Act (ACA) as well as new IRS regulations dealing with charitable 
hospitals, place unfunded mandates on hospital providers the 
fulfillment of which is made difficult if not impossible by the current 
language and interpretation of the TCPA.
    The ACA was passed in 2011, requires hospitals and outpatient 
clinics to perform post-discharge follow-up with patients to reduce the 
rate of readmission, a big contributor to the cost of healthcare. We 
know the reminders, surveys, and education that have proven to lower 
readmission rates, can be successfully and cost effectively conducted 
by phone.
    However, under the TCPA, these calls place the hospital at high-
risk of violating the statute and facing penalties and defense fees and 
costs where the patient's primary contact number is a mobile number and 
the patient didn't expressly provide the mobile phone number for that 
purpose. The FCC's recent ruling helps by making some slight changes to 
the TCPA for healthcare related calls, but it just touches the surface 
and does not get to the root of the problem.
    The IRS's 501(r) regulations create another Federal Government 
unfunded mandate. These regulations require hospitals to call patients 
and orally inform them they may be eligible for financial assistance. A 
laudable endeavor and one hospitals are fully in favor of conducting. 
However, this is a process that could be more effectively, efficiently, 
and economically performed through the use of technology. The chilling 
effect of the ambiguity of the TCPA has required hospitals to refrain 
from the use of auto dialers and contacting patients through the use of 
mobile technology. By requiring the use of more labor intensive methods 
to comply with the regulations, the TCPA adds unnecessary expense which 
requires diverting resources that could otherwise be dedicated to 
patient care.
    President Obama has proposed ``clarifying that the use of automatic 
dialing systems and pre-recorded messages is allowed when contacting 
wireless phones in the collection of debt owed to or granted by the 
United States. In this time of fiscal constraint, the Administration 
believes that the Federal Government should ensure that all debt owed 
to the United States is collected as quickly and efficiently as 
possible and this provision could result in millions of defaulted debt 
being collected . . .''
    The practical impact on the care provider community is devastating. 
It is a significant financial strain on a hospital or any size, let 
alone a physician's office to try and determine if the phone number a 
patient left is a cell number or landline number. Then is it is a 
wireless number, determining if the provision of the number constituted 
express consent to call them and for what purpose? In addition, when 
can a hospital vendor rely upon the level of consent provided to the 
hospital to gauge if their work on behalf of the hospital is protected 
at least to the limited extent that the hospital is protected.
    The bottom line is that healthcare providers must be able to 
effectively, efficiently, and economically communicate with their 
patients. The TCPA robs our community of this fundamental aspect of the 
careprovider-patient relationship by imposing outdated and artificial 
restraints on effective communication. In addition, the TCPA prevents 
providers from fulfilling statutory and regulatory mandates in an 
effective and efficient manner, all at the expense of greater patient 
care.
    Those in the healthcare sector aren't looking to inundate consumers 
with telemarketing calls. The great majority of the communication with 
patients is care related and mandated by Federal statute or regulation. 
Any government mandate in and of itself should provide a safeguard 
against unwarranted lawsuits against hospitals for fulfillment of the 
essence of the caregiver-patient relationship and to make calls they 
are required by law to make.
    In today's technologically burgeoning society, it makes no sense 
for the FCC to allow technology to be used to contact consumers via 
their landline phone, but not their cell phones. Almost 40 percent of 
homes today rely on their cell phones as the primary means of 
communication. This number is expected to continue to rise. With this 
the trend, the FCC is missing a golden opportunity to truly modernize 
the TCPA in a way that will have beneficial impacts on industry, while 
also safeguarding the protections consumers want.
    Today the FCC is looking at the modernization the TCPA the wrong 
way. The FCC should be looking at meeting two mutually achievable 
goals-balancing the needs of consumers for obtaining healthcare and 
other information quickly and efficiently through their mobile devices, 
with maintaining the strong anti-telemarketing rules that already 
exist.
    This is not a challenging endeavor. AAHAM has met with key members 
of the FCC several times and the message has been the same. AAHAM has 
explained in great detail what healthcare calls are and what, in the 
healthcare industry, would be considered (and prohibited) healthcare 
telemarketing calls. Yet, still getting the needed changes has been 
challenging.
    We urge Congress to immediately modernize the TCPA to allow 
automated dialing technology to be used to text or call mobile phones, 
as long as these texts or calls are NOT for telemarketing purposes. 
These changes are critical to the future of care giver-patient 
communication.
    Mr. Chairman and Ranking Member Nelson this is not a partisan 
issue, nor should it be. This is a simple issue of the need for 
government regulations to keep pace with the needs of today's consumers 
and businesses. This is an issue about government working to bring 
healthcare costs down for consumers, not drive them up by continuing to 
rely on outdated rules and regulations.
    The TCPA is outdated and needs to be modernized immediately. The 
FCC's recent decision was disappointing and troubling for us in the 
healthcare industry. AAHAM's petition was very modest and simply asked 
for clarification on the definition of consent. The ruling did not 
effectively end this inquiry. This means that the care giver community, 
those upon which we all rely to provide effective healthcare to us, 
will continue to be subjected to costly lawsuits draining resources 
that would otherwise go to patient care.
    Thank you for this opportunity and if you or your staff have any 
questions, please feel free to contact me. I would love to work with 
the Committee on real solutions to this very important issue.

    The Chairman. Thank you, Mr. Lovich.
    Ms. Desai.

            STATEMENT OF MONICA S. DESAI, PARTNER, 
                      SQUIRE PATTON BOGGS

    Ms. Desai. Good morning, Chairman Thune, Ranking Member 
Nelson, and members of the Committee. Thank you very much for 
the opportunity to address the effects of the TCPA on consumers 
and on businesses.
    My name is Monica Desai. I'm a Partner at Square Patton 
Boggs. I'm testifying today in my own individual capacity and 
not on behalf of any specific client.
    Before joining Squire Patton Boggs, I spent over a decade 
in senior positions at the Federal Communications Commission, 
including service as Chief of the Consumer and Governmental 
Affairs Bureau, which is the bureau that oversees 
implementation of the TCPA policies and rules.
    In private practice, I work with a wide range of clients in 
a--in various industry sectors on TCPA compliance. They all 
share one very serious dilemma: how to manage TCPA risk in an 
environment where the normal, expected, or desired way to 
communicate is by calling a cell phone or sending a text, and 
where regulators and industry standard require certain out-
bound communications via a call or a text, but where every 
single call to a cell phone or every single text carries with 
it the potential risk of ruinous damages.
    When Congress implemented the TCPA, it struck a careful 
balance in protecting consumers from abusive calls that made 
them feel frightened and harassed, protecting public safety 
entities and businesses from the jammed phone lines caused by 
specialized dialing equipment that automatically generated and 
dialed thousands of random or sequential numbers, and 
protecting normal, expected, or desired communications.
    Today, there are no longer any safeguards protecting 
callers from TCPA liability for normal communications. It 
doesn't matter if you're a national bank, a local blood bank, 
or tire banks. You may have obtained prior express consent, but 
you will never know for certain before you make a call whether 
that number has been reassigned.
    The FCC created a safe harbor, but that safe harbor doesn't 
work. The safe harbor doesn't apply after one single reassigned 
call, whether or not there's any actual knowledge of a 
reassignment. You may be using modern technology that does not 
use, or even have, a random or sequential number generator, 
but, according to the FCC, you're still using an automatic 
telephone dialing system if your equipment has something more 
than the theoretical potential to be modified at some 
hypothetical point in the future to become an ATDS. No one 
knows what this means. This is not workable and not what 
Congress intended.
    As a result, beneficial consumer communications are 
chilled, compliance-minded entities are put into a Catch 22. 
Consumers trying to manage default and companies trying to 
engage in financial education are punished.
    First, many types of important and beneficial consumer 
communications trigger TCPA risk in the current environment, 
including communications from utilities to warn of service 
outages, mobile health programs, such as Text for Baby, schools 
to provide attendance notifications, nonprofits to ask for cans 
to restock food banks, credit unions to provide low-balance 
alerts, political candidates to provide information regarding 
townhalls and election information. The list goes on and on and 
on.
    Second, while the environment surrounding communications 
has become increasingly punitive, other regulatory agencies are 
increasingly encouraging, and even requiring, contact through 
phone calls and texts. Companies are diverting resources from 
core business functions and taking inefficient steps to 
mitigate TCPA risk. For example, companies are replacing modern 
technologies, which have many consumer benefits, with low-tech 
systems and fat-finger dialing, although this creates a higher 
risk of wrong-number calls. Larger companies with more 
resources are paying for multiple databases without any 
assurance of additional accuracy. Small businesses often can't 
afford to do so. Companies are requiring consumers to provide 
notice of any phone number change, and subjecting them to 
lawsuits for failure to do so.
    Finally, I want to emphasize that not getting a call 
doesn't mean that a debt will go away. What a call is likely to 
do, if a person is reached, is educate the consumer about 
available repayment options and potentially avoid negative 
consequences, such as the shutting off of a service, a bad 
credit report, foreclosure, or other legal remedy. The 
Department of Education stated that, when servicers are able to 
contact a borrower, they have a much better chance at helping 
the borrower resolve the delinquency or the default.
    In conclusion, I very much appreciate that the Commerce 
Committee wants to understand how the TCPA is impacting 
consumers and businesses today. I have three recommendations 
for restoring the balance that Congress worked so hard to 
achieve.
    First, I would--I would ask Congress to support the 
creation of a reassigned numbers database and allow a safe 
harbor for any caller who checks against the database to 
confirm that a number has not been reassigned.
    A second quicker step would be for Congress to confirm 
that, when it created a statutory defense for prior express 
consent of the called party, it did not intend for that defense 
to be meaningless.
    Third, Congress should confirm that, when it precisely 
defined an automatic telephone dialing system, it did not 
intend to broadly sweep into that definition any and every 
modern dialing technology.
    Congress did not intend for the TCPA to serve as a 
litigation trap, with callers being put at untenable risk for 
normal, expected, or desired communications and with consumers 
ultimately suffering the consequences.
    Thank you, and I look forward to your questions.
    [The prepared statement of Ms. Desai follows:]

  Prepared Statement of Monica S. Desai, Partner, Squire Patton Boggs
    Good morning Chairman Thune, Ranking Member Nelson, and Members of 
the Committee. Thank you for the opportunity to speak to the Committee 
today to address the effects of the Telephone Consumer Protection Act 
(TCPA)\1\ on consumers and business. My name is Monica Desai, and I am 
a partner at the law firm of Squire Patton Boggs. I am testifying today 
in my individual capacity, and not on behalf of any specific client.
---------------------------------------------------------------------------
    \1\ 47 U.S.C. Sec. 227; see also 47 C.F.R. Sec. 64.1200.
---------------------------------------------------------------------------
    When the TCPA was enacted 25 years ago, it was a welcome shield to 
protect consumers from abusive calls that made them feel frightened and 
harassed, and to protect essential public safety services and 
businesses from the jammed phone lines caused by specialized dialing 
equipment that automatically generated and dialed thousands of random 
or sequential numbers.\2\ Over time, the TCPA has been transformed into 
a sword for harassing and abusive lawsuits, with astonishingly 
disproportionate settlements for cases with little to no actual harm. 
Consumers and business, as well as governmental entities, suffer from 
the lack of common sense application of the statutory language to 
modern technology and the failure to take into account how consumers 
and businesses communicate today. The careful balance that Congress 
struck between protecting consumers and safeguarding beneficial calling 
practices has all but been eliminated. The resulting state of disarray 
is not without significant cost. I will focus my testimony on three 
direct results of unchecked abusive litigation under the TCPA:
---------------------------------------------------------------------------
    \2\ See H.R. Rep. 102-317 (Nov. 15, 1991); Rules and Regulations 
Implementing the Telephone Consumer Protection Act of 1991, CG Docket 
No. 02-278, Report and Order, FCC 03-153 (July 3, 2003).

---------------------------------------------------------------------------
  (1)  detrimental impact to beneficial consumer communications,

  (2)  detrimental impact to businesses, non-profits and government 
        entities engaging in normal, expected or desired 
        communications, and

  (3)  detrimental impact to consumers trying to manage default and 
        keep current on their payments.
Background
    Before joining Squire Patton Boggs, I spent over a decade in senior 
positions at the Federal Communications Commission (FCC) under both 
Republican and Democratic administrations, including service as Chief 
of the Consumer and Governmental Affairs Bureau at the FCC, the Bureau 
that oversees implementation of TCPA policy and rules.
    Since leaving the FCC in 2010, I have advised a broad range of 
clients in a wide variety of industries on TCPA compliance, including 
those in the retail, financial services, debt collection, insurance, 
energy, education, technology, and communications sectors. They all 
share one very serious dilemma: how to manage TCPA risk in an 
environment where the normal, expected or desired way to communicate is 
by calling a cell phone or sending a text, and where regulators and 
industry standards require certain outbound communications via call or 
text, but where every single call to a cell phone or every single text 
carries with it the risk of tens of millions to hundreds of millions in 
damages. While the plaintiffs bar advertises apps designed to entrap 
legitimate businesses with slogans such as ``Laugh all the Way to the 
Bank,'' \3\ such exposure is no joke for compliance-minded companies 
and organizations, and is ultimately harmful for consumers. This could 
not have been what Congress intended.
---------------------------------------------------------------------------
    \3\ See U.S. Chamber of Commerce et al. Notice of Ex Parte, CG 
Docket No. 02-278, at 4 (Sep. 24, 2014).
---------------------------------------------------------------------------
The TCPA--Trigger Points for Litigation
    The TCPA generally prohibits calls made to a cell phone using an 
``automatic telephone dialing system'' (or ``ATDS''), or artificial or 
prerecorded voice, without the prior express consent of the called 
party.\4\ The FCC has since ruled that if such calls deliver a 
telemarketing message, they require a very specific form of ``prior 
express written consent.'' \5\ The FCC has also determined that a text 
message counts as a ``call'' under the TCPA.\6\ Two of the largest 
areas of controversy triggering TCPA litigation involve whether an ATDS 
was used in a particular communication, and what happens when a caller 
calls a number that has been provided, but the number has been 
subsequently reassigned to another person without the knowledge of the 
caller.
---------------------------------------------------------------------------
    \4\ 47 U.S.C. Sec. 227(b)(1)(A); 47 C.F.R. Sec. 64.1200(a)(1).
    \5\ 47 C.F.R. Sec. 64.1200(a)(2); Rules and Regulations 
Implementing the Telephone Consumer Protection Act of 1991, CG Docket 
No. 02-278, Report and Order, FCC 12-21,  20 (Feb. 15, 2012).
    \6\ Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, CG Docket No. 02-278, Report and Order, FCC 03-
153,  165 (July 3, 2003).
---------------------------------------------------------------------------
    What is an ATDS? Congress provided that statutory liability for a 
call to a cell phone is not triggered unless a calling party uses an 
ATDS, or unless a caller uses an artificial or prerecorded voice. An 
ATDS is ``equipment which has the capacity . . . to store or produce 
telephone numbers to be called, using a random or sequential number 
generator; and . . . to dial such numbers.'' \7\ Whether or not 
particular dialing equipment is an ATDS has been a contentious issue in 
litigation. The definition turns in part on the ``capacity'' of that 
equipment. The term ``capacity'' is not defined in the statute--and 
many plaintiffs have taken the position that ``capacity'' means future, 
hypothetical ability to perform the requisite statutory functions--and 
not the present ability. Last year, despite numerous court cases to the 
contrary,\8\ the FCC agreed with the plaintiffs bar and found that 
``capacity'' means ``potential ability.'' \9\ Whether or not equipment 
uses or even has the statutorily required ``random or sequential number 
generator'' makes no difference under the FCC's interpretation. 
According to the FCC, if there is ``more than a theoretical potential 
that the equipment could be modified'' to meet the statutory definition 
of ATDS, then it is an ATDS.\10\ Or, in other words, the statutory 
definition does not matter. If the phone or dialing equipment used to 
make a call or send a text can ``theoretically'' become an ATDS in the 
future, the calling party is liable as if using an ATDS now, statute 
notwithstanding. The only equipment that the FCC confirms does not fall 
under this sweeping interpretation is a ``rotary-dial phone.'' \11\ 
Indeed, the FCC even refused to rule out the possibility that a 
smartphone now qualifies as an ATDS.\12\
---------------------------------------------------------------------------
    \7\ 47 U.S.C. Sec. 227(a)(1).
    \8\ See, e.g., Hunt v. 21st Mortg. Corp., 2013 U.S. Dist LEXIS 
132574, at *11 (N.D. Ala. 2013); Gragg v. Orange Cab Co., 995 F. Supp. 
2d 1189, 1193 (W.D. Wash. 2014).
    \9\ Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991 et al., CG Docket No. 02-278 et al., Declaratory 
Ruling, FCC 15-72,  19 (July 10, 2015) (``2015 TCPA Order'').
    \10\ 2015 TCPA Order  18.
    \11\ 2015 TCPA Order  18.
    \12\ ACA International et al. v. FCC et al., No. 15-1211, Brief for 
Respondents, at 34-36 (filed Jan. 15, 2016); see also ACA International 
et al. v. FCC et al., No. 15-1211, Brief for Petitioners ACA 
International et al., at 2, 13, 15, 24-25, 30-31 (filed Nov. 25, 2015); 
2015 TCPA Order  21.
---------------------------------------------------------------------------
    Reassigned Numbers: Who is the ``Called Party''? Congress created a 
statutory defense to the TCPA--calls and messages made to cell phones 
with the ``prior express consent of the called party'' are exempt from 
liability.\13\ ``Called party'' is not defined under the statute. 
Callers have commonly been sued when they obtain the requisite consent 
but the number is then reassigned to a new person unbeknownst to the 
caller.\14\ The FCC acknowledged that there is no comprehensive 
database of reassigned numbers, and many carriers do not participate in 
any database at all.\15\ Yet the FCC ruled strict liability under the 
TCPA is triggered if a caller calls or texts a number that the caller 
had consent to contact, even if the number was subsequently reassigned 
to a new subscriber without the knowledge of the caller (and without 
any practical way for the caller to find out in advance). The FCC 
created a ``one call safe harbor'' but the safe harbor stops applying 
literally after ``one'' call--whether or not there is any actual 
knowledge of a reassignment,\16\ including, for example, if the caller 
is greeted with a machine voice-mail message. There is no explanation 
of how the ``safe harbor'' would work in the text context. This 
interpretation of ``called party,'' combined with the unworkable ``safe 
harbor,'' eviscerates the statutory defense for ``prior express 
consent'' provided by Congress.
---------------------------------------------------------------------------
    \13\ 47 U.S.C. Sec. 227(b)(1)(A); 47 C.F.R. Sec. 64.1200(a)(1).
    \14\ By one estimate, almost 37 million phone numbers are recycled 
each year. Alyssa Abkowitz, Wrong Number? Blame Companies' Recycling, 
The Wall Street Journal (Dec. 1, 2011), available at http://
www.wsj.com/articles/SB10001424052970204012004577070122687462582.
    \15\ 2015 TCPA Order  85 (``The record indicates that tools help 
callers determine whether a number has been reassigned, but that they 
will not in every case identify numbers that have been reassigned. Even 
where the caller is taking ongoing steps reasonably designed to 
discover reassignments and to cease calls, we recognize that these 
steps may not solve the problem in its entirety.'') See also Comments 
of Twitter, Inc., CG Docket No. 02-278, at 9 (Apr. 23, 2015) (stating 
that ``Twitter obtains information about deactivated numbers from those 
wireless carriers willing to supply it, and then uses privately 
purchased data to assess whether the number was reassigned'').
    \16\ 2015 TCPA Order  90.
---------------------------------------------------------------------------
    These interpretations leave callers in an impossible situation--(1) 
they cannot rely on the statutory definition of an ATDS, because the 
FCC has determined that the definition applies so long as there is the 
``theoretical potential'' that their dialing equipment ``could be 
modified'' to become an ATDS in the future; and (2) they cannot rely on 
consent (as Congress intended) because of the lack of any reliable way 
to determine if a number has been reassigned, and the uselessness of 
the ``one call safe harbor.''
    Combine this impossible situation with a private right of action 
for violations, strict liability statutory damages of $500 per call or 
text (and up to $1,500 for each ``willful'' or ``knowing'' 
violation),\17\ and the result is liability exposure in a single class 
action lawsuit quickly reaching tens of millions to hundreds of 
millions of dollars or higher.
---------------------------------------------------------------------------
    \17\ 47 U.S.C. Sec. 227(b)(3).
---------------------------------------------------------------------------
(1) Detrimental Impact to Beneficial Consumer Communications
    I first became aware of abusive TCPA litigation in 2012, when 
SoundBite Communications, Inc., located in Bedford, Massachusetts, 
approached me after it had been targeted with a multi-million dollar 
TCPA class action lawsuit. The purported violation? Sending an 
immediate, one-time confirmation reply message whenever a customer sent 
a request to stop receiving future text messages. In sending the 
confirmation message, SoundBite was adhering to consumer best 
practices, and acting consistent with wireless industry requirements to 
send such a confirmation. I learned that SoundBite was not alone--at 
the time, many other companies, including Redbox, American Express, 
Barclays Bank, Citibank, Taco Bell, NASCAR, the NFL, and GameStop, were 
all being targeted with multi-million dollar class action lawsuits 
based on these one-time confirmations. Due to the lawsuit, SoundBite, 
then a publicly traded company with approximately 150 employees, was 
threatened with going into bankruptcy because of the potential risk of 
TCPA exposure. We petitioned the FCC to provide relief on this 
issue.\18\ Then-Senator John Kerry and Senator Scott Brown asked the 
FCC to take into consideration that sending a confirmation in response 
to a request to cease future text messages ``is not harmful to 
consumers, it is useful.'' \19\ We were grateful the FCC recognized the 
usefulness of such messages to consumers and found them to be 
consistent with consumer expectations when it granted our petition and 
declared a simple confirmation of an opt-out did not violate the 
TCPA.\20\
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    \18\ SoundBite Communications, Inc. Petition for Declaratory 
Ruling, CG Docket No. 02-278 (Feb. 16, 2012).
    \19\ Letter from Senators John F. Kerry and Scott P. Brown to 
Chairman Julius Genachowski, Federal Communications Commission (Apr. 
13, 2012); SoundBite Communications, Inc. Notice of Ex Parte, CG Docket 
No. CG 02-278, at 2 n. 4 (June 29, 2012).
    \20\ See Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991; SoundBite Communications, Inc. Petition for 
Expedited Declaratory Ruling, CG Docket No. 02-278, Declaratory Ruling, 
FCC 12-143,  8 (Nov. 29, 2012).
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    Similarly, the Retail Industry Leaders Association (RILA) explained 
to the FCC that while it has become increasingly common for smartphone-
equipped consumers to expect and demand concierge-like, personalized 
experiences from retailers, the fear of TCPA litigation threatened one 
particularly popular emerging service--``on demand'' texts.\21\ In that 
context, a consumer sees a display advertisement (e.g., a store display 
ad to text ``offer to 12-345 for 20 percent off your next purchase''). 
If interested, the consumer texts the word ``offer'' to 12-345, and 
receives a near instant response text containing the desired offer. We 
were again grateful that the FCC recognized that this type of 
convenient and efficient communication--that consumers were proactively 
requesting--should not subject a retailer to frivolous class action 
lawsuits.\22\
---------------------------------------------------------------------------
    \21\ Retail Industry Leaders Association Petition for Declaratory 
Ruling, CG Docket No. 02-278 (Dec. 30, 2013); Comments of RILA, CG 
Docket No. 02-278, at 2 (Feb. 21, 2014).
    \22\ 2015 TCPA Order  103-06 (the FCC ``agree[d] with 
commenters'' that ``consumers welcome'' such text messages).
---------------------------------------------------------------------------
    However, there are many, many other types of communications that 
are also useful to consumers, or that are otherwise normal, expected or 
desired, that are already the subject of TCPA class action litigation 
or create risk for TCPA liability--with potentially ruinous results for 
the entities sending the text messages or making the calls. For 
example:

   Utilities are at risk: Calls or texts to warn about planned 
        or unplanned service outages, provide updates about outages or 
        service restoration, ask for confirmation of service 
        restoration or information about the lack of service, provide 
        notification of meter work, tree-trimming, or other field work, 
        verify eligibility for special rates or services, such as 
        medical, disability, or low-income rates, programs and 
        services, warn about payment or other problems that threaten 
        service curtailment, and provide reminders about time-of-use 
        pricing and other demand/response events, are all threatened by 
        TCPA litigation.\23\
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    \23\ Edison Electric Institute and the American Gas Association 
Petition for Expedited Declaratory Ruling, CG Docket No. 02-278, at 3 
(Feb. 12, 2015) (``EEI/AGA Petition''). The EEI/AGA Petition explains 
that one EEI member company was sued under the TCPA after it sent a 
text message to its customers that had previously provided a wireless 
telephone number to the company notifying them of a new text program 
designed ``to inform customers of power outages by text message, and to 
allow customers to report an outage to the utility by text message.'' 
Id. at 10; see also Grant v. Commonwealth Edison, No. 1:13-cv-08310 
(N.D. Ill.).

   Mobile health programs are at risk: The U.S. Department of 
        Health and Human Services has touted mobile health programs as 
        ``an opportunity to improve health knowledge, behaviors, and 
        clinical outcomes, particularly among hard-to-reach 
        populations'' through text programs, including, for example, to 
        influence behavior changes to improve short-term smoking 
        cessation outcomes as well as short-term diabetes management 
        and clinical outcomes.\24\ Federal agency policies encourage 
        aggressive use of such programs and use text messaging and ATDS 
        calls, but TCPA lawsuits stifle such programs. Anthem points 
        out that federally supported text messaging initiatives are all 
        at risk, including Text4baby, which provides information and 
        referral times keyed to the prenatal stage or age and 
        developmental stage of the child; QuitNowTXT, which delivers 
        day-specific quit messages to persons in the process of smoking 
        cessation; and Health Alerts On-the-Go, which provides the 
        Centers for Disease Control and Prevention's health 
        information, including seasonal flu and public health 
        emergencies.\25\
---------------------------------------------------------------------------
    \24\ Anthem Petition for Declaratory Ruling and Exemption Regarding 
Non-Telemarketing Healthcare Calls, CG Docket No. 02-278, at 4-5 (June 
10, 2015) (``Anthem Petition''); see also U.S. Dep't of Health & Human 
Services, Using Health Text Messages to Improve Consumer Health 
Knowledge, Behaviors, and Outcomes: An Environmental Scan, at 1 (May 
2014), available at Khttp://www.hrsa.gov/healthit/txt4tots/
environmentalscan.pdf.
    \25\ Anthem Petition at 5-8 (noting the societal benefits of these 
communications).

   Important school communications are threatened by TCPA 
        litigation: Attendance messages alerting parents that a child 
        did not arrive at school as expected; alerts regarding 
        emergency situations (weather, facilities issue, fire, health 
        risk, threat situation); outreach messages providing 
        information regarding school activities (teacher conferences, 
        back-to-school night); and survey messages, which allow 
        recipients to RSVP to events or provide input on an important 
        issue using a telephone keypad, are all at risk.\26\
---------------------------------------------------------------------------
    \26\ Blackboard, Inc. Petition for Declaratory Ruling, CG Docket 
No. 02-278, at 8 (Feb. 24, 2016).

   Nonprofits are equally impacted: The National Council of 
        Nonprofits has noted that nonprofits--including entities like 
        American Red Cross, Salvation Army, United Ways, food banks, 
        emergency shelters, food pantries and soup kitchens--call and 
        send text messages for a wide variety of reasons, including to 
        provide event updates, schedule changes, and important safety 
        information, and to provide patients and clients with reminders 
        of appointments, and other helpful notifications that people 
        generally want.\27\ These communications are subject to TCPA 
        risk.
---------------------------------------------------------------------------
    \27\ Comments of National Council of Nonprofits, CG Docket No. 02-
278, at 2-3 (Sept. 24, 2014).

   Financial institutions are constrained in their ability to 
        deliver time-sensitive and valued financial communications: 
        Fraud and identity theft alerts, out-of-pattern activity 
        notices, data breach information, fund transfer confirmations, 
        responses to service inquiries, FEMA disaster related financial 
        relief and service options, fee avoidance and low balance 
        notifications, due date reminders, notifications to prevent 
        lapses in insurance coverage, account closure and other 
        milestone notice, and loan repayment counseling, are all at 
        risk.\28\
---------------------------------------------------------------------------
    \28\ The FCC recognized that financial institutions must be able to 
contact consumers to quickly alert them to fraud, a data breach, 
related remediation, and money transfers. 2015 TCPA Order  125, 127-
39. Although the FCC provided an exemption for such communications, the 
conditions it imposed in connection with the exemption made the 
exemption virtually unusable. See American Bankers Association Petition 
for Reconsideration, CG Docket No. 02-278 et al. (Aug. 8, 2015).

   Political discourse and communications that provide 
        important information about issues of public concern, including 
        ``tele-town hall'' discussions,\29\ the voting process, and 
        other election information.\30\
---------------------------------------------------------------------------
    \29\ See Marco Trujillo, Lawmakers could be violating robocall 
restrictions, The Hill (July 28, 2015); Federal Communications 
Commission, FAQs--Tele-Town Halls (July 31, 2015), available at https:/
/www.fcc.gov/document/faqs-tele-town-hall-robocalls.
    \30\ The American Association of Political Consultants, The 
Democratic Party of Oregon, Public Policy Polling, Tea Party Forward 
PAC, and Washington State Democratic Central Committee have filed a 
lawsuit alleging that the ban on certain calls to cell phones under the 
TCPA is an unconstitutional violation of their First Amendment rights 
because it is content based and cannot withstand strict scrutiny. 
American Association of Political Consultants, Inc. et al. v. Loretta 
Lynch, Case No. 5:16-cv-00252-D, Complaint (May 12, 2016); see also 
Shamblin v. Obama for America et al., 2015 U.S. Dist. LEXIS 54849 (M.D. 
Fla. Apr. 27, 2015) (complaint alleged violations of TCPA based on 
prerecorded calls explaining how to vote by mail, and calls encouraging 
early voting, instructions to bring a driver's license to vote, and 
voting locations; case decided on class certification issue without 
discussion of TCPA claims).

   Shopping and retail notifications requested by consumers: 
        Threatened communications include those that inform a consumer 
        that an online purchase is available or has been delivered or 
        offers and discount information that a consumer signs up for 
        and expects to receive.\31\
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    \31\ ACA International et al. v. FCC et al., No. 15-1211, Brief of 
Retail Litigation Center, Inc., National Retail Federation, and 
National Restaurant Association as Amici Curiae in Support of 
Petitioners, at 9-10 (D.C. Cir. filed Dec. 2, 2015).

   Social media notifications that consumers expect and 
        desire.\32\
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    \32\ See, e.g., Comments of Twitter, Inc., CG Docket No. 02-278, at 
3 (Apr. 22, 2015) (Twitter allows users to choose to ``have Tweets sent 
to their cell phones as text messages'' by inputting their phone 
numbers and providing express consent, but because telephone numbers 
are reassigned so frequently and due to the ``hyper-litigious [TCPA] 
environment, innovative companies increasingly must choose between 
denying consumers information that they have requested or being 
targeted by TCPA plaintiffs' attorneys filing shake-down suits.'').

   Food safety notices have been the subject of TCPA 
        litigation.\33\
---------------------------------------------------------------------------
    \33\ Rubio's Restaurant, Inc. Petition for Declaratory Ruling, CG 
Docket No. 02-278, at 1-3 (Aug. 11, 2014) (In order to ``promptly 
respond to health and safety issues affecting the over 190 of Rubio's 
restaurant locations,'' Rubio's provides a ``Remote Messaging'' service 
that contacts only telephone numbers of Rubio's ``Quality Assistance'' 
staff. The Remote Messaging service is used ``exclusively to report 
food safety-related issues, including, but not limited to, alleged 
foodborne illnesses, alleged foreign objects found in food, or 
suspicions of a team member having a disease transmittable through 
food.'' Rubio's was sued under the TCPA when a Remote Messaging alert 
was ``sent to a cellphone number previously assigned to a Rubio's 
[Quality Assistance] Staff member who subsequently lost his phone,'' 
after which the number was reassigned without Rubio's knowledge.).

    A confluence of factors have fueled this fire of TCPA litigation: 
(1) increasing reliance on cell phones as the primary or only means of 
communications;\34\ (2) increasing requirements by regulatory agencies 
to make specific outbound communications;\35\ (3) industry guidelines 
requiring certain outbound communications in order to send messages 
through text channels;\36\ and (4) the fact that there is no reliable 
way to determine if a number has been reassigned.\37\ Combine these 
factors with high strict liability damages, no limits on total damages, 
and very low barriers to filing even the most frivolous of lawsuits, 
and the reasons for skyrocketing class action litigation in this area 
are clear.
---------------------------------------------------------------------------
    \34\ The Center for Disease Control's December 2015 Wireless 
Substitution Report estimates wireless use during the first half of 
2015, finding: (1) as of June 2015, 71.3 percent of young adults (ages 
25-29) lived in wireless only households. Also, 67.8 percent of adults 
aged 30-34 lived in wireless-only households, and the percentage of 
adults living with only wireless telephones decreased as age increased 
beyond 35 years--56.6 percent for those 35-44; 40.8 percent for those 
45-64; and 19.3 percent for those 65 and over; and (2) the rate of 
wireless-only households has grown significantly over the past several 
years. For example, the number of adults aged 25-29 that live in 
households with only wireless telephones increased by 10 percentage 
points between 2012 and 2015. The number of adults aged 35-44 that live 
in wireless-only households grew by 17.5 percentage points between June 
2012 and June 2015. See U.S. Dep't of Health and Human Services, 
Centers for Disease Control and Prevention, Wireless Substitution: 
Early Release of Estimates from the National Health Interview Survey, 
January-June 2015, at 6 (Dec. 2015), available at http://www.cdc.gov/
nchs/data/nhis/earlyrelease/wireless
201512.pdf.
    \35\ See, e.g., the CFPB ``Early Intervention Rule.'' 12 C.F.R. 
Sec. 1024.39(a).
    \36\ CTIA--The Wireless Association, CTIA Short Code Monitoring 
Program Short Code Monitoring Handbook, v. 1.5.2, at 2 (Oct. 1, 2015) 
(requiring that an ``opt-in confirmation message . . . must be sent to 
customers always'' (emphasis retained)).
    \37\ 2015 TCPA Order  85 (the FCC ``agree[d] . . . that callers 
lack guaranteed methods to discover all reassignments immediately after 
they occur'').
---------------------------------------------------------------------------
    Unfortunately, these key background factors have not only 
persisted, but the situation has only become worse. In 2010, there were 
354 TCPA cases filed.\38\ In 2015, there were 3,710.\39\
---------------------------------------------------------------------------
    \38\ See WebRecon, LLC, Out Like a Lion . . . Debt Collection 
Litigation & CFPB Complaint Statistics, Dec 2015 & Year in Review, 
Consumer Litigation: 2007-2015 (2016), available at http://
webrecon.com/out-like-a-lion-debt-collection-litigation-cfpb-complaint-
statistics-dec-2015-year-in-review/.
    \39\ Id.
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(2) ``Catch-22'' for Businesses, Non-Profits and Governmental Entities
    The specter of high-stakes ``bet the company'' litigation--which 
can be based on a single call or a single text--and which has now been 
amplified by the FCC's recent interpretations, has made it punitive for 
businesses and other entities to engage in normal, expected or desired 
communications by call or text.
    Financial institutions in particular have often been trapped in a 
``catch-22'' \40\ as a result of myriad statutory and regulatory 
obligations to make outbound communications to customers, while FCC 
rules penalize them for doing so. For example, the Consumer Financial 
Protection Bureau's (CFPB) ``Early Intervention Rule'' requires ``live 
contact'' or a good faith effort to establish live contact within 36 
days after a mortgage loan becomes delinquent.\41\ The Home Affordable 
Modification Program requires that an entity ``proactively solicit'' 
customers for inclusion--by making a minimum of four telephone calls to 
the customer at different times of the day.\42\
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    \40\ ``A problematic situation for which the only solution is 
denied by a circumstance inherent in the problem or by a rule.'' 
Merriam-Webster, Catch-22 (last visited May 16, 2016), available at 
http://www.merriam-webster.com/dictionary/catch%E2%80%9322.
    \41\ 12 C.F.R. Sec. 1024.39(a).
    \42\ Home Affordable Modification Program, Handbook for Servicers 
of Non-GSE Mortgages, Making Home Affordable Program, at 46 (Dec. 2, 
2010), available at https://www.hmpadmin
.com/portal/programs/docs/hamp_servicer/mhahandbook_30.pdf.
---------------------------------------------------------------------------
    At the same time that financial regulators are advocating that 
financial institutions communicate with borrowers and create financial 
inclusion tools, the TCPA as interpreted by the FCC is stifling the 
exact type of communications that would benefit consumers. For 
instance, the CFPB recognized that especially for ``economically 
vulnerable consumers,'' tracking transactions through mobile 
technologies such as text messaging may help consumers ``achieve their 
financial goals'' and can ``enhance access to safer, more affordable 
products and services in ways that can improve their economic lives.'' 
\43\ And, CFPB Director Richard Cordray positively described the use of 
text alerts to provide real time information about funds to customers 
as an ``innovative approach[] to improving customer service.'' \44\ 
Further, just this month, the Federal Deposit Insurance Corporation 
(FDIC) released a request for comment on ``Mobile Financial Services 
Strategies and Participation in Economic Inclusion Demonstrations'' 
\45\ as a continuation of their October 2015 qualitative research that 
found that text message alerts give consumers ``Access to account 
information;'' ``Help[] consumers avoid fees;'' and ``Help[] monitor 
accounts for fraud.'' \46\ In fact, the FDIC research concluded that 
underbanked consumers may prefer texts to e-mails when receiving alerts 
because texts are ``Faster,'' ``Easier to receive,'' ``Attention 
grabbing,'' and ``Quicker and easier to digest.'' \47\ According to an 
Underbanked Mobile Financial Services User interviewed as part of the 
study, ``[t]ext-it's immediate. E-mail, you have to go in and actually 
be checking your e-mail account.'' \48\
---------------------------------------------------------------------------
    \43\ CFPB, CFPB Mobile Financial Services: A summary of comments 
from the public on opportunities, challenges, and risks for the 
underserved., at 10. (Nov. 2015), available at http://
files.consumerfinance.gov/f/201511_cfpb_mobile-financial-services.pdf.
    \44\ CFPB, Prepared Remarks by Richard Cordray at the CFPB 
Roundtable on Overdraft Practices (Feb. 22, 2012), available at http://
www.consumerfinance.gov/about-us/newsroom/prepared-remarks-by-richard-
cordray-at-the-cfpb-roundtable-on-overdraft-practices/.
    \45\ Federal Deposit Insurance Corporation, Request for Comments on 
Mobile Financial Services Strategies and Participation in Economic 
Inclusion Demonstrations (May 3, 2016), available at https://
www.fdic.gov/news/news/financial/2016/fil16032.pdf.
    \46\ Federal Deposit Insurance Corporation, Qualitative Research 
for Mobile Financial Services for Underserved Consumers, at 19 (Oct. 
30, 2015), available at https://www.fdic.gov/about/comein/2015/come-in-
2015.pdf.
    \47\ Id. at 21.
    \48\ Id.
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    But it is not just financial institutions that are caught in this 
bind. The wireless industry requires sending an affirmative ``opt-in 
confirmation message'' in order for companies to send text messages 
associated with company programs across carrier networks.\49\ The 
Federal Trade Commission has emphasized the importance of proactive 
communications in connection with data breaches and is urging required 
notifications.\50\ Utilities are required under some state laws to 
engage in proactive communications.\51\ The Consumer Product Safety 
Commission's product safety ``Recall Checklist'' recommends that 
companies send ``text messages to customers'' as part of an ``effective 
and comprehensive product safety recall.'' \52\
---------------------------------------------------------------------------
    \49\ CTIA--The Wireless Association, CTIA Short Code Monitoring 
Program Short Code Monitoring Handbook, v. 1.5.2, at 2 (Oct. 1, 2015).
    \50\ See Prepared Statement of Edith Ramirez, Protecting Personal 
Consumer Information from Cyber Attacks and Data Breaches, Before the 
Senate Committee on Commerce, Science, and Transportation, 113th Cong., 
at 2 (Mar. 26, 2014) (explaining that the ``FTC supports Federal 
legislation that would strengthen existing data security standards and 
require companies, in appropriate circumstances, to provide 
notification to consumers when there is a security breach''), available 
at https://www.ftc.gov/system/files/documents/public_statements/294091/
ramirez
_data_security_oral_statement_03-26-2014.pdf.
    \51\ For example, New York requires utilities to provide 
``[s]pecial notice . . . during the cold weather protection period 
(November 1 to April 15) before any heat related utility service can be 
shut off. The utility must notify each tenant that service will be shut 
off and must also attempt to find out if a serious health or safety 
program would be caused in the household by the shutoff.'' See New York 
State Dep't of Public Service, Consumer Guide: The Handbook for Utility 
Customers with Disabilities (Dec. 18, 2012), available at http://
www3.dps.ny.gov/W
/PSCWeb.nsf/All/1882DD3FA554D6D585257687006F395C?OpenDocument.
    \52\ See Consumer Product Safety Commission, Recall Guidance, 
Recall Checklist (last visited May 16, 2016), available at http://
www.cpsc.gov/en/Business--Manufacturing/Recall-Guidance/.
---------------------------------------------------------------------------
    Compliance-minded companies are diverting resources from core 
business functions and taking inefficient steps to avoid frivolous 
lawsuits, with detrimental results for both companies and consumers:

        Purposefully Adding Technology Inefficiencies--Automated 
        dialing technologies have many consumer benefits: they improve 
        the ability to honor consumer contact preferences (such as time 
        of day to call, specific dates to call, to what number to 
        call); they improve the ability to honor ``do not call'' 
        requests; they help govern call frequency attempts (daily, 
        weekly, monthly); they help manage time between calls; and they 
        improve access to historical account information, and 
        information regarding financial assistance programs. Yet 
        despite these benefits, companies that have already spent tens 
        of thousands to hundreds of thousands of dollars on dialing 
        technologies that are not an ATDS based on the statutory 
        definition, are now evaluating and spending resources to add 
        functions such as ``self-destruct'' mechanisms that will wipe 
        out a calling system in the event a software update attempt is 
        made. Companies are making calls from the most basic, ``de-
        engineered'' systems, but are still getting sued on the theory 
        that such a calling system could theoretically get ``plug[ged] 
        . . . into'' an ATDS.\53\ Companies are moving to offshore call 
        centers (where manual dialing is more efficient) and requiring 
        manual dialing on desktop phones--and still getting sued.\54\ 
        Companies are purposefully interjecting elements of ``human 
        intervention'' to make calls even where that carries a risk of 
        wrong number calls and is less efficient.
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    \53\ ACA International Notice of Ex Parte, CG Docket No. 02-278, at 
3 (May 9, 2014).
    \54\ See Leschinsky v. Inter-Continental Hotels Corporation et al., 
Case No. 8:15-cv-01470-JSM-MAP, Defendants Orange Lake Country Club, 
Inc., and Inter-Continental Hotel Corporation's Dispositive Motion for 
Summary Judgment and Incorporated Memorandum of Law, at 1-2, 5-9 (Sept. 
28, 2015).

        Databases--Companies that have more resources are sometimes 
        paying for multiple databases to check for reassigned numbers, 
        still without any assurance of accuracy (as many carriers do 
        not participate in any database at all). Smaller organizations, 
        and those with more limited resources such as many non-profits, 
---------------------------------------------------------------------------
        cannot afford to do so.

        Terms and Conditions--Per the FCC's suggestion in the 2015 
        Order, companies are starting to add requirements to their 
        terms and conditions that consumers who consent to receiving 
        calls or texts must affirmatively provide a notification if 
        they have abandoned the number they have provided. The FCC 
        stated that ``[n]othing in the TCPA or our rules prevents 
        parties from creating, through a contract or other private 
        agreement, an obligation for the person giving consent to 
        notify the caller when the number has been relinquished,'' and 
        that ``the caller may wish to seek legal remedies for violation 
        of the agreement.'' \55\ It appears that the FCC is suggesting 
        callers sue their customers for not notifying the caller when 
        they change phone numbers.
---------------------------------------------------------------------------
    \55\ 2015 TCPA Order  86, n. 302. In his dissent from the Order, 
Commissioner Pai stated that perhaps the ``most shocking'' part of the 
ruling was the FCC's suggestion that ``companies . . . sue their 
customers.'' 2015 TCPA Order Dissenting Statement of Commissioner Ajit 
Pai at 121. Commissioner O'Rielly's dissent also noted the oddity of 
the FCC's position that it is ``reasonable to have companies sue their 
own customers.'' 2015 TCPA Order Statement of Commissioner Michael 
O'Rielly Dissenting in Part and Approving in Part at 134 (emphasis 
retained).

        Reducing Communications--Companies are evaluating what 
        communications are absolutely necessary, and reducing consumer-
        beneficial communications as described in the first section. 
        Indeed, many companies have chosen to stop or significantly 
---------------------------------------------------------------------------
        curtail elective helpful communications.

        Insurance Premiums--Due to the high risk of exposure to 
        frivolous litigation and potentially astronomical damages, 
        there is very little choice for TCPA insurance (sometimes none 
        at all); if insurance is available, the premiums and the 
        deductibles are extremely high.\56\
---------------------------------------------------------------------------
    \56\ ACA International Notice of Ex Parte, CG Docket No. 02-278, at 
2 (May 9, 2014).
---------------------------------------------------------------------------
(3) Detrimental Impact to Consumers Trying to Manage Default and Keep 
        Current on Payments
    Keeping customers up to date on payments and managing their default 
is critical for financial well-being. Defaulting on payments can have 
long-term devastative consequences for consumers by impacting their 
credit score and ability to obtain credit in the future. Most people 
need credit to buy their home, finance their child's education, or 
start the small business they have worked toward. These purchases are 
made much more difficult with a damaged--or even bruised--credit score, 
which is why it is vital that consumers are aware of their financial 
obligations.
    It is important to keep in mind that not getting a call does not 
mean that the debt will somehow go away. What a call is likely to do, 
if a person is reached, is educate the consumer about available 
repayment options, potentially avoid negative consequences such as 
shutting off of a service, increased debt due to added collection costs 
and fees, a bad credit report that can harm future borrowing, 
foreclosure on a home, repossession, or other legal remedy. There are 
consumer benefits to these calls in addition to avoiding default--for 
example, by one estimate, around 25 percent of identity theft 
occurrences are discovered through the debt collection process.\57\
---------------------------------------------------------------------------
    \57\ Id. at 5.
---------------------------------------------------------------------------
    In addition to consumers' critical credit needs, servicing debt and 
managing default are critical to government and non-government entities 
alike. Being able to make a call to discuss a debt is impactful for the 
Federal Government, state and local governments, colleges and 
universities, healthcare institutions, retailers, financial 
institutions, and indeed all types of businesses large and small.
    The City of Philadelphia, for example, said in a 2013 Request for 
Information that funds recovered by debt collection agencies ``are 
essential to support important community services, like public safety, 
a clean environment and quality public schools. Failure to collect all 
funds owed to the City jeopardizes much needed services and increases 
the financial burden on compliant taxpayers and residents.'' \58\
---------------------------------------------------------------------------
    \58\ City of Philadelphia, Request for Information, Accounts 
Receivable Management & Collections, The Office of the Chief Revenue 
Collections Officer, Exhibit 1 at 2 (Aug. 8, 2013); ACA International 
Notice of Ex Parte, CG Docket No. 02-278, at 1 (May 5, 2014).
---------------------------------------------------------------------------
    Nothing in the legislative history suggests that Congress intended 
the TCPA to be used as a shield against communications between a 
creditor and its customers concerning a past due obligation. Indeed, as 
the report of the House Committee on Energy and Commerce clearly 
states:

        The restriction on calls to emergency lines, pagers, and the 
        like does not apply when the called party has provided the 
        telephone number of such a line to the caller for use in normal 
        business communications. The Committee does not intend for this 
        restriction to be a barrier to the normal, expected or desired 
        communications between businesses and their customers. For 
        example, a retailer, insurer, banker or other creditor would 
        not be prohibited from using an automatic dialer recorded 
        message player to advise a customer (at the telephone number 
        provided by the customer) that an ordered product had arrived, 
        a service was scheduled or performed, or a bill had not been 
        paid.\59\
---------------------------------------------------------------------------
    \59\ H.R. Rep. 102-317 (Nov. 15, 1991) (emphasis added).

    Fundamentally, congressional recognition of TCPA privacy rights 
applicable to mobile telephone customers was intended to provide choice 
of contact, not isolation from contact. Those who elect to conduct 
telecommunications solely by cell phone, or who choose to identify 
mobile telephone numbers as their preferred method of contact in 
dealing with service providers, have exercised the privacy choice 
protected by the TCPA. It is not good policy to make that choice more 
burdensome and less efficient.
    To conclude otherwise would significantly harm both private and 
public debt collection programs, further straining our distressed 
economy. Indeed, the White House has over the last four years 
consistently emphasized the importance of contacting debtors 
specifically ``via their cell phones'' in connection with the 
collection of debt owed to or granted by the United States.\60\ This 
Congress agreed when it exempted such calls from the TCPA.\61\
---------------------------------------------------------------------------
    \60\ The Office of Management and Budget, Budget of the United 
States Government, Fiscal Year 2013, at 232 (2012), available at 
https://www.whitehouse.gov/sites/default/files/omb/budget
/fy2013/assets/budget.pdf; The Office of Management and Budget, 
Analytical Perspectives, Budget of the United States Government, Fiscal 
Year 2013, at 168 (2012), available at https://www.whitehouse.gov/
sites/default/files/omb/budget/fy2013/assets/spec.pdf; The Office of 
Management and Budget, Budget of the United States Government, Fiscal 
Year 2016, at 116 (Feb. 2, 2015), available at https://
www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/
budget.pdf; The Office of Management and Budget, Analytical 
Perspectives, Budget of the United States Government, Fiscal Year 2016, 
at 127-28 (2015), available at https://www.whitehouse.gov/sites/
default/files/omb/budget/fy2016/assets/spec.pdf.
    \61\ Bipartisan Budget Act of 2015 Sec. 301; 47 U.S.C. 
Sec. 227(b)(1)(A)(iii). However, the FCC has proposed rules that would 
appear to thwart this Congress' intent in creating an exemption for 
Federal debt calls, by limiting the number of calls that can be placed 
to delinquent or defaulting account holders to three calls per month--
regardless of whether or not the call results in a conversation with 
the borrower. Three calls per month is not sufficient to (1) have a 
live conversation with a borrower; (2) discuss available repayment, 
forbearance and deferment options with the borrower; and (3) enroll the 
borrower in the right plan based on the borrower's circumstances. See, 
e.g., Statement of Commissioner Michael O'Rielly Dissenting in Part and 
Approving in Part, Rules and Regulations Implementing the Telephone 
Consumer Protection Act of 1991, CG Docket No. 02-278, Notice of 
Proposed Rulemaking, FCC 16-57, at 2 (May 6, 2016).
---------------------------------------------------------------------------
    The same principle--that a call to a cell phone is beneficial in 
helping borrowers resolve delinquencies--applies with equal force to 
state and local governments, and businesses large and small. This is 
supported by findings of the Federal Government and loan servicers. The 
U.S. Department of Education stated in a 2015 report that when 
``servicers are able to contact a borrower, they have a much better 
chance at helping that borrower resolve a delinquency or default.'' 
\62\ For example, there are Income Driven Repayment (IDR) plans 
available to qualifying borrowers under which monthly payments may be 
as low as $0, and qualifying borrowers may have remaining balances 
forgiven after 20-25 years. The U.S. Department of Education endorsed 
allowing servicers to use modern technology to contact borrowers to 
help educate them about this and other repayment options and avoiding 
default.
---------------------------------------------------------------------------
    \62\ U.S. Dep't of Education, Strengthening the Student Loan System 
to Better Protect All Borrowers, at 16 (Oct. 1, 2015), available at 
http://www2.ed.gov/documents/press-releases/strength
ening-student-loan-system.pdf.
---------------------------------------------------------------------------
    One servicer estimates that it is able to help more than 90 percent 
of student loan borrowers avoid default when it has a telephone 
conversation with the borrower; conversely, 90 percent of student loan 
borrowers who have not had a telephone conversation with the servicer 
default.\63\ And Federal Student Aid--an office of the U.S. Department 
of Education--estimates that 93 percent of persons in default ``were 
not successfully contacted by telephone during the 360 day collection 
effort.'' \64\
---------------------------------------------------------------------------
    \63\ Navient Corp. Notice of Ex Parte, CG Docket No. 02-278, at 2 
(Mar. 29, 2016).
    \64\ Cynthia Battle & Eileen Marcy, Late Stage Delinquency 
Assistance, Federal Student Aid, at 7 (last visited May 16, 2016), 
available at https://www.ifap.ed.gov/presentations/attach
ments/06FSAConfSession41.ppt.
---------------------------------------------------------------------------
    Moreover, there is in place substantial oversight of the operating 
practices of financial service companies, including their interactions 
with consumers, through Federal laws such as the Fair Debt Collection 
Practices Act (FDCPA), the Dodd-Frank Act prohibition against Unfair, 
Deceptive and Abusive Acts and Practices, the Fair Credit Reporting 
Act, section 5 of the Federal Trade Commission Act, the Gramm Leach 
Bliley Act, the Truth in Lending Act, the Fair Credit and Charge Card 
Disclosure Act, the Federal Bankruptcy Code, and the Real Estate 
Settlement Procedures Act, and through oversight from a number of 
different Federal entities including the Federal Reserve, Federal Trade 
Commission, FDIC, Office of the Comptroller of the Currency, and the 
CFPB.\65\ Additionally, the FDCPA explicitly outlines how a consumer 
can end any communications with a debt collector.\66\
---------------------------------------------------------------------------
    \65\ See 15 U.S.C. Sec. 1692 et seq.; Pub. L. 111-203; 15 U.S.C. 
Sec. 1681 et seq.; 15 U.S.C. Sec. 45 et seq.; Pub L. 106-102; 15 U.S.C. 
Sec. 1601 et seq.; 15 U.S.C. Sec. 1637(c); Title 11 of the U.S.C.; 12 
U.S.C. Sec. 2601 et seq. There are also numerous state laws in place 
providing oversight and constraint. Approximately 35 states have laws 
or requirements specific to debt collection communications. Examples: 
Cal. Civ. Code Sec. 1812.700 (special text requirement); Iowa Code Ann. 
Sec. 537.7103(3)(a)(6) (call frequency); Me. Rev. Stat. Ann. tit. 32 
Sec. 11013(3)(C) (postdated checks); Minn. Stat. Sec. 332.37(13) 
(prerecorded messages); W. Va. Code Ann. Sec. 46A-2-125(d) (call 
frequency). Approximately 40 states have laws specific to licensing.
    \66\ 15 U.S.C. Sec. Sec. 805(c), 1692c.
---------------------------------------------------------------------------
    It is also important to recognize that when Congress enacted the 
Dodd-Frank Act, it expressly assigned the regulation of debt collection 
to the CFPB. It granted the Bureau rulemaking authority for the FDCPA, 
which was designed to protect consumers when communicating with debt 
collectors and to provide remedies for abusive collection 
practices.\67\ Significantly, the CFPB has announced its intention to 
initiate a rulemaking process to update and modernize the FDPCA and to 
promulgate comprehensive rules to govern the debt collection industry, 
covering first-party creditors (i.e., financial institutions collecting 
debt owed to them) under its Dodd-Frank Act authority to prevent 
unfair, deceptive or abusive practices, and third-party collectors 
under the FDCPA.\68\
---------------------------------------------------------------------------
    \67\ See 15 U.S.C. Sec. 1692l(d).
    \68\ See Consumer Financial Protection Bureau, Fall 2015 Regulatory 
Agenda submitted by the Consumer Financial Protection Bureau to the 
Office of Management and Budget (Nov. 20, 2015), available at http://
www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_
AGENCY_RULE_LIST&currentPub=true&agencyCode=&showStage=active&agencyCd=3
170.
---------------------------------------------------------------------------
    Consistent with this mandate, the CFPB has been actively pursuing 
abusive debt collection practices and expects to release a debt 
collection proposed rule this year. In the CFPB's fifth annual Fair 
Debt Collection Practices Act Report, CFPB Director Cordray indicated 
that ``[i]n 2015 such actions by the CFPB returned $360 million to 
consumers wronged by unlawful debt collection practices and collected 
over $79 million in fines. During this time period, our colleagues at 
the Federal Trade Commission (FTC) banned 30 companies and individuals 
that engaged in serious and repeated violations of the law from ever 
again working in debt collection.'' \69\ Further, the CFPB has 
resources on its website informing consumers of their rights against 
debt collectors, including explaining the laws mandating what debt 
collectors can or cannot do,\70\ what is harassment by a debt 
collector,\71\ and how many times a debt collector may call a 
consumer.\72\
---------------------------------------------------------------------------
    \69\ CFPB, Fair Debt Collection Practices Act, CFPB Annual Report 
2016, at 2 (Mar. 2016), available at http://files.consumerfinance.gov/
f/201603_cfpb-fair-debt-collection-practices-act
.pdf.
    \70\ CFPB, Are there laws that limit what debt collectors can say 
or do? (last visited May 16, 2016), available at http://
www.consumerfinance.gov/askcfpb/329/are-there-laws-that-limit-what-
debt-collectors-can-say-or-do.html.
    \71\ CFPB, What is harassment by a debt collector? (last visited 
May 16, 2016), available at http://www.consumerfinance.gov/askcfpb/336/
what-is-harassment-by-a-debt-collector.html.
    \72\ CFPB, Is there a limit to how many times a debt collector can 
call me? (last visited May 16, 2016), available at http://
www.consumerfinance.gov/askcfpb/1397/there-limit-how-many-times-debt-
collector-can-call-me.html.
---------------------------------------------------------------------------
Correcting the Imbalance
    I appreciate that the Commerce Committee wants to understand how 
the TCPA, enacted in 1991, is impacting consumers and businesses today. 
The current TCPA litigation environment, combined with the FCC's recent 
interpretations, is punitive to compliance-minded businesses, 
governmental entities, and non-profits that want to engage in normal, 
expected or desired communications with consumers. The environment is 
also detrimental to consumers, who expect to communicate via their cell 
phones and through texts, and who find it convenient and beneficial to 
do so. In today's environment, a compliance-minded caller or sender of 
text messages can have obtained the prior express consent that Congress 
established would protect a caller from TCPA liability, can be using 
modern technology that is not an ATDS under the statutory definition, 
and can still be subjected to potentially ruinous liability for every 
single call or text. This is fundamentally unfair to any entity making 
calls or sending texts, and is fundamentally unfair to consumers--who 
are increasingly paying the societal costs of abusive lawsuits. When 
Congress enacted the TCPA 25 years ago, it sought to implement a 
careful balance between protecting beneficial, normal, expected or 
desired communications and protecting public safety entities and 
consumers from abusive practices. That balance must be restored.
    Mandate a Reassigned Number Database: One idea moving forward would 
be to establish a telephone number subscriber database that would 
require the participation of all carriers, and timely updates by the 
carriers to the database. The database would link each telephone 
subscriber--and to the extent possible any persons on that subscriber's 
family or business plan--with their telephone number. Callers or those 
sending text messages could check against the database to determine 
whether a number for which they have been given consent to call or text 
now belongs to a different subscriber. A TCPA safe harbor should be 
provided for callers who check the database for confirmation that the 
number that they have been provided consent to call or text has not 
been reassigned.
    Privacy concerns could be avoided by allowing a calling party to 
check against the database only to see whether (and if so, when) a 
number has been reassigned to a different subscriber--but not provide 
the identity of the subscriber. There is no doubt that any combined 
database of 80+ carriers would take significant time, effort, and 
resources. If this could be accomplished, the benefits would be 
tremendous. Compliance-minded callers and texters who have obtained 
prior express consent could rely on that consent, as Congress intended. 
Those callers or texters would not be placed in the impossible 
situation of risking TCPA liability for each and every call or text 
based on a factor over which they have zero control--knowledge of a 
reassignment. Consumers would be less likely to receive calls or texts 
based on a reassigned number, and would be less likely to miss 
important, beneficial or desirable communications that they provided 
consent to receive.
    Prior Express Consent is Not Meaningless: Another, more simple 
option may be for Congress to confirm that when it provided a statutory 
defense for ``prior express consent of the called party,'' it did not 
intend for that defense to be meaningless. Congress intended that when 
a caller received prior express consent, it could rely on that consent 
until a caller had actual knowledge that consent has been withdrawn 
(including through a reassignment).
    ATDS Definition is Not Meaningless: Another option may be for 
Congress to explicitly confirm that when it provided a narrow, specific 
and precise statutory definition of an ``automatic telephone dialing 
system,'' it did not intend to broadly sweep into the definition any 
and every software system or device that ``theoretically'' could be 
modified at some hypothetical future point in the future to ``store or 
produce numbers to be called, using a random or sequential number 
generator, and to dial such numbers.''
    Restore the Balance: Congress should confirm that when it enacted 
the TCPA it did not intend for it to become a ``litigation trap'' where 
compliance-minded callers are put at untenable risk for engaging in 
beneficial, normal, expected or desired communications, and where 
consumers are also suffering the consequences. Congress should consider 
taking steps to restore the balance that it intended when it enacted 
the TCPA.

    The Chairman. Thank you, Ms. Desai.
    Let's start with 5-minute rounds of questions.
    I'll start with Ms. Wahlquist. As you know, the FCC's 
concluded that, and I quote, ``Service outages and 
interruptions in the supply of water, gas, or electricity 
could, in many instances, pose significant risk to public 
health and safety, and the use of prerecorded message calls 
could speed the dissemination of information regarding service 
interruptions or other potentially hazardous conditions to the 
public.'' Nonetheless, and despite receiving prior consent, a 
number of utilities have faced expensive litigation and 
potentially ruinous judgments for making just such calls.
    Do you agree that the Commission's action on the Edison 
Electric Institutes and the American Gas Association's petition 
for declaratory ruling filed with the Commission over a year 
ago would help utilities avoid meritless but oftentimes costly 
litigation for these notices? And do you think that that ruling 
is long overdue?
    Ms. Wahlquist. I would agree that it would be helpful to 
the electric companies to have that ruling. I agree that it is 
overdue. I am concerned, though, that it's--would just be one 
more exception that the FCC would add into the checkbox of, 
``Here's a few kinds of calls we think are OK.'' And in the 
2015 order, they listed a few. And this would just add a few 
more. OK? So, the electric companies can now say something 
about outage. And the problem is, there are all of these other 
calls that consumers would want, that they've signed up for, 
that they've requested, they've asked, that businesses are 
afraid to make, or, if they're making, they're getting sued 
under the TCPA. So, I think that the FCC does need to rule on 
that order. And I don't know why it wasn't in the earlier 
ruling.
    Clearly, people need to know if there are power outages. I 
believe one of the petitions pointed out that people may have 
medical equipment at home that relies on power, and we need to 
be able to alert them to an outage. So, it--I think that should 
be ruled on. But, I think there needs to be a much bigger look 
across the board at calls that are legitimate calls that are 
generating lawsuits.
    The Chairman. Ms. Desai, at a recent field hearing, CFPB 
Director Cordray said, and I quote, ``Let me also take a moment 
to acknowledge another positive development, which is the 
decision some banks and credit unions have made to provide 
consumers with real time information about the funds in their 
accounts available to be spent. They are doing this through 
text and e-mail alerts, which can reduce the risks that 
consumers inadvertently overspend their accounts.''
    How can banks, credit unions, and other financial 
institutions increase communications with their consumers if 
they have the threat of TCPA litigation hanging over their 
heads?
    Ms. Desai. Well, thank you, Chairman Thune. You raise a 
very important point. There are all types of time-sensitive 
consumer-beneficial communications, such as the example you 
raised, available funds to reduce the risk of overspending, but 
also high-purchase alerts, low-balance alerts. And these types 
of time-sensitive communications are only possible through 
modern technology. These communications can't be made through a 
rotary phone.
    And this is the heart of the challenge, not only for my 
financial institution clients, but, frankly, all of my clients 
who engage in communications with consumers and with their 
customers. They are paying a significant cost for the 
additional risk that any time-sensitive communication they make 
runs the risk of being sent to a reassigned number, and that is 
a factor that they cannot fully control. As a result, many of 
my clients are choosing to decrease beneficial elective 
communications through cell phone or text because they know 
that every single one of these communications does carry that 
additional risk.
    The Chairman. Mr. Lovich, you stated that, ``The practical 
impact of TCPA restrictions on the care provider community is 
devastating.'' I'm wondering if you could sort of elaborate on 
what that--devoting so many resources to TCPA compliance means 
for patient care.
    Mr. Lovich. Thank you, Chairman. I think that's probably 
the most important question that I could be asked today, 
because it does impact upon patient care, which is obviously 
the most important aspect of providing healthcare.
    As any other enterprise, a hospital has to make economic 
decisions when they are dealing with a finite pot of resources. 
If resources have to be dedicated to an administrative action, 
such as dealing with the TCPA, that requires decisions to be 
made with regard to staffing. If that impacts, for example, the 
number of nurse to--nurses that are there to treat patients, it 
reduces the direct interaction between the nurses and the 
patient, the delivery of direct follow up instructions, other 
instructions with regard to the patient care.
    There have been studies done by the Department of Health 
and Human Services. The Agency for Healthcare Research and 
Quality has found that the reduction in nursing staffing has a 
direct relationship to negative patient outcomes with regard to 
the treatment of their conditions.
    So, the more resources that have to be dedicated to the 
non-use of up-to-date technology calls from that pool of talent 
that is not being directed to patient care. And I don't think 
that's something that we want to do as a Nation.
    The Chairman. My time's expired. I've got some other 
questions, but I'll hand it off to Senator Nelson.
    Senator Nelson. Mr. Chairman, I'm going to defer my 
questions until later, but I just want to introduce a thought. 
The law says that it's illegal, robocalls on cell phones. And 
yet, our consumers receive millions of those robocalls on cell 
phones. Can you imagine if we made it legal, what would happen?
    I'm going to defer and let our members ask their questions 
first.
    The Chairman. Next up is Senator Blunt.
    Oh, well, I'm sorry, if you--that's right. We'll keep it 
even. I have Blumenthal, not here. Senator McCaskill would be 
up.

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. So, this is not that complicated. All 
you have to have is the permission of the person you're 
calling, and call them. I mean, you guys make this sound like 
this is an impossible thing to do. I mean, Mr. Lovich, you have 
somebody who leaves your hospital, and you guys can't manage to 
get their permission to follow up with them by phone and call 
them? Why is that so economically difficult for you?
    Mr. Lovich. Thank you, Senator. The problem is, as my 
colleague, Ms. Wahlquist, had indicated in her testimony--is 
that the plaintiffs' bar has taken the opportunity to twist the 
language with regard to the use of consent, and has chosen to 
sue most of the members of my association with regard to the 
inexactitude of the language involved in the consent process. 
Typically, consent is obtained through the conditions of 
admission when someone is admitted to the hospital. That's a 
written document that's signed by the patient. That language is 
then torn apart by some of my brethren----
    Senator McCaskill. Why don't you just do a simple--when 
someone checks out of a hospital, why don't you just present 
them a simple card and said, ``Do you mind if we call you on 
follow up?'' and have them sign that? I don't think lawyers 
would have much luck with that in front of a jury. And if you 
guys are settling those cases, shame on you. Take them to trial 
and kick them in the rear in the courtroom. That's what you do.
    You guys need to understand this. This is the biggest 
consumer problem in the country. No bigger problem. And some of 
these witnesses--you all are in here whining about these poor 
businesses, and consumers really want these. They don't want 
them, Ms. Wahlquist. They don't want them. And when somebody 
has a reassigned number, you need to call them 40 times to 
figure out it's a reassigned number? That was your testimony. 
What about mail? Can you drop them a note in the mail and 
figure out that they have a different phone number?
    Ms. Wahlquist. Yes, Senator. The problem is that not all 
the numbers are reassigned. There are numbers that are wrongly 
provided from the start. And if it was just that one number, it 
wouldn't be the issue. The issue is that, as long as there's 
one number, then a class-action is brought. You have a class-
action, there was no statute of limitations put into the TCPA 
when it was drafted. So, then suddenly all phone calls made by 
that company for 4 years are put at issue. And that's what 
makes it not simple.
    Senator McCaskill. Let me ask you, Mr. Zoeller. Have the 
complaints gone down or up on robocalls in the last several 
years?
    Mr. Zoeller. They've gone up every year in our office, and 
we're on track to set all new records yet this year.
    Senator McCaskill. So, you would think that, if in fact 
these lawsuits were really damaging the cost of doing business 
in this country, you would see the opposite impact, wouldn't 
you, Attorney General?
    Mr. Zoeller. Well, you know, I think the massive amounts of 
phone calls are not from people being represented here, so the 
problem we have are the bulk calls that come from overseas, 
where none of us have the ability, other than--I guess I'll 
throw the FCC under the bus--that they're the only ones who can 
really regulate those huge, massive calls that originate 
outside of our jurisdiction. So, without any enforcement 
ability, those are the ones that really are, let's say, well 
over half of the complaints we get.
    Senator McCaskill. Although, I will tell you--I know you 
work with my Attorney General, Chris Coster, closely--in the 
last few months, he's brought against an insurance company, a 
lawn-care service, a home security company, a duct-cleaning 
service, and a charity for violating the Missouri law. Now, I 
don't hear tones of international in any of that list. So, this 
is a real problem.
    And, by the way, Ms. Wahlquist, I would just suggest this. 
I know that the carriers are all members of the Chamber. We 
know, from hearings we've had in this committee, that the 
technology is available that the carriers could adopt. And it 
has been clarified by the FCC that there is no duty to connect 
calls that prohibits them from adopting this technology. They 
can adopt technology and make it available to consumers that 
allows consumers to opt out without having to take these calls. 
And what we're really trying to do here--we're not trying to 
punish people with litigation. We're trying to put power in the 
hands of the consumer. And this may not be the most artful way 
to do it, but I will just speak for me, and I think probably 
for a whole lot of people who run for office that hang out 
around here, if you think I'm backing up on going after people 
who make robocalls, in light of what I encounter every day from 
people I meet, including my own family--I mean, my son can't 
get two companies to quit calling him on his cell phone. He 
finally handed the phone to me. You know, and I said, ``I'm a 
U.S. Senator. I'm going to sue you.'' Guess what? They called 
him 15 minutes later.
    Ms. Wahlquist. Your Honor, I think that those are really 
the bad actors that need to be targeted, that have been getting 
targeted, and continue--would have liability under whatever 
modification you're doing to the TCPA, because I'm not saying 
that, when somebody receives notice, ``This is a wrong 
number,'' and they receive it in a reasonable way, where they 
know, they should have a little bit of chance to implement that 
knowledge, and the calls should stop. And if they haven't, 
then----
    Senator McCaskill. But, they don't. Ask Ms. Saunders. They 
don't stop.
    Ms. Wahlquist. The--she has some examples of ones that 
didn't. I have processes and procedures in place with most of 
my clients, where this is--it works for 99 percent of the time, 
but you have human error, you have something that doesn't 
happen. You might have a vendor that hasn't been following the 
company's procedures and policies and didn't record the Do Not 
Call. And companies don't want to call the people that aren't 
their clients. We're trying to call our customers to convey 
information to those customers. There's no desire to continue 
to call someone who's not a customer with this information.
    Senator McCaskill. Doesn't feel like that on the receiving 
end. It doesn't feel like that. I'm just telling you. That's 
not the perception consumers have.
    Thank you, Mr. Chairman.
    The Chairman. All right.
    We'll go to the other half of the Missouri duo here.
    Senator Blunt. Exactly.
    The Chairman. Senator Blunt.

                 STATEMENT OF HON. ROY BLUNT, 
                   U.S. SENATOR FROM MISSOURI

    Senator Blunt. Well, thank you, Chairman.
    What I think Attorney General Zoeller said was that half of 
the robocalls come from out of the country. What could we do 
about that?
    Mr. Zoeller. Senator, I--that's a great question. And 
again, between, you know, addressing this with the FCC, which 
has the regulatory authority, and the carriers, which I'll 
agree with the Senator, your colleague, that they do have some 
ability. They've pointed to one another for years. So, up until 
recently, I've always been critical of the FCC and their 
failure to regulate. The carriers have always said, ``We're 
nervous about whether we have the ability to use the 
technology.'' Now that they've passed the rule, which we've 
long asked for, the ball is back to the carriers to say, ``Why 
aren't you using the technology that's currently available to 
block some of these''--and we're not talking about any of the 
types of calls that you're hearing about. These are the massive 
calls that literally call everybody in a--in an area code. So, 
when I get the complaint, I literally tell people, ``Don't feel 
too special, because they called 9,999 other people that same 
minute.'' So, it's only the FCC and the carriers. Somewhere in 
that finger-pointing is the answer to your question.
    Senator Blunt. Well, it seems to me that one of the things 
you said is exactly the crust of what we are talking about 
here. We're talking about two different problems. We're talking 
about massive robocalls, half of them, based on your 
information, from outside the country. Then the other thing is 
people legitimately trying to contact someone whose number they 
either no longer have or never had given to them in the correct 
way. Surely, there's some way we can separate this discussion 
to where we deal with these problems in the way they ought to 
be dealt with.
    You know, Ms. Desai, I've heard that some banks, for 
instance, no longer even try to notify on what they would see 
as a routine problem that I'd like to be notified of, such as 
some activity in my account that doesn't seem to make sense, 
but they don't notify me, because they think they might be 
calling a number that they're not sure of? Is that a real 
problem?
    Ms. Desai. Yes. And the American Bankers Association 
actually submitted a filing on exactly that issue. I mean, it 
is a problem. And, you know, it--we--I wish it was as easy as 
just simply getting consent. But, once you have consent, you 
have to be able to rely on that consent. And the problem with 
TCPA liability, the way it has been interpreted, is that you 
cannot any longer rely on that consent, because there's no way 
of knowing if a number has been reassigned. And that's why 
there are increasing numbers of banks and other institutions 
that are afraid to make routine calls or send routine messages.
    Senator Blunt. Does anybody on the panel know? How long 
does it take to reassign a number? If I give up my cell phone 
number, is there a definite period that that can't be available 
to anybody else? Or how long does is it take before somebody 
else is answering the number I used to have that I gave the 
hospital or I gave the bank or I gave the college--how long 
might it be before somebody else has that number?
    Ms. Wahlquist. Senator, it depends on the provider of the 
cell phone number. I think it can be as short as 30 days. Some 
providers wait 6 months before reassignment. It's just kind of 
a hodgepodge. And part of the problem also is, the business 
doesn't know who the cell phone provider is on any given 
number. You wouldn't know the timeframe in which it's switching 
out.
    Senator Blunt. Well, say we had a rule that you couldn't do 
it any quicker than 6 months. Anybody that got my cell phone 
number earlier than 6 months wouldn't have any certainty that 
it was still my number. Is that right? Until they called it. 
Ms. Saunders, does that sound right to you?
    Ms. Saunders. Yes, sir. But, I think the cell phone 
companies may not agree to wait 6 months, because some cell 
phone companies have a smaller batch of numbers that they're 
going to want to recirculate. But, I--if I might----
    Senator Blunt. You might.
    Ms. Saunders.--I think that several of us agree on this 
panel that one way of dealing with the calls to reassigned 
numbers is for there to be a mandatory database that all cell 
phone companies participate in that would allow callers to 
access and ask, ``When was the last time this particular phone 
number was transferred?'' And once that answer is provided, the 
caller would know whether or not they had valid consent. And 
the problem with the situation now is, apparently there are no 
full databases that are--that include all the cell phone 
companies. So, I think several of us on different sides of this 
issue have all been encouraging both the cell phone companies 
and the FCC to either voluntarily do this or mandate it. But, 
that would solve a lot of the litigation against the wrong--
about the wrong-number calls.
    Senator Blunt. It just seems to me, Mr. Chairman, that 
we've got two very different problems here. One, it's really 
easy to be outraged about. And in the Missouri delegation, 
Senator McCaskill usually deals with the outrage better than I 
do. And I appreciate that. And I like to see that happen.
    Senator McCaskill. It's called good cop, bad cop.
    Senator Blunt. Well, maybe so. And the other one is a 
problem that we're all very sympathetic to. If we could figure 
out how to divide this discussion into those two categories, 
we're much more likely to find a solution to both problems than 
not. And I hope we can figure out how to do that.
    The Chairman. Thank you, Senator Blunt. And that suggestion 
is one we may want to explore and take a look at if everybody 
sort of agreed that that would make sense. I know, definitely 
in the Missouri delegation, if I have to call somebody, I'm 
going to call the good cop.
    [Laughter.]
    The Chairman. Somebody doesn't like unsolicited phone 
calls.
    I have up next--Senator Klobuchar and then Senator Daines.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. OK, very good. Thank you very much. 
Thank you, Mr. Chairman, and thank you, Senator Nelson, for 
your leadership on this, as well as Senator Markey and many 
others.
    So, I'm a cosponsor of the HANGUP Act to repeal a provision 
from the Bipartisan Budget Act of 2015 allowing robocalls to 
cell phones for the collection of debt owed to the government.
    Ms. Saunders, in your testimony, you estimate that this 
provision would impact 61 million people. You also point out 
that, in many cases, debt collectors do not have accurate 
information about who owes the debt.
    Mr. Zoeller, you testified that 90 percent of the debt-
collection complaints your office received last year were 
because the caller was harassing the wrong person.
    In both of your opinions, how significantly does the 
provision undermine existing robocalling protections? Because I 
can tell you, when--we just did the senior tour around 
Minnesota, our staff and in my own experiences meeting with 
people, robocalls are still one of the number one things that 
they list as something that they're very angry about. They get 
sucked into things they don't want to. And, well, you know all 
about it.
    So, Ms. Saunders?
    Ms. Saunders. We think this--the provision is very 
dangerous. One of the concerns--one of the many concerns that I 
have heard is that the FTC and other government agencies, such 
as Attorney General Zoeller's, tell people not to answer any 
robocalls. The FTC has said publicly, repeatedly, ``The IRS 
won't call you.'' But, now, because the IRS can hire debt 
collectors and because the IRS debt collectors can robocall 
without consent, that advice from the FTC is no longer 
available. And yet, how do people who are receiving the scam 
calls know the difference? And so, I can go on, but I--the 
problem is----
    Senator Klobuchar. Right.
    Ms. Saunders.--tremendous, and it is not a good resolution 
to allow consumers who owe money to be called more.
    Senator Klobuchar. Yes.
    Attorney General Zoeller?
    Mr. Zoeller. You know, and I'll add to that. My earlier 
focus about--you know, in carving out the exception, we may 
well have lost the ability to defend the TCPA as a 
constitutional matter, because, again, in our experience, going 
up through the--Indiana and then the 7th Circuit Court of 
Appeals, it was because we did not distinguish between the 
types of calls being prohibited that it was neutral. Once 
you've started to carve this out--and I think it's--it almost 
goes back to the point about looking at these things 
differently. The very different part about creating a better 
defense, we're not against defending, and I think it would go a 
long way to eliminate some of the--let's say, the frivolous 
litigation. And I'm not here to defend the trial bar. But, I 
think, to create a better defense, as opposed to an exception--
once you've got these exceptions, our ability to defend these 
statutes really is compromised. So----
    Senator Klobuchar. And you point to a rise in the phone 
scams involving government impersonation. And I know that often 
these scams involve someone spoofing to try to fool a victim 
into thinking they're someone calling from the government. And 
if we don't pass this HANGUP Act, or some kind of strong 
antispoofing legislation, do you think you would see more of 
this going on?
    Mr. Zoeller. Well, I got a little bit numb to it until they 
started to spoof using Office of the Indiana Attorney General.
    Senator Klobuchar. Well, there you go.
    Mr. Zoeller. So, I'll stand as outraged.
    Senator Klobuchar. OK. That's pretty bad. So, you've 
actually had people use your own office name? And what were 
they calling to say that they wanted to do?
    Mr. Zoeller. Well, there were a number of issues. But, 
again, the fact that I was constantly telling people, you know, 
to be careful of this--the spoofing, and that you can't really 
rely on it. They can put any number up there. OK, it's another 
violation of the law. But, by the time they were using mine, it 
was because we were so public about, ``Of course, you can trust 
the Office of the Attorney General.'' So, what little 
credibility my office tries to maintain and trust----
    Senator Klobuchar. Yes.
    Mr. Zoeller.--was being used against us.
    Senator Klobuchar. Exactly.
    It has been 13 years now since the Do Not Call Registry was 
started. While there are more than 222 million numbers 
registered, it shows that the public is incredibly supportive 
of this concept. There are also more complaints than ever. 
Robocalls and text spamming have proliferated due to advanced 
technologies, which were discussed here earlier. Again, to both 
of you, we know that more needs to be done to protect consumers 
from fraudsters and robocalls. What, in your opinion, are the 
most significant limitations of the Do Not Call Program in 
addressing the current robocalling problem?
    Ms. Saunders. I think we've mentioned it here, and it's the 
spoofing problem. And while I very much appreciate Senator 
Nelson's bill on antispoofing, we really think that the law 
needs to be much more heavy-handed and require that the cell 
phone--that all of the phone companies adopt antispoofing 
technology. I find it very hard to believe, in this day and 
age, with the advanced----
    Senator Klobuchar. When the technology is out there.
    Ms. Saunders. The technology----
    Senator Klobuchar. So, you would pass Senator Nelson's bill 
and then also add in this?
    Ms. Saunders. Yes. Yes, ma'am.
    Senator Klobuchar. All right.
    Attorney General?
    Mr. Zoeller. Well, while we're doing that, you know, the 
idea of having some ability to stop all the illegal ones that 
are being done from overseas, I think that's something that, 
you know, technology has gotten us into this problem, and we 
really need to focus on how can it get out. So, when the FCC 
passed their recent regulation, I know the carriers were 
concerned that they were going to require the use of the 
technology to block the overseas calls. When that wasn't in 
there, I know they all had a sigh of relieve. But, quite 
frankly, we were all hoping that it would be in there.
    Senator Klobuchar. Got it. And I'm not going to do anything 
more. I'm over my time. But, as you know, I've been doing a lot 
on the call-completion issue and dropped calls. And so, I'll 
put something on the record on that. We're hoping to have a 
markup soon.
    Thank you.
    The Chairman. OK, we're going to--Senator Daines, then 
Senator Blumenthal.

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you, Mr. Chairman.
    I brought along a phone from 1992. The size of it is only 
exceeded by its weight. It would make a good boat anchor. And 
this is 25 years old, and it is approximately the same time 
TCPA was enacted. We can see how far technology has come from 
this device to what I have in my hand, my iPhone 6, that's 
reduced the need for a lot of phone calls because of the power 
of the knowledge here, where I can make an airline reservation, 
I can do my online banking, I can SnapChat Cory Booker. I can 
do a lot of things here on my iPhone 6.
    But, as we've heard today, now 25 years later, unwanted 
phone calls are still among the top consumer complaints. And 
even when consumers do file lawsuits for violations, it seems 
like the trial lawyers are the only ones that truly benefit. In 
fact, I've heard the TCPA has even been referred to the ``Total 
Cash for Plaintiffs Attorneys.''
    Ms. Wahlquist, consumers are still receiving unwanted 
calls. In your testimony, in fact, you said the average payout 
to the trial lawyers on a case in 2014--I believe it was $2.4 
million, while the consumer average payout was $4.12. Is the 
TCPA really helping consumers today?
    Ms. Wahlquist. Senator, I just really don't think that it 
is. The abuses that are happening on the litigation side mean 
that it's really become a lawyer-driven statute, when we have 
the suits for it. And it--the kinds of calls that are driving 
everyone crazy--and I get them, too--the spoofed calls and--
that's not what is getting--nobody would sue for that. There's 
no money, there's no pocket at the end of it.
    So, for example, I have a restaurant client that had an 
opt-in put on their menu, ``If you want to get our coupons, you 
know, on a weekly basis, text us this and we'll start sending 
them to you.'' And this purely opt-in thing that a lot of young 
people joined up for and were doing, one text message that was 
sent, that one plaintiff's lawyer brought a suit on, and 
suddenly my client is facing $32 million in statutory damages 
for that single text message that went to the club, and stopped 
the club. Nobody's getting the coupons anymore. And this kind 
of thing doesn't benefit consumers. Now nobody's getting their 
coupons.
    Senator Daines. In a state like Montana, we have a lot of 
small businesses. They're not trying to call their customers to 
sell them products they don't need. They're not inundating them 
with texts and faxes. But, they are trying to reach their 
customers to remind them of appointments or alert them to a 
potential service disruption.
    Ms. Desai, is it reasonable to ask small businesses to 
comply with the 2015 TCPA order?
    Ms. Desai. I think the interpretations provided by the FCC 
in 2015 were particularly damaging for small businesses. They 
shouldn't have to check a database to see if the number that 
they were provided by their own customer has suddenly been 
reassigned. They probably can't afford to do so. And if they 
did, it wouldn't give them an accurate answer anyway.
    I think it's expensive for a small business to have to turn 
to manual dialing in order to reach their customers.
    Senator Daines. I grew up in a small business. My mom and 
dad run a little construction business. Their compliance 
department would be my mom and dad, versus a large business, 
where a compliance department could be an entire wing of the 
headquarters of a building.
    Ms. Desai. Yes.
    Senator Daines. So, what kinds of compliance costs and 
challenges would these small businesses face?
    Ms. Desai. Well, you know, in order to be completely sure 
that they're using a dialing equipment that won't trigger TCPA 
liability, they'd have to invest in a rotary phone, if they 
could find one. They would have to try to figure out on a 
regular basis, whether the numbers that they've been provided 
consent to call are still accurate.
    I don't have dollar figures for you. I don't know. Even my 
large clients, who have thousands of employees, have a 
difficult time trying to figure out how to manage TCPA risk. I 
can't imagine what a small company would have to do.
    Senator Daines. Mr. Lovich, I want to bring up this issue 
of rural healthcare. Again, a lot of states who serve on this 
committee are from more rural States. And if you've visited 
Montana, hospitals are simply not around every corner. Patients 
really rely on technology to communicate with their doctors. 
Oftentimes, 30, 40, 50, 60 miles away, even further, from a 
hospital. Can you explain how today's application of the TCPA 
impacts patients in rural communities who do not have easy 
access to a clinic?
    Mr. Lovich. Certainly. Thank you, Senator.
    I would think that the impact on a rural community would be 
even more devastating than one in a metropolitan community. The 
interaction between the physician and the patient and the 
healthcare provider is a sacred relationship. And if there 
isn't an ability to, for example, follow up on inpatient care, 
to provide instructions with regard to further care, remind 
people about prescription pickups, remind people about 
appointments, it all would be devastating to the effectiveness 
of the healthcare that's provided.
    One of the things that the healthcare community is trying 
to do is cut down on readmissions. That is a tremendous drain 
on the healthcare system, is when a patient isn't adequately 
treated the first time because of the rush to discharge them. 
With adequate instruction, adequate interaction between the 
caregiver and the patient, readmissions will reduce, and 
therefore the overall cost of healthcare will go down.
    The inability to use the most current technology to pursue 
that end is devastating to the industry and just causes more 
cost and more administrative draining of revenue that, again, 
impacts on patient care, it reduces the availability of the 
caregiver to the patient, and that is the essence of the 
relationship in--with regard to healthcare.
    Senator Daines. Thank you, Mr. Lovich.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Daines.
    And I'd just want to know where the Senator from Montana 
came up with that Vanilla Ice vintage mobile phone there, 
because that's----
    Senator Daines. Mr. Chairman----
    The Chairman. Please tell me you got that in a museum and 
you aren't collecting----
    Senator Daines. We did. And it's heavy enough--I see you 
doing curls in the gym every morning with this thing.
    [Laughter.]
    The Chairman. Thank you, Senator Daines.
    Senator Blumenthal.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thanks, Mr. Chairman.
    If there is a form of consumer complaint that is common and 
passionate among the people of Connecticut, it is unwanted 
calls, whether from telemarketers or local officials or 
politicians. And among those calls, the most aggravating and 
annoying are the robocalls. If we overlook the anger and 
aggravation caused by these calls, we are doing a grave 
disservice to the people of America, and they want stronger 
measures, like the ones that I and Senator Markey have 
proposed, that give consumers, essentially, more control over 
the calls they receive. That's essentially it. Whether it's 
through a private right of action or stronger consumer 
protection from government authorities, there's no question in 
my mind that the present law needs to be updated and upgraded 
to provide better, swifter, stronger protection, because this 
problem is only going to increase.
    Mr. Zoeller, you do now what I used to do for 20 years, and 
a lot of your mandate is consumer protection. Are you finding 
an increase in the number of complaints, as I have received, 
for example, from a 76-year-old woman in Dayville, Connecticut, 
who says to me, ``I'm weary of all the robocalls that I 
receive. Can't the Senate address this issue?''--which seems to 
be noncontroversial, to me. A 76-year-old research scientist. I 
have reams of complaints from people who are upset about these 
calls. Quote, ``Every day, I get unwanted robocalls. Most 
annoying, I have reported these to the No Call List people, but 
nothing is done.'' That's the reason that we have a private 
right of action. Public authorities are doing perhaps less than 
they should. What's your experience?
    Mr. Zoeller. Well, Senator, as a former Attorney General, 
as well as Senators Ayotte and Sullivan, you all kind of 
remember the days where we literally did have some protection. 
And, I think, particularly in Indiana and Missouri, which had 
the strongest of all Do Not Call laws, we literally had quiet 
at home. So, I think, going from the perspective where people 
knew that they could be stopped, they understood that something 
was going right, their government had protected them, to the 
point where now the vast majority have taken out their 
landlines, and when I tell them, ``Believe it not, the U.S. 
Congress is thinking about opening up new exemptions to allow 
robocalling to cell phones,'' they're outraged. So, again, not 
to say that it might diminish the high standing that the 
Congress has held by the public, but you really risk the fear 
that people are going to come here with pitchforks and torches, 
because this is a very passionate--and I've got plenty of those 
same stories. So, you're right on the money.
    Senator Blumenthal. Well, I've heard the verbal pitchforks, 
and worse. And I think you're absolutely right. For a Congress 
that has done so little, to now do something so bad as to 
dilute the consumer protection laws would be absolutely 
outrageous. The calls I get are not normally outraged, but 
incredulous.
    Let me ask Ms. Saunders, What do you think is preventing 
the implementation of call-blocking software by the phone 
companies? Because, again, giving consumers control, empowering 
consumers, is basically the goal of these laws. It's not to 
restrict calls that consumers want. It's to enable consumers to 
stop the calls that they find bothersome, annoying, intrusive, 
invasive, and worse.
    Ms. Saunders. I don't know the answer to that question, 
Senator. I think you'll need to ask the phone companies why 
they won't employ those call-blocking methodologies. I would 
point to the example of what this Congress did 40 years ago, 
when it passed the Consumer Credit Protection Act, putting the 
burden on banks for losses when credit cards--when there were 
credit--when there was credit-card fraud. And, because the 
banks had that burden, the banks have been very vigorous in 
developing antifraud protections, so there are very little 
losses, because the losses that are suffered are then suffered 
by the banks. If the phone companies had the same losses that 
were--resulted from robocalls, especially overseas 
telemarketing spammers, they would be very quick to employ very 
vigorous antispoofing and call--robocall-blocking technologies.
    Senator Blumenthal. Thank you.
    My time has expired. I have many more questions and many 
more comments. I will put them in the record.
    I do believe that the present penalties in the TCPA are 
inadequate as a deterrent for the bad actors and repeated 
violators. And I hope that we can strengthen, not weaken, this 
important Federal measure.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Senator Blumenthal.
    Senator Markey.

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you, Mr. Chairman, very much.
    I enjoy this conversation, because we're kind of in the 
wayback machine, to a certain extent, when Senator Daines holds 
up a cell phone from 1992. Because, when I authored this law in 
1991--I am the author of it--it was because there was an 
epidemic of calls that were going into people's homes. There 
were no laws. And so, people were almost afraid to look at 
their phone at night, because it would just start to ring at 
about 6 o'clock, and it wouldn't stop until 9:30 or 10 o'clock 
at night. So, we had to put a law on the books. I was the 
Chairman of the Telecommunications Committee. It's my law.
    And, to Senator Daines' point about the primitive nature of 
the phone which he had in his hand, I also knew that we were 
putting in 200 megahertz of spectrum so that we could create 
the third, fourth, fifth, and sixth cell phone license in 
America, that we would go digital, and everyone would have one 
in their pocket by the year 1995. So, that's how quickly that 
all changed. So, we were building in--I was building in 
anticipatory consumer protections.
    Now, when people hold this phone in their pocket right now 
and it starts to ring, people say, ``It's probably somebody I 
know. I think I'll take the call on my wireless device. I think 
I'll take it.'' Why? Because the protections in that law in 
1991 are very high for wireless devices. It's probably somebody 
you know. That's what you think. But, when that phone is 
ringing at home at night, even today, that landline phone, 
people look at it, almost terrorized, ``It could be somebody I 
don't know. It could be somebody who's going to harass me. It 
could be somebody that's still calling me the same way they 
were in 1991 or 2001.'' And that's the truth.
    Now, should we change the laws to make it easier to call 
people on these wireless devices? I don't think so. Because 
it's personal. It's on you. How much of an intrusion would that 
be on people, to have that phone going off all day long with 
these robocalls? And, by the way, what happens, of course--
Senator McCaskill was right on the point here--these firms have 
moved overseas, yes. But, who is paying them? People in America 
are paying people in India to be harassing people so they can 
get around the laws. That's what's going on. We should try to 
figure out how to make the laws tougher so that these offshore 
overseas calls are harder to make.
    So, if I can, Ms. Saunders--and perhaps I was influenced by 
the fact that I did work for the National Consumer Law Center 
when I was in law school, so maybe I was infected by this 
philosophy of, ``The consumer should be protected first.'' I 
was there the first year the Consumer Center was established, 
working there as a law student researcher.
    So, can you talk a little bit about this concept of consent 
and whether or not it might be possible, actually, to have the 
information come in by e-mails or the consumer would be able to 
respond by e-mails rather than having the phone be ringing, the 
wireless or home phone? Are there ways of dealing with this 
issue that are much less intrusive on the consumer in our 
country?
    Ms. Saunders?
    Ms. Saunders. Yes, there are. I think the first point 
really needs to be made is that there's not a constitutional 
right to make robocalls. And before the automated systems 
developed, businesses communicated quite well with their 
customers through manual dialed calls or e-mails or, in the 
olden days, snail mail. And I remember getting calls from my 
credit card company, where they--I actually had a person on the 
line who said, ``There's a suspicious activity. Is this your--
really your credit card use?'' And there's no reason that that 
can't be used when the business is not sure about who actually 
has consented and currently owns the phone.
    Senator Markey. Well, let me----
    Ms. Saunders. But----
    Senator Markey.--Ms. Saunders, and you, Attorney General 
Zoeller--we're talking about, last year, a relaxation of the 
laws, in terms of being able to call people who have debts. And 
it's people with student loans. There are 40 million of them in 
America. Now it's easier to harass them by phone. Can you each 
talk about that and what might be better ways, you know, for 
people to be communicated with who have debts in our country?
    Attorney General Zoeller?
    Mr. Zoeller. Well, again, I think, at the beginning, when 
people sign up for debt, you know, to get their opt-in as part 
of the, you know, transaction. And again, I'll agree that we 
could make that defense, so, you know, I'm not here to defend, 
again, the plaintiffs' bar. So, tightening up a better line of 
defense. But, I would point out that it's the exceptions that 
I'm nervous about. And again, when we went up to the 7th 
Circuit, it was clear that, because we had no exceptions, the 
political free speech against personal privacy, two very 
important constitutional rights, and we won, based on the fact 
that it was not limiting free speech. There are plenty of 
opportunities to speak, just not by ringing the phone. So, be 
careful of the difference between that defensive side, which, 
again, we would support bolstering--don't make exceptions 
because you've suddenly picked winners and losers, and the 
courts won't allow that--limitations on free speech.
    Senator Markey. With your indulgence, Mr. Chairman, could I 
ask Ms. Saunders to respond to a little bit----
    Ms. Saunders. The idea that calling a debt--a consumer that 
owes a debt multiple times will assist them in paying back the 
debt is somewhat flawed. I think the record is full of examples 
of both consumers who owe the debt and consumers who don't owe 
the debt being called numerous times, robocalled, which is 
harassing and abusive. It's also not particularly helpful and 
against the--and not--not in furtherance of good public policy 
to bother people into paying a debt.
    Senator Markey. And again, in last year's Budget Act, there 
was a provision snuck in--snuck in--to a must-pass piece of 
legislation that makes it much easier for debt collectors to 
call consumers--students--40 million students who owe student 
loans, and makes it a lot easier for them to do that. And I've 
introduced the HANGUP Act that would just stop that. It's 
absolutely irresponsible.
    And I ask unanimous consent, Mr. Chairman, to add two 
letters to the record, one from 25 attorneys general, led by 
Attorney General Zoeller, who is testifying here today, and one 
from 16 consumer groups who have all written in support of the 
HANGUP Act, so that----
    The Chairman. Without objection, it will be entered into 
the record.
    Senator Markey. And I appreciate that, Mr. Chairman.
    [The information referred to follows:]

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    The Chairman. Thank you.
    Senator Markey. We thank all of you for being here today.
    The Chairman. Thank you, Senator Markey.
    Senator Nelson, anything for the--OK.
    Let me just ask one last question. And again, this kind of 
gets at the point of other regulatory bodies. And, Ms. Desai, 
you, I think, indicated that some don't have the same view as 
the FCC when it comes to communicating with consumers via cell 
phone. Have other regulators seen consumer benefits in 
communicating with consumers via mobile phone or text message?
    Ms. Desai. Oh, sure. Yes, thank you for the question.
    The Consumer Financial Protection Board has an early 
intervention rule that encourages out-bound communications. The 
Home Affordable Modification Program, the Federal Deposit 
Insurance Corporation, the Federal Trade Commission, the 
Consumer Product Safety Commission have all discussed the 
benefits of out-bound communications, both by call and by text. 
There are also State laws that require out-bound 
communications, because they see the value in that. For 
example, with utilities.
    The Chairman. Well, I just want to make, kind of, one final 
point, and that is, nobody is proposing that consumers 
shouldn't have the right to stop unwanted calls at any point. 
Even with the Obama robocall carve-out that was mentioned a 
couple of times today that passed last fall, the FCC's proposed 
rules would allow consumers to demand that a caller stop 
calling immediately, even in that particular circumstance.
    And I also want to be very clear, there is, I believe, and 
I think you heard it here today, strong bipartisan interest in 
ensuring that consumers are protected from harassing robocalls. 
The problem we have is that the TCPA is no longer working as 
well as it should. As we've heard, all of us are plagued by 
unwanted calls, even on our cell phones, which is, I think, the 
point that Ms. Saunders is getting at. At the same time, you 
have legitimate companies that are facing needless lawsuits, 
and consumers are being denied information that they need. And 
I think what this cries out for is a balanced solution.
    And your input today and testimony, I think, has been very 
helpful in elevating these issues and getting a discussion. 
Frankly, for that matter, I thought hearing some--perhaps some 
common ground when it comes to, you know, the bad, the 
harassing, the bad actors and the good actors, and perhaps 
we'll be able to find a way to come up with some solutions that 
reflect that common ground.
    So, I want to thank you all very much for being here.
    Senator Markey. Could--Mr. Chairman, is----
    The Chairman. Yes.
    Senator Markey.--is it possible I can ask one more 
question? Then that would be it.
    The Chairman. I kind of expected that would happen, so, 
Senator Markey, one more question.
    Senator Markey. And I appreciate that. And I know it's an 
unwanted intrusion.
    The Chairman. It's never unwanted.
    Senator Markey. But, I thank you.
    Last year's surface transportation bill, the FAST Act, 
included a provision requiring the IRS to hire private debt 
collectors to collect certain unpaid taxes, Attorney General. 
That means that the IRS is going to be hiring many people to go 
after those who may be unable to pay their taxes. This 
provision, coupled with the TCPA carve-out in the budget deal, 
will open the floodgates to private debt collectors robocalling 
and robotexting millions of Americans. The enactment of the two 
provisions coincide with the rise of tax and debt-collection 
scams as a serious problem, costing Americans millions and 
millions of dollars. Last year, bogus tax scams and fake debt 
collectors topped the Better Business Bureau's list of top 
scams of 2015, with over 32 percent of all scam reports about 
phony tax and debt collectors.
    So, Attorney General, will these two changes in the budget 
and transportation laws on robocalls and robotext provisions 
make it harder for consumers to protect themselves from 
fraudulent tax and debt collectors?
    Mr. Zoeller. Well, there's no question of looking at those 
two, coupled together, that there was this kind of interest. 
And again, like the Chairman said, it was put into the must-
pass budget. So, I think this idea of making the carve-out 
exception really puts consumers at risks, because we've told 
people, you know, ``The IRS will not call you.'' And that's--
``Don't worry, if that you do get the call.'' So, this is not 
going to be a very effective tool to try to go after people, 
other than the harassment that--if that's supposed to get 
things done.
    And I guess I would leave it that, again, this carve-out 
with the exception is going to make the constitutional question 
about whether the Federal Government has now made winners and 
losers in an area which is really covered with free speech. So, 
you may have really killed the whole TCPA by that carve-out.
    Senator Markey. Yes. So, they become electronic kind of 
Luca Brasis, you know, as debt collectors, which is bothering 
you all night long.
    Ms. Saunders, do you agree with the Attorney General?
    Ms. Saunders. Yes, I do.
    Senator Markey. OK, thank you.
    I appreciate it, Mr. Chairman, very much. I think we 
should----
    The Chairman. Thank you, Senator Markey.
    Senator Markey.--tread carefully into this.
    The Chairman. We do very much thank you for being here, 
taking the time, and for responding to our questions. And we 
will keep the hearing record open for 2 weeks, during which 
time Senators are asked to submit any questions for the record. 
And, upon receipt, we would ask all of you if you could submit 
your written answers to the Committee as soon as possible.
    So, thank you all for being here.
    This hearing is adjourned.
    [Whereupon, at 11:45 a.m., the hearing was adjourned.]

                            A P P E N D I X

                                                       May 17, 2016

Hon. John Thune,
Chairman,
Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Senate Committee on Commerce, Science, and Transportation,
Washington, DC.

To the Members of the U.S. Senate Committee on Commerce, Science, and 
Transportation:

    We, the undersigned student loan organizations, commend the 
Committee for holding this hearing, ``The Telephone Consumer Protection 
Act at 25: Effects on Consumers and Business,'' to examine class action 
litigation abuses under the Telephone Consumer Protection Act (TCPA). 
The TCPA, which was enacted over 25 years ago, was well-intentioned 
legislation aimed at protecting the privacy of American consumers 
against abusive telemarketing calls. The law has not kept up with 
technology and was implemented at a time when cell phones were a luxury 
and fees were commonly assessed for individual calls. This is no longer 
the case. According to a recent study from the Centers for Disease 
Control and Prevention,\1\ nearly one-half of American homes (47.4 
percent) had only wireless telephones during the first half of 2015--an 
increase of 3.4 percent over the last year. This number is even higher 
for those age brackets more likely to have student loans--more than 
two-thirds of adults aged 25-29 (71.3 percent) and aged 30-34 (67.8 
percent) live in households with only wireless telephones.
---------------------------------------------------------------------------
    \1\ Stephen J. Blumberg & Julian V. Luke, Wireless Substitution: 
Early Release of Estimates From the National Health Interview Survey, 
January-June 2015, National Center for Health Statistics (Dec. 1, 
2015). http://www.cdc.gov/nchs/data/nhis/earlyrelease/
wireless201512.pdf
---------------------------------------------------------------------------
    In recent years, the TCPA's original purpose has been corrupted by 
widespread and abusive class action litigation where the plaintiffs' 
lawyers are the only big winners. Lawsuits have increased by over 940 
percent between 2010 and 2015, often against legitimate businesses such 
as student loan servicers that are attempting to contact borrowers to 
provide important information, not to make telemarketing calls. As a 
result of this wide-spread litigation, some companies that have prior 
consent are considering not using automated call technology to contact 
borrower cell phones. If this occurs, even more struggling borrowers 
will not receive helpful information such as deadline reminders and 
repayment guidance that could prevent unnecessary student loan 
delinquency or defaults.
    We also commend the Congress for including a provision in the 
Bipartisan Budget Act of 2015 (BBA) that would exempt from the TCPA 
calls made using automated call technology to cell phones ``to collect 
debt owed to or guaranteed by the United States.'' This important 
provision will help student loan borrowers nationwide by enabling 
Federal student loan servicers and collectors to effectively contact 
and communicate with those who are struggling, to help borrowers 
navigate the often-confusing array of student loan repayment options, 
and to provide tailored solutions to prevent unnecessary delinquencies 
and defaults. Our members are not just calling borrowers to say ``pay 
up;'' they can offer real relief to struggling borrowers. The BBA 
provision is an important step in helping us communicate more 
effectively, and is an important beginning to TCPA reform.
    We were very disappointed that the Notice of Proposed Rulemaking 
(NPRM) issued by the Federal Communications Commission (FCC) does not 
fully recognize the importance of allowing student loan servicers the 
ability to call and text student loan borrowers in order to help them 
avoid the negative and costly consequences of delinquency and default. 
The NPRM proposes to arbitrarily limit the exemption to three (3) 
contact attempts per month, regardless of whether we reach the borrower 
or not. It would also subject these calls to the FCC's recent rule on 
reassigned numbers, permitting only one call to a reassigned number 
before exposure to TCPA liability occurs. It commonly takes a number of 
call attempts simply to establish live contact with a borrower, and 
multiple live contacts to help the borrower enroll in an appropriate 
repayment plan, resolve a delinquency or, in the case of defaulted 
borrowers, to establish a rehabilitation program to cure their default 
and repair their credit.
    Under the provisions of the proposed rule, servicers and collectors 
will, in most instances, be unable to make live contact with a borrower 
before it is too late to help keep them out of delinquency or default, 
or to help those in default to rehabilitate their loans. As the 
rulemaking progresses, we look forward to providing the FCC with our 
specific recommendations to improve the proposed rule so that it 
focuses on most effectively helping student and parent borrowers. As 
stated, we believe a special case can and should be made to help 
Federal student loan borrowers.
    Today's hearing serves as an important first step in telling the 
troubling litigation story under the TCPA, and in laying the groundwork 
for continued meaningful reform of the statute which was initiated by 
the BBA. We remain committed to working with this Committee to advance 
important reforms that will modernize the TCPA and allow us to better 
serve our student loan borrowers.
            Sincerely,
                                    Debra J. Chromy, Ed.D.,
                                                         President,
                                       Education Finance Council (EFC).

                                         James P. Bergeron,
                                                         President,
                National Council of Higher Education Resources (NCHER).

                                       Winfield P. Crigler,
                                                Executive Director,
                                Student Loan Servicing Alliance (SLSA).
                                 ______
                                 
                                                       May 17, 2016

Hon. John Thune,
Chairman,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.

Dear Chairman Thune and Ranking Member Nelson:

    We, the undersigned organizations, commend the Committee for 
holding today's hearing to examine class action litigation abuses under 
the Telephone Consumer Protection Act (TCPA). The TCPA, which was 
enacted over 25 years ago, was well-intentioned legislation aimed at 
protecting the privacy of everyday Americans against abusive 
telemarketing calls.
    But the TCPA has become an engine for abusive class action 
litigation that has become widespread. The numbers are staggering. Last 
year alone, 3,710 TCPA lawsuits were filed in Federal court, and 
between 2010 and 2015, case filings increased by over 940 percent.
    Given that the TCPA has not been meaningfully amended by Congress 
since 1991, countless well-intentioned businesses and organizations 
(small and large) who legitimately try to communicate with employees, 
members or customers find themselves defending abusive class action 
litigation. The alleged liabilities appear in many forms and are 
usually based on expansive legal theories that Congress never intended 
when it first enacted the TCPA.
    Today's hearing serves as an important first step to tell the 
troubling litigation story under the TCPA. We remain committed to 
working with this Committee to advance important reforms that will 
bring a 20th Century solution in line with 21st Century challenges.
            Sincerely,

    ACA International
    American Association of Healthcare Administrative Management 
(AAHAM)
    American Financial Services Association (AFSA)
    American Insurance Association (AIA)
    Coalition of Higher Education Assistance Organizations (COHEAO)
    Consumer Bankers Association (CBA)
    Electronic Transactions Association (ETA)
    Financial Services Roundtable (FSR)
    Florida Chamber of Commerce
    Florida Justice Reform Institute (FJRI)
    Indiana Chamber of Commerce
    Las Vegas Metro Chamber of Commerce
    Missouri Chamber of Commerce and Industry
    Montana Chamber of Commerce
    National Association of Chain Drug Stores (NACDS)
    National Association of Mutual Insurance Companies (NAMIC)
    National Restaurant Association (NRA)
    National Retail Federation (NRF)
    Newspaper Association of America (NAA)
    Oregon Liability Reform Coalition (ORLRC)
    Professional Association for Consumer Engagement (PACE)
    Retail Industry Leaders Association (RILA)
    Satellite Broadcasting and Communications Association (SBCA)
    SLSA Private Loan Committee
    South Carolina Civil Justice Coalition (SCCJC)
    State Chamber of Oklahoma
    Student Loan Servicing Alliance (SLSA)
    Texas Civil Justice League (TCJL)
    U.S. Chamber of Commerce (USCC)
    U.S. Chamber Institute for Legal Reform (ILR)
    Washington Liability Reform Coalition
    Wisconsin Manufacturers & Commerce (WMC)
    West Virginia Chamber of Commerce

cc: Members of the Committee on Commerce, Science, and Transportation
                                 ______
                                 
     Prepared Statement of America's Health Insurance Plans (AHIP)
    America's Health Insurance Plans (AHIP) is the national trade 
association representing the health insurance community. AHIP's members 
provide health and supplemental benefits through employer-sponsored 
coverage, the individual insurance market, and public programs such as 
Medicare and Medicaid. AHIP advocates for public policies that expand 
access to affordable health care coverage to all Americans through a 
competitive marketplace that fosters choice, quality, and innovation.
    We appreciate this opportunity to comment on the Telephone Consumer 
Protection Act of 1991 (TCPA) and how it affects the ability of health 
plans to communicate with and provide vital information to their 
customers. We want to highlight the following three points:

   Telephonic communications play an essential role in 
        supporting the innovative strategies through which health plans 
        are working to improve health outcomes for their enrollees.

   It is important to modernize the TCPA to account for changes 
        in the health care and telecommunications markets over the past 
        25 years. Specifically, the law needs to be implemented in a 
        way that allows health plans to focus on affirmative outreach 
        and include essential communications relating to appointment 
        and exam confirmations and reminders, wellness checkups, 
        hospital pre-registration instructions, pre-operative 
        instructions, lab results, post-discharge follow-up intended to 
        prevent readmission, prescription notifications, and home 
        health care instructions.

   We are concerned about the Federal Communications 
        Commission's (FCC) 2015 TCPA Order that would prohibit HIPAA-
        defined covered entities (e.g., health plans and health care 
        clearinghouses) from fulfilling their statutory, regulatory 
        and/or commercial contract obligations to place time-sensitive 
        health care calls to members to support and enhance critical 
        health care services and to ensure that members have the 
        information necessary to make well-informed decisions regarding 
        their health care.
Telephonic Communications Are a Valuable Tool in Improving Patient Care
    Health plans have a long history of developing innovative tools and 
strategies to ensure that enrollees receive health care services on a 
timely basis, while also emphasizing prevention and providing access to 
disease management services for their chronic conditions. Using systems 
of coordinated care, health plans work to ensure that physician 
services, hospital care, prescription drugs, and other health care 
services are integrated and delivered with a strong focus on preventing 
illness, improving health status, and employing best practices to 
swiftly treat medical conditions as they occur--rather than waiting 
until they have advanced to a more serious level.
    Communicating with health plan enrollees is essential to the 
success of the strategies health plans have developed to improve health 
care quality and health outcomes. This includes, for example, 
telephonic communications that remind enrollees to schedule 
appointments with their doctor and refill prescription drugs. In other 
cases, these messages provide information that can promote compliance 
with treatment regimens, encourage healthy activities, and improve the 
management of chronic conditions. These telephone messages are 
permitted, under certain circumstances, by an exemption from the TCPA's 
restrictions on unsolicited phone calls.
    A May 2014 report \1\, commissioned by the Department of Health and 
Human Services (HHS), identifies five categories of mobile health 
programs that use text messaging to communicate with consumers, health 
care professionals, and others:
---------------------------------------------------------------------------
    \1\ ``Using Health Text Messages to Improve Consumer Health 
Knowledge, Behaviors, and Outcomes: An Environmental Scan,'' prepared 
for the U.S. Department of Health and Human Services by the Mathematica 
Policy Research and Public Health Institute, May 2014.

   Health Promotion and Disease Prevention--delivering health 
        information and prevention messaging to promote healthy 
---------------------------------------------------------------------------
        behaviors or referrals to services;

   Treatment Compliance--providing patient reminders to take 
        drugs or attend medical appointments to improve management of 
        asthma, diabetes, or other conditions;

   Health Information Systems and Point-of-Care Support--
        offering clinical support for health professionals and 
        community health workers through telemedicine;

   Data Collection and Disease Surveillance--obtaining real-
        time data on disease outbreaks from community health workers, 
        patient self-reports, or clinic and hospital records; and

   Emergency Medical Response--maintaining alert systems that 
        disseminate information in an emergency or during disaster 
        management and recovery.

    Health plans have demonstrated strong leadership in this area. For 
example, some health plans send phone calls of one minute or less, or 
text messages consisting of 160 characters or less, to remind members 
of upcoming appointments, home visits, or other notifications aimed at 
improving their health. These communications include:

   Case management communications to members with helpful 
        instructions on processes such as post-discharge follow-up and 
        medication adherence;

   Preventative care communications for screenings, 
        vaccinations, and available services; and

   Health plan benefits communications regarding provider/
        benefit changes, plan enrollment reminders, and even weather 
        emergencies affecting an upcoming appointment.
Implementation of the TCPA Needs to Keep Pace With Changes in the 
        Health Care and Telecommunications Markets
    The TCPA was approved by Congress and signed into law in 1991. Over 
the past 25 years, the TCPA has played a useful role in shielding 
consumers from many unsolicited phone calls, including those using 
automated and pre-recorded messages. As we noted above, an exemption 
from the law's restrictions is provided for certain types of telephone 
messages that health plans use to promote the health and well-being of 
their enrollees. At the same time, health care communications conducted 
by telephone are subject to the privacy, security, and marketing 
protections of HIPAA. Patients should feel confident that when they 
receive telephonic communications from their health plans, their 
personal health information will receive the same level of protection 
that is assured in other circumstances.
    Unfortunately, the current TCPA exemption draws an arbitrary and 
antiquated distinction between the use of land line telephone numbers 
and cell phone numbers. Due to the complexity of the exemption--and its 
use of outdated definitions--health plans are reluctant to contact 
enrollees by cell phone, except in limited cases where they have proof 
that the enrollee has granted prior express consent for such 
communications. As a result, the TCPA health care exemption is 
essentially meaningless for health plans that, as part of their quality 
improvement efforts, would like to send telephone messages to a cell 
phone. At a time when cell phones are replacing land lines in many 
households, these restrictions on the ability of health plans to 
contact enrollees on a cell phone have impeded the delivery of 
important medical care messages to certain at-risk populations and in 
some cases have barred health plans from completing quality-focused 
outreach that is required under state law.
    This policy is highly problematic, particularly in light of 
research findings that clearly demonstrate that telephonic 
communications on health care services are successful in improving 
quality and leading to better health outcomes. According to the HHS 
report mentioned above, a ``substantial body of research'' has shown 
that text messaging programs can:

   Bring about changes in behavior that are helpful in 
        improving short-term smoking cessation outcomes and improving 
        short-term diabetes management and clinical outcomes;

   Improve patients' compliance with recommended treatments, 
        including adhering to prescribed medications and showing up for 
        doctor appointments; and

   Improve immunization rates, increase knowledge about sexual 
        health, and reduce risky behaviors related to HIV transmission 
        (although the literature is less definitive in these areas).

    Further, the restrictive interpretation of the TCPA regarding 
health-related calls puts the TCPA at odds with the requirements of 
certain government programs, particularly Medicaid, in which state 
agencies either mandate or strongly encourage that health plans reach 
out to members to provide new member welcome calls and reminders to 
reestablish Medicaid eligibility. These state agencies also encourage 
plans (often through financial incentives) to take proactive efforts to 
improve quality through outreach to members, including many of the 
types of calls and texts noted above.
    Recognizing the advances that have occurred over the past 25 years 
in both the health care system (i.e., the use of text messaging through 
mobile health programs) and in the telecommunications market (i.e., the 
expanded use of cell phones), we believe it is time for Congress and 
the FCC to revisit the TCPA and reevaluate whether the current 
implementation approach is serving the best interests of consumers.
    We urge the Senate Commerce, Science, and Transportation Committee 
and the FCC to reconsider the parameters of the TCPA's current health 
care exemption. By updating this policy to reflect the realities of the 
modern era--through a solution that creates parity between land lines 
and cell phones--policymakers can remove barriers to the delivery of 
important communications that have the potential to significantly 
improve health outcomes for consumers.
                                 ______
                                 
   Prepared Statement on behalf of the American Bankers Association, 
   Consumer Bankers Association, Credit Union National Association, 
    Financial Services Roundtable, Independent Community Bankers of 
       America, and National Association of Federal Credit Unions
    Chairman Thune, Senator Nelson, and members of the Committee, the 
American Bankers Association (ABA),\1\ Consumer Bankers Association 
(CBA),\2\ Credit Union National Association (CUNA),\3\ Financial 
Services Roundtable,\4\ Independent Consumer Bankers of America 
(ICBA),\5\ and National Association of Federal Credit Unions\6\ 
(collectively, the Associations) appreciate the opportunity to submit a 
statement for the record for this hearing on the effects of the 
Telephone Consumer Protection Act (TCPA). As you are aware, that 
statute prohibits, with limited exceptions, telephone calls to 
residential lines and calls and text messages to mobile phones using an 
automatic telephone dialing system (autodialer) unless the caller has 
the prior express consent of the called party.
---------------------------------------------------------------------------
    \1\ ABA is the voice of the Nation's $16 trillion banking industry, 
which is composed of small, regional, and large banks that together 
employ more than 2 million people, safeguard $12 trillion in deposits, 
and extend more than $8 trillion in loans.
    \2\ Founded in 1919, the Consumer Bankers Association (CBA) is the 
trade association for today's leaders in retail banking--banking 
services geared toward consumers and small businesses. The nation's 
largest financial institutions, as well as many regional banks, are CBA 
corporate members, collectively holding well over half of the 
industry's total assets. CBA's mission is to preserve and promote the 
retail banking industry as it strives to fulfill the financial needs of 
the American consumer and small business.
    \3\ CUNA represents America's credit unions and their more than 100 
million members.
    \4\ The Financial Services Roundtable represents the largest 
integrated financial services companies providing banking, insurance, 
payment and investment products and services to the American consumer. 
FSR member companies provide fuel for America's economic engine, 
accounting for $92.7 trillion in managed assets, $1.2 trillion in 
revenue, and 2.3 million jobs.
    \5\ The Independent Community Bankers of America, the Nation's 
voice for more than 6,000 community banks of all sizes and charter 
types, is dedicated exclusively to representing the interests of the 
community banking industry and its membership.
    \6\ The National Association of Federal Credit Unions is the only 
national trade association focusing exclusively on federal issues 
affecting the Nation's federally insured credit unions. NAFCU 
membership is direct and provides credit unions with the best in 
Federal advocacy, education and compliance assistance.
---------------------------------------------------------------------------
    The Associations commend the Committee for holding this hearing. 
Reform of the TCPA is urgently needed. Enacted 25 years ago to limit 
aggressive telemarketing and secondarily, to protect the nascent 
wireless phone industry, the TCPA was designed to provide consumers 
with a right to pursue an individual claim against an unlawful caller 
in small claims court and without the need for an attorney. Since then, 
the TCPA has been interpreted by the Federal Communications Commission 
(Commission or FCC) to apply, potentially, to any dialing technology 
more advanced than a rotary phone and to impose liability for calls to 
numbers for which consent has been obtained but the number has been 
reassigned unbeknownst to the caller. With statutory damages of up to 
$1,500 per call, any call that is purported to have been made using an 
autodialer and that is inadvertently made to a wireless number without 
documented consent can result in a class action lawsuit with a damage 
claim in the millions, if not billions, of dollars. While the total 
dollar value of these class action lawsuits can be staggering, and 
frequently generate millions in fees for the attorneys that pursue the 
cases, these lawsuits rarely accomplish a substantial recovery for 
consumers. As the attached chart of recent TCPA settlements from one 
financial institution demonstrates, the median amount awarded to 
consumers would have been $7.70 if all class members submitted a claim.
    This risk of draconian liability has led financial institutions to 
limit--and, in certain instances, to eliminate--many pro-consumer, non-
telemarketing communications, including calls to combat fraud and 
identity theft, provide notice of data security breaches, and help 
consumers manage their accounts and avoid late fees and delinquent 
accounts. The balance Congress struck between protecting consumers and 
allowing routine and important communications between a business and 
its customers to occur has been lost--and, all too often, the very 
consumers Congress sought to protect are harmed.
    In our statement, we make three points:

   The TCPA, as interpreted by the Commission, has a 
        detrimental impact on consumers by effectively preventing 
        financial institutions from sending important, and often time-
        sensitive, messages to consumers.

   The TCPA is out of touch with current technology and 
        consumer communication preferences and expectations and 
        prevents financial institutions from effectively serving 
        consumers who wish to communicate by cell phone.

   Congress should reform the TCPA by imposing a damages cap 
        and mandating the establishment of a database of reassigned 
        numbers.
I. The TCPA Has a Detrimental Impact on Consumers by Effectively 
        Preventing Financial Institutions from Sending Important, and 
        Often 
        Time-sensitive, Messages to Consumers
    Financial institutions seek to send automated messages to prevent 
fraud and identity theft, provide notice of security breaches, provide 
low balance and over-limit alerts, and help consumers avoid 
delinquency, among other beneficial purposes. Autodialers enable 
financial institutions to provide these important communications to 
large numbers of consumers quickly, efficiently, and economically. The 
Commission's recent interpretation of the TCPA, coupled with the threat 
of class action liability, discourages financial institutions from 
making these calls that benefit consumers.
A. The Significance of Facilitating Important Communications to Cell 
        Phone Users, Particularly Low Income Users
    Consumers today value, and increasingly expect, the convenience of 
wireless connectivity and the convenience of being able to use mobile 
financial services. Nearly 50 percent of U.S. households are now 
``wireless-only,'' with that percentage rising to over 70 percent for 
adults between 25 and 29.\7\
---------------------------------------------------------------------------
    \7\ Stephen J. Blumberg & Julian V. Luke, U.S. Dept. of Health and 
Human Services, Ctr. for Disease Control & Prevention, Nat'l Ctr. for 
Health Statistics, Wireless Substitution: Early Release of Estimates 
from the National Health Interview Survey, January-June 2015 (2015), 
available at http://www.cdc.gov/nchs/data/nhis/earlyrelease/
wireless201512.pdf (Tables 1 & 2).
---------------------------------------------------------------------------
    This new reality has profound implications for how financial 
institutions communicate with consumers, especially those of low and 
moderate incomes for whom a cell phone may be their only point of 
contact. Often, low income consumers strictly rely on their cell phone 
for Internet and other communications because purchasing multiple 
devices, such as landlines and laptops, can be prohibitively expensive. 
Research conducted by the Federal Deposit Insurance Corporation (FDIC) 
found that underbanked consumers prefer text messages to e-mails when 
receiving alerts from financial institutions because texts are faster, 
easier to receive, attention grabbing, and quicker and easier to 
digest.\8\ Building on this research, the FDIC is exploring the 
potential for mobile banking to promote and support underserved 
consumers' banking relationships in part by increasing the 
communications and alerts sent to those underserved consumers that use 
mobile services.\9\ The Bureau of Consumer Financial Protection 
(Bureau) also concluded that alerts to cell phones help consumers, 
including low income consumers, access financial services and manage 
personal finances:
---------------------------------------------------------------------------
    \8\ Fed. Deposit Ins. Corp., Qualitative Research on Mobile 
Financial Services for Underserved Consumers (Oct. 30, 2015), at 21, 
available at https://www.fdic.gov/about/comein/2015/come-in-2015.pdf.
    \9\ Fed. Deposit Ins. Corp., Fil-32-2016, Request for Comments on 
Mobile Financial Services Strategies and Participation in Economic 
Inclusion Demonstrations 3 (2016), available at https://www.fdic.gov/
news/news/financial/2016/fil16032.pdf.

        By enabling consumers to track spending and manage personal 
        finances on their devices through mobile applications or text 
        messages, mobile technology may help consumers achieve their 
        financial goals. For economically vulnerable consumers, mobile 
        financial services accompanied by appropriate consumer 
        protections can enhance access to safer, more affordable 
        products and services in ways that can improve their economic 
        lives.\10\
---------------------------------------------------------------------------
    \10\ Bureau of Consumer Fin. Prot., Mobile Financial Services: A 
Summary of Comments from the Public on Opportunities, Challenges, and 
Risks for the Underserved, at 10 (Nov. 2015), available at http://
files.consumerfinance.gov/f/201511_cfpb_mobile-financial-services.pdf 
(emphasis added).

    Financial institutions want to serve their customers and members--
and promote financial inclusion--by connecting with consumers who may 
use only cell phones for communications. The TCPA should not interfere 
with the efforts of these institutions to provide financial services to 
consumers of all economic levels.
B. The Threat of TCPA Litigation Unnecessarily Limits Several Types of 
        Pro-
        Consumer Calls
    The threat of class action liability threatens to curtail the 
following categories of pro-consumer, non-telemarketing communications 
made by financial institutions:

        (1)  Breach Notification and Fraud Alerts

    With identity theft and fraud losses at all-time highs,\11\ 
financial institutions are relentlessly pursuing fraud detection and 
prevention capabilities. A key component is autodialed calling to 
consumers' wireline and mobile telephones, including text messaging to 
customers' mobile devices, to alert customers to out-of-pattern account 
activity and threatened security breaches. In addition, financial 
institutions are required to establish response and consumer 
notification programs following any unauthorized access to consumers' 
personal information, under Section 501(b) of the Gramm-Leach-Bliley 
Act, as well as under the breach notification laws of 46 states and the 
District of Columbia.\12\ The volume of these required notifications, 
which average 300,000 to 400,000 messages per month for one large 
financial institution alone, cannot be accomplished at all, much less 
with acceptable speed, unless the process is automated.\13\ In 
addition, identity theft victims have the right, under the Fair Credit 
Reporting Act (FCRA), to have fraud alerts placed on their credit 
reporting agency files, which notify all prospective users of a 
consumer report that the consumer does not authorize the establishment 
of any new credit plan or extension of credit without verification of 
the consumer's identity. Further, the FCRA expressly directs financial 
institutions to call consumers to conduct this verification.\14\
---------------------------------------------------------------------------
    \11\ In 2015, 781 data breaches were reported, a 27 percent 
increase from 2013. Press Release, Identity Theft Resource Center, 
Identity Theft Resource Center Breach Report Hits Near Record High in 
2015 (Jan. 25, 2016), available at http://www.idtheftcenter.org/
index.php/ITRC-Surveys-Studies/2015databreaches.html. In 2014, 12.7 
million people were victims of identity fraud. Al Pascual & Sarah 
Miller, Javelin Strategy & Research, 2015 Identity Fraud: Protecting 
Vulnerable Populations (Mar. 2015), https://www.javelinstrategy.com/
coverage-area/2015-identity-fraud-protecting-vulnerable-populations.
    \12\ Gramm-Leach-Bliley Financial Services Modernization Act of 
1999, Pub. L. 106-102, 113 Stat. 1338, Sec. 501(b); see, e.g., Cal. 
Civ. Code Sec. 1798.29; Fla. Stat. Sec. 817.5681; 815 ILCS Sec. 530/
10(a); NY CLS Gen. Bus. Sec. 899-aa; N.C. Gen. Stat. Sec. 75-65; Rev. 
Code Wash. Sec. 19.255.010.
    \13\ The greater efficiency of automated calling is suggested by a 
report issued by Quantria Strategies, LLC, which states that automated 
dialing permits an average of 21,387 calls per employee per month, as 
opposed to an average of 5,604 calls per employee per month when manual 
dialing is used. The gain in efficiency when automated methods are used 
is 281.6 percent. See J. Xanthopoulos, Modifying the TCPA to Improve 
Services to Student Loan Borrowers and Enhance Performance of Federal 
Loan Portfolios 9 (July 2013), available at http://apps.Com
mission.gov/ecfs/document/view?id=7521337606.
    \14\ Fair Credit Reporting Act Sec. 605A (codified at 15 U.S.C. 
Sec. 1681c-1).
---------------------------------------------------------------------------
    Although the Commission granted an exemption from the TCPA's 
consent requirements for these data breach and suspicious activity 
alert calls, the Commission inexplicably required that exempted calls 
be made only to a number that was provided by the customer. As a result 
of this requirement, many consumers will not be contacted with time-
sensitive messages intended to prevent fraud and identity theft simply 
because there is no documentation that the consumer, not a spouse or 
other joint account holder, provided the number to the financial 
institution. What we have learned from the marketplace is that the 
``provided number'' condition is unnecessarily limiting the ability of 
financial institutions to send exempted messages:

   One bank is unable to send approximately 3,000 exempted 
        messages each day due to the provided number condition.

   A second large bank is not able to send exempted messages to 
        approximately 6 million customers because of the condition.

   A third bank is not able to send an exempted message to 62 
        percent of its customers because of the condition.

    Small financial institutions, including credit unions and community 
banks, have also expressed concerns, or found that they do not have the 
resources to comply with a number of conditions that must be met to 
qualify for this exemption. The experience of these financial 
institutions shows that the provided number condition, rather than 
serving the interests of consumers, has effectively prevented consumers 
from enjoying the benefits the exemption was intended to provide.

        (2)  Consumer Protection and Fee Avoidance Calls

    Financial institutions use autodialed telephone communications to 
protect consumers' credit and help them avoid fees. Institutions seek 
to alert consumers about low account balances, overdrafts, over-limit 
transactions, or past due accounts in time for those customers to take 
action and avoid late fees, accrual of additional interest, or negative 
reports to credit bureaus. Indeed, the FDIC listed ``low-balance 
alerts'' as one of the ``most promising strategies'' for financial 
institutions to help consumers avoid overdraft or insufficient funds 
(NSF) fees.\15\ Autodialed calls that deliver prerecorded messages are 
the quickest and most effective way for these courtesy calls to be 
made. Failure to communicate promptly with consumers who have missed 
payments or are in financial hardship can have severe, long-term 
adverse consequences. These consumers are more likely to face 
repossession, foreclosure, adverse credit reports, and referrals of 
their accounts to collection agencies. Prompt communication is a vital 
step to avoid these harmful consumer outcomes.
---------------------------------------------------------------------------
    \15\ Fed. Deposit Ins. Corp., Fil-32-2016, Request for Comments on 
Mobile Financial Services Strategies and Participation in Economic 
Inclusion Demonstrations 3 (2016), available at https://www.fdic.gov/
news/news/financial/2016/fil16032.pdf.

---------------------------------------------------------------------------
        (3)  Loan Modification Calls

    Financial institutions also rely upon automated calling methods to 
contact consumers who are encountering difficulty paying their 
mortgages or student loans. Autodialers and prerecorded messages are 
used to initiate contact with delinquent borrowers, to remind them to 
return the paperwork needed to qualify for a modification, and to 
notify borrowers that a modification is being delivered so that the 
package will be accepted. Significantly, the Commission's consent 
requirement is in conflict with the Bureau's mortgage servicing rules, 
which require servicers to make a good faith effort to establish live 
contact with a borrower. If the servicer has not obtained the consent 
of the borrower, it cannot--consistent with the TCPA--efficiently make 
the calls required by the Bureau's rules to the approximately 50 
percent of consumers with wireless numbers only.

        (4)  Customer Service Calls

    Financial institutions rely upon the efficiency of autodialed 
calling to provide follow-up calls to resolve consumers' service 
inquiries. For example, if a consumer inquiry requires account 
research, a customer service representative often completes the 
necessary research and places an autodialed follow-up call to the 
consumer. Autodialed calls are initiated also to remind consumers that 
a credit card they have requested was mailed and must be activated.

        (5)  Insurance Policyholder Alerts

    Insurance providers use autodialers to advise consumers of the need 
to make payment on automobile and life insurance policies to prevent 
potential lapse. Automobile insurers are required to give written 
notice 10-30 days in advance before terminating policies for failure to 
pay. Using an autodialer helps ensure the consumer is aware of the need 
to make payment in time to avoid a lapse in policy, late fees, or 
driving without legally-required liability insurance.
    Similarly, life insurance policies require advance written notice 
of cancellation. If a policy lapses for non-payment, some individuals 
may no longer be eligible for life insurance or may have to pay 
substantially more for that insurance. Use of the autodialed messages 
helps avoid nonpayment cancellation of the life insurance.

        (6)  Disaster Notifications

    Many property insurance companies rely on the speed of autodialers 
to notify their customers when a catastrophe is imminent of how and 
where to file a claim. Furthermore, immediately after a disaster, 
wireline phone use may be unavailable, claim locations may have 
changed, and normal communications may not be operating, necessitating 
calls to mobile phones. Similarly, autodialers may also be used by 
insurers to give information regarding the National Flood Insurance 
Program.
II. The TCPA Prevents Financial Institutions from Effectively Serving 
        Consumers who Wish to Communicate by Mobile Phone
    As interpreted by the Commission, the TCPA imposes significant 
impediments on the ability of financial institutions and other 
businesses to communicate with those consumers who elect to communicate 
by cell phone. Put simply, the TCPA effectively prevents financial 
institutions from using the most efficient means available to advise 
these mobile phone-electing consumers of important and time-sensitive 
information affecting the consumers' accounts. This is not what 
Congress intended. In enacting the TCPA, Congress sought to provide 
consumers with choice of contact, not isolation from contact. Making 
that choice for cell phone users more burdensome and less efficient--as 
the Commission has done in its recent orders--is not what Congress 
sought to accomplish. The report of the House Committee on Energy and 
Commerce accompanying the enactment of the TCPA clearly states that, 
under the TCPA, ``a retailer, insurer, banker or other creditor would 
not be prohibited from using an automatic dialer recorded message 
player to advise a customer . . . that an ordered product had arrived, 
a service was scheduled or performed, or a bill had not been paid.'' 
\16\
---------------------------------------------------------------------------
    \16\ H.R. Rep. 102-317 (1991).
---------------------------------------------------------------------------
    There are two primary ways in which the TCPA, as interpreted by the 
FCC, imposes significant impediments on the ability of financial 
institutions to contact consumers, as described below.
A. The TCPA Has Been Interpreted to Sweep all Non-manual Dialing 
        Technologies within the TCPA's Limited Autodialer Category
    The Commission has construed the definition of an autodialer so 
broadly that it sweeps in technologies used by financial institutions 
to send important messages to consumers that were never contemplated to 
fall within the definition of this term. This expansive interpretation 
effectively prohibits financial institutions from using many efficient 
dialing technologies unless the consumer's prior express consent has 
been obtained. Congressional action is needed to return the definition 
of autodialer to its original, limited application.
    As defined in the TCPA, an autodialer 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.'' \17\ 
Significantly, financial institutions, unlike the abusive telemarketers 
from which Congress intended to protect consumers, are interested only 
in calling the telephone numbers of actual customers and members and 
have no desire or incentive to dial numbers generated randomly or in 
sequence.
---------------------------------------------------------------------------
    \17\ 47 U.S.C. Sec. 227(a)(1) (emphasis added).
---------------------------------------------------------------------------
    However, the Commission greatly expanded the scope of the devices 
classified as an autodialer beyond those devices that use a random or 
sequential number generator. In addition, the Commission concluded a 
device is an autodialer if it has the ``potential ability'' to perform 
the autodialer's functions--even if it does not have the present 
ability to do so.\18\ This interpretation, divorced from the statutory 
text, sweeps in dialing systems used by financial institutions, 
preventing them from sending important messages to consumers 
efficiently. In fact, one financial institution has resorted to 
purchasing last generation ``flip'' cell phones solely to ensure 
compliance with the Commission's rulings concerning the TCPA. Financial 
institutions should not be forced to use all-but obsolete technology in 
order to remain compliant with federal law.
---------------------------------------------------------------------------
    \18\ In the Matter of Rules & Regulations Implementing the Tel. 
Consumer Prot. Act of 1991 et al., 30 F.C.C. Rcd. 7961, 7976 (2015) 
(emphasis added).
---------------------------------------------------------------------------
B. The TCPA's Imposition of Liability for Calling Reassigned Numbers is 
        Harmful to Consumers
    As interpreted by the FCC, the TCPA creates a risk of liability for 
calling a number for which the caller has received consent, but which 
has been subsequently reassigned to another consumer unbeknownst to the 
caller. The potential liability for calls made in good faith to 
reassigned numbers threatens to curtail important and valued 
communications between the institution and consumers.\19\ If the fear 
of calling a reassigned number prevents a financial institution from 
sending an alert to a consumer about potential identity theft, 
suspicious activity on the account, or a low balance, the consumer 
suffers.
---------------------------------------------------------------------------
    \19\ Although the Commission established a ``one call'' safe 
harbor, this provides little comfort to financial institutions, as 
callers often do not learn whether a call has connected with the 
intended recipient--as opposed to a party to which the number may have 
been reassigned--and thus do not receive notice when the number has 
been reassigned to another consumer.
---------------------------------------------------------------------------
    The TCPA's imposition of liability for calls made to reassigned 
numbers is wholly unnecessary to protect the privacy of consumers. 
There is simply no need or incentive for a financial institution to 
place a non-telemarketing, informational call to anyone other than the 
intended recipient. Moreover, institutions make significant efforts to 
promote accuracy in the numbers they call, such as providing consumers 
multiple means to edit contact information, confirming a consumer's 
contact information during any call with the consumer, regularly 
checking to confirm that a residential landline number has not been 
transferred to a wireless number, or providing instructions for 
reporting a wrong number call.
    Financial institutions--which can place billions of informational 
calls annually--cannot completely avoid calling reassigned wireless 
telephone numbers. Telephone companies recycle as many as 37 million 
telephone numbers each year,\20\ and yet there is no public wireless 
telephone directory or tool available to identify numbers that have 
been reassigned. As discussed below, Congress should mandate the 
establishment of a database of reassigned numbers to assist callers 
with contacting consenting consumers at those consumers' current 
number.
---------------------------------------------------------------------------
    \20\ Alyssa Abkowitz, Wrong Number? Blame Companies' Recycling, 
Wall Street J. (Dec. 1, 2011), available at http://www.wsj.com/
articles/SB100014240529702040120045770701226874
62582#ixzz1fFP14V4h.
---------------------------------------------------------------------------
III. Congress Should Reform the TCPA by Imposing a Damages Cap
    We urge Congress to reform the TCPA to ensure that financial 
institutions and other callers can make important, and often time-
sensitive, calls to consumers. A statute designed to provide consumers 
with a right to pursue an individual claim against an unlawful 
telemarketer in small claims court and without the need for an attorney 
\21\ now threatens any company or financial service provider that seeks 
to use automated dialing technologies to communicate with its customers 
or members with abusive class action litigation. The balance that 
Congress struck between protecting consumers and safeguarding 
beneficial calling practices has been eviscerated, and recent 
interpretations of the TCPA clearly demonstrate the Commission's 
refusal to restore this balance.
---------------------------------------------------------------------------
    \21\ See 137 Cong. Rec. 30821-30822 (1991) (statement of Sen. 
Hollings) (``The substitute bill contains a private right-of-action 
provision that will make it easier for consumers to recover damages 
from receiving these computerized calls. The provision would allow 
consumers to bring an action in State court against any entity t hat 
violates the bill. The bill does not, because of constitutional 
constraints, dictate to the states which court in each state shall be 
the proper venue for such an action, as this is a matter for State 
legislators to determine. Nevertheless, it is my hope that states will 
make it as easy as possible for consumers to bring such actions, 
preferably in small claims court. . . . Small claims court or a similar 
court would allow the consumer to appear before the court without an 
attorney. The amount of damages in this legislation is set to be fair 
to both the consumer and the telemarketer.'') (emphasis added).
---------------------------------------------------------------------------
    Congress should amend the TCPA by imposing a damages cap similar to 
the damage caps assigned to other consumer financial protection 
statutes. The Truth in Lending Act (TILA), the Electronic Funds 
Availability Act, and the Fair Debt Collection Practices Act each limit 
the amount awarded in individual and class action litigation. TILA, for 
example, includes not only individual statutory damages caps, but also 
imposes an aggregate cap in the event of a class action or series of 
lawsuits tied to the same lack of compliance. We believe that a similar 
cap would be an appropriate addition to the TCPA. We welcome the 
opportunity to work with Congress to determine what the proper damages 
cap amount would be for TCPA litigation.
Conclusion
    In enacting the TCPA, Congress struck a balance between protecting 
consumer privacy and safeguarding calling practices that help consumers 
avoid identity theft, late fees, and other harms. The Commission's 
interpretations of the TCPA have eviscerated that balance, preventing 
financial institutions and others from serving consumers who wish to 
communicate by cell phone. Congress should protect consumers' ability 
to receive important, and often time-sensitive, calls by reforming the 
TCPA.
                                 ______
                                 
                                                    Navient
                                       Washington, DC, June 1, 2016

Hon. John Thune,
Chairman,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.

Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.

Dear Chairman Thune and Ranking Member Nelson,

    Thank you for the recent hearing on the Telephone Consumer 
Protection Act of 1991 (the ``TCPA'') and its impact on consumers and 
businesses.\1\ When your Committee announced the hearing, Navient 
looked forward to a fulsome discussion regarding a variety of 
stakeholder concerns regarding the TCPA, including how the statute is 
hindering efforts to protect consumers who are often prevented from 
receiving important, time-sensitive non-marketing information. We also 
expected that you would hear about the growing number of unreasonable 
challenges that organizations face in complying with the TCPA, and how 
this Congress's recent passage of the Bipartisan Budget Act of 2015 
(the ``Budget Act'')\2\ can spur much-needed assistance to Federal 
student loan borrowers. Given the complexity of the student loan system 
and the numerous options available to borrowers in repayment, this 
discussion is critically important.
---------------------------------------------------------------------------
    \1\ The Telephone Consumer Protection Act at 25: Effects on 
Consumers and Business: Hearing Before the S. Comm. on Commerce, 
Science, & Transportation, 114th Cong. (2016) (``2016 TCPA Hearing'').
    \2\ See Bipartisan Budget Act of 2015 Sec. 301, codified at 47 
U.S.C. Sec. 227 (2016) (the ``Budget Act'').
---------------------------------------------------------------------------
    While there were many important issues addressed in the hearing, we 
were disappointed that there was not a fuller discussion of the 
importance of contact with Federal student loan borrowers and the 
impediments that the TCPA imposes to reaching and helping struggling 
and at-risk borrowers. Rather than exploring how the Budget Act can 
help prevent Federal borrowers from advancing in delinquency or 
defaulting, we were dismayed by some of the misinformation provided to 
the Committee regarding Federal student loan borrowers, based on 
preconceived notions of--and inaccurate testimony related to--
``robocalls.''
    We are hopeful that this submission will supplement the record with 
information not provided during the hearing; address several erroneous 
statements made during the hearing; and highlight rules that the FCC 
has proposed that will undermine the clear directive this Congress gave 
the agency and, if adopted, will cause further harm to student loan 
borrowers.
    We hope that the Committee will consider this additional 
information as it continues its important work regarding the TCPA and 
the Budget Act.
Our Shared Goal in Helping Borrowers
    Navient is the Nation's largest student loan servicer and a partner 
to millions of Federal student loan borrowers. Navient does not set or 
even influence the interest rates or terms for Federal student loans; 
those are set by Congress. We also do not set the tuition rates or 
enrollment fees, which are set by colleges and universities. Nor do we 
set the penalties for non-payment. Instead, our role is to work with 
borrowers after they have selected the school of their choice and 
incurred a debt. We help borrowers navigate the overly complex array of 
repayment options as they work towards successfully repaying their 
loans. There are now more than 50 options available to borrowers, 
including deferment, forbearance, and forgiveness, with 16 repayment 
programs (nine of which are based on income, as discussed below).
    And Navient is a dedicated and successful partner. Overall, Federal 
student loan borrowers who enter repayment and have Navient as their 
servicer are 38 percent less likely to default than borrowers who use 
other Federal student loan servicers.
    Mr. Chairman, Navient is one of the businesses ``trying to do the 
right thing and play by the rules.'' \3\ We too understand the 
frustration that comes when the phone rings and the voice on the other 
line is a prerecording claiming that we just won a ``free'' cruise.\4\ 
Your sentiment harkens back to the TCPA's enactment, legislation 
adopted to curb abusive telemarketing calls.\5\ But Federal student 
loan servicers are different from telemarketers offering a free cruise, 
and the TCPA's implementation should reflect this simple truth.
---------------------------------------------------------------------------
    \3\ See 2016 TCPA Hearing, Statement of Sen. John Thune, Chairman, 
S. Comm. on Commerce, Science, & Transportation (``Chairman Thune 
Statement'').
    \4\ Id.
    \5\ See S. Rep. No. 102-178, at 2 (1991); H.R. Rep. No. 102-317, at 
1 (1991). The House Report, for example, noted that ``[u]nrestricted 
telemarketing . . . can be an intrusive invasion of privacy'' and that 
``[m]any consumers are outraged [at] the proliferation of intrusive, 
nuisance calls to their homes from telemarketers.'' H.R. Rep. No. 102-
317, at 1 (1991).
---------------------------------------------------------------------------
    In the first quarter of 2016, the total value of Federal student 
loans in default reached $121 billion.\6\ Statutorily mandated 
penalties for default are harsh and include wage garnishment (without 
the need for a court order), offset of Federal tax refunds, and loss of 
eligibility for Federal financial assistance. These are in addition to 
the impact to the borrower's credit file. Calls and text messages from 
student loan servicers are proven, effective reminders that help 
millions of Americans. And keeping borrowers on track has tangible 
benefits such as making it easier to pass a pre-employment credit 
check, obtain housing, or secure financing for other essential products 
and services.
---------------------------------------------------------------------------
    \6\ See Dept. of Ed., Fed. Student Aid Data Ctr., Direct Loan and 
Federal Family Education Loan Portfolio by Loan Status, https://
studentaid.ed.gov/sa/about/data-center/student/portfolio (last visited 
May 24, 2016).
---------------------------------------------------------------------------
Myths About the TCPA are Harming Borrowers and Other Consumers
    The purpose for the hearing was to ``understand whether [the] TCPA 
is inadvertently hurting the good actors and consumers.'' \7\ The bad 
news is that it is. The worse news is that seemingly well-minded 
organizations are advocating for policies that threaten to harm 
consumers and prevent Federal student loan servicers from providing 
borrowers with critical, time-sensitive information that can help avoid 
financial catastrophe.
---------------------------------------------------------------------------
    \7\ Chairman Thune Statement at 1.
---------------------------------------------------------------------------
    For example, during the hearing, the Committee received testimony 
that the ``best estimate of the total number of people who could be 
negatively impacted by [the Budget Act's amendments to the TCPA] is 
over 61 million people,'' including an estimated 41.8 million Federal 
student loan borrowers.\8\ This is a red herring that exponentially 
overstates the number of affected borrowers. Recall that the Budget Act 
amendments to the TCPA only impact borrowers for which callers did not 
already have prior express consent to call. Navient already has consent 
to autodial 90 percent of the Federal student loan borrowers that it 
services, so the Budget Act amendments only pertain to the remaining 
borrowers.
---------------------------------------------------------------------------
    \8\ 2016 TCPA Hearing, Statement of Margot Saunders, Of Counsel, 
National Consumer Law Center (``NCLC'').
---------------------------------------------------------------------------
    Moreover, the Committee received testimony that ``[m]any, if not 
most, of the households living below the poverty line rely on pay-as-
you-go, limited-minute prepaid wireless products.'' \9\ Again, this is 
a red herring. In the first instance, unanswered calls typically do not 
trigger any expense to the wireless subscriber. Second, less than one 
percent of the borrowers that Navient services: (1) use a prepaid cell 
phone; (2) have not provided Navient with consent to contact; and (3) 
are delinquent on their Federal student loan obligations. The idea that 
allowing student loan servicers to help borrowers avoid delinquency and 
default--and the Federal penalties stemming from delinquency and 
default--will result in massive numbers of individuals losing ``access 
to health care, transportation, emergency, and other essential 
services'' and falling victim to ``social isolation'' \10\ borders on 
hysterics.
---------------------------------------------------------------------------
    \9\ Id. at 4. Even though no citation was provided, we currently 
have no reason to disagree with this claim.
    \10\ Id. at 5.
---------------------------------------------------------------------------
    NCLC testified that the major causes of consumer delinquency are 
unemployment, illness and marital problems.\11\ While this may be true, 
it does not support restricting attempts to reach Federal student loan 
borrowers. Unlike other forms of consumer credit, there are numerous 
options for borrowers to resolve delinquencies and avoid default. In 
some cases, such as repayment plans based on income, the payment 
obligation can be as low as $0. More than 90 percent of the time that 
Navient has a live conversation with a borrower, the customer is able 
to resolve his or her delinquency. But the converse is also true: 90 
percent of borrowers that we service who default on their student loans 
do not have a live conversation with us beforehand, despite our best 
efforts to reach them. Based on these facts, we should be promoting, 
not hindering, efforts to connect servicers with borrowers, 
particularly when default prevention options such as deferments due to 
unemployment or a temporary total disability are available.
---------------------------------------------------------------------------
    \11\ Id. at 16-17.
---------------------------------------------------------------------------
    Included within the 50 different options available to borrowers are 
nine different income-driven repayment (``IDR'') plans. These plans 
allow borrowers to base their monthly payment on their discretionary 
income, adjusted for family size. The monthly payment can be as low as 
$0. Currently, one in four Direct Loan borrowers that Navient services 
is enrolled in an IDR plan.
    Live contact with struggling borrowers is key to helping them 
navigate the multitude of options and the complexity of the repayment 
system. Because of the TCPA's restrictions, we are less able to reach 
and assist borrowers who have not given us consent to contact them on 
their cell phones. As mentioned above, we can autodial nine out of 10 
of the Federal student loan borrowers we service today. And these 
borrowers are far more likely to be current. Indeed, borrowers who we 
are not able to autodial are more likely to be delinquent and default. 
Only 50 percent of borrowers who default have provided consent to call 
them on their cell phones. It bears repeating--if we are able to speak 
with these struggling borrowers, nine out of 10 will not default. Yet, 
today's interpretations of the TCPA impose hurdles to providing these 
borrowers the very information that they need.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    In sum, there is a strong and direct correlation between Navient's 
ability to contact borrowers and the likelihood that a borrower will 
avoid the serious consequences of delinquency or default on a student 
loan, and the TCPA makes it much more difficult for Navient to contact 
those borrowers.
The FCC is Undermining this Congress's TCPA Directives
    Fortunately, last year this Congress took swift action to allow 
Federal student loan servicers to continue to help borrowers in need 
while also maintaining important consumer protections. In no uncertain 
terms, Congress exempted from the TCPA calls to collect debts owed to 
or guaranteed by the United States. But Congress gave to the FCC the 
task of implementing regulations. Unfortunately, the FCC's proposed 
rules, if adopted, would do little to help millions of Federal student 
loan borrowers lower their risk of default. The proposals suffer from 
several key flaws.
    First, the FCC proposes limiting the exemption to calls made after 
a borrower is already delinquent, contrary to Congress's plain language 
which makes no distinction between delinquent and non-delinquent 
borrowers.\12\ Navient regularly makes calls to certain non-delinquent 
borrowers that are aimed at keeping a borrower on track (and thus for 
the purpose of ``collecting'' the debt). While Federal student loan 
servicers have no interest or need to call borrowers in general who are 
current on their loans, there are important instances when outreach is 
key:
---------------------------------------------------------------------------
    \12\ See Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, Notice of Proposed Rulemaking, FCC 16-57  8-9 
(rel. May 6, 2016) (``NPRM'').

   Borrowers who are approaching deadlines or changes in 
        status: There are many instances, such as deferments, 
        forbearances, and the grace period between school and 
        repayment, where a borrower may be approaching a new payment 
        status. Some of these borrowers--especially those at risk of 
        delinquency--benefit from early outreach to make sure they are 
        aware of their repayment options. One example of an at-risk 
        borrower is one who has previously defaulted and has returned 
        to repayment through loan rehabilitation. Navient reaches out 
        to these borrowers early--before delinquency--to make sure that 
        they stay on track and are able to access the right repayment 
---------------------------------------------------------------------------
        plan for them.

   Income-driven repayment enrollment: IDR is a great option 
        for many borrowers, but they must apply on-line at the 
        Department of Education or fill out a paper application to 
        enroll in an IDR plan. The Department of Education requires 
        Federal servicers to call borrowers whose applications are 
        incomplete or denied to help them complete their application, 
        regardless of their delinquency status. In addition, Navient 
        calls previously delinquent borrowers who have indicated that 
        they plan to enroll in IDR but for whom we have not received a 
        complete application. Neither of these outreach attempts to 
        borrowers without consent would be allowed under the FCC's 
        proposed rule.

   IDR reenrollment: Borrowers are required to reenroll 
        annually in IDR plans. Navient places reminder calls to 
        borrowers whose annual reenrollment deadline is approaching to 
        make sure they submit their paperwork before their payments 
        increase.

    The intent of the Budget Act provision is to ensure that Federal 
student loan borrowers are aware of their options regardless of whether 
or not they are delinquent. It was certainly not the legislation's 
intent to prevent reaching out at key times before--or after--
delinquency to help a borrower stay on track.
    Second, the FCC proposes not including within the exemption calls 
to reassigned wireless numbers.\13\ This is untenable. College students 
change telephone numbers frequently, and Navient prevent entirely calls 
to reassigned numbers. If the new holder of a reassigned number refuses 
to answer a call or respond to a text message informing Navient that 
the number no longer belongs to the borrower, Navient is left in the 
indefensible and unenviable position of either attempting additional 
contacts using the number (and risk facing litigation) or giving up on 
contacting the borrower.
---------------------------------------------------------------------------
    \13\ Id.  14.
---------------------------------------------------------------------------
    Finally, the FCC proposes to severely limit the number of exempted 
calls to three per month--whether or not the called party answers the 
phone.\14\ The FCC's proposal has no basis and is far more restrictive 
than the three calls per week that NCLC urged the Consumer Financial 
Protection Bureau to allow in the context of the Fair Debt Collection 
Practices Act.\15\ Indeed, the FCC's limits are more restrictive than 
the four attempts in three weeks that the Department of Education is 
now requiring servicers to undertake to reach Direct Loan borrowers 
whose IDR applications are incomplete.
---------------------------------------------------------------------------
    \14\ Id.  18.
    \15\ See April Kuehnhoff & Margot Saunders, National Consumer Law 
Center, Debt Collection Communications: Protecting Consumers in the 
Digital Age 4 (June 2015), available at http://bit.ly/1LQxpDK.
---------------------------------------------------------------------------
    The FCC's efforts to effectively eliminate the exemption are 
contrary to Congress's clear directive in passing the Budget Act (and 
contrary to the Administration's longstanding efforts to include the 
exemption as part of the budget). In the end, the FCC's rules--if 
adopted--would hurt, rather than help, borrowers and other taxpayers.
    Congress had good reasons for adopting the TCPA in 1991, but 
preventing Federal student loan servicers such as Navient from helping 
student loan borrowers avoid delinquency and default was not one of 
them. The Budget Act's amendments to the TCPA open the door for 
servicers to help borrowers avoid delinquency and default while 
supporting responsible use of Federal taxpayer dollars. We encourage 
the Committee to keep these goals in mind as it continues to oversee 
the FCC's implementation of Section 301 of the Budget Act and the TCPA.
            Respectfully submitted,
                                           Sarah E. Ducich,
                                             Senior Vice President,
                            Public Policy and Government Relations,
                                                               Navient.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                           Hon. Greg Zoeller
    Question 1. Would a concrete standard for revocation of consent in 
the TCPA regulations, as there is for the FDCPA, FCRA, and other 
banking laws, be helpful in reducing the types of contact intended to 
be prohibited by the TCPA?
    Answer. Opting out of receiving robocalls and other unwanted 
contacts should require no more effort than pressing a button or 
telling a caller to stop calling. The FDCPA requires a consumer to 
notify a debt collector in writing that the consumer wishes the debt 
collector to cease further communication. The FCRA allows a consumer to 
opt out of certain credit offers by notifying the credit reporting 
agency in writing or via a mechanism maintained by the agency. It is 
burdensome to notify a debt collector in writing to cease 
communications, especially when the consumer is not the debtor they are 
seeking.

    Question 2. Mr. Zoeller, you and a number of other attorneys 
general sent a letter to this committee urging support for the HANGUP 
Act, arguing that it was necessary because, ``As amended, the TCPA now 
permits citizens to be bombarded by unwanted and previously illegal 
robocalls to their cell phones if the calls are made pursuant to the 
collection of debt owed to or guaranteed by the United States.'' Is 
that your understanding of what will necessarily be allowed as a result 
of the Federal Communications Commission's implementation?
    Answer. Yes, it is. The majority of debt collection complaints are 
from non-debtors who receive unwanted calls intended for other people. 
Many of these complainants report multiple calls despite informing the 
callers that they are not the debtor.

    Question 3. What are some of the benefits and challenges of moving 
forward with a mandatory reassigned numbers database?
    Answer. Benefits might include fewer calls to consumers who acquire 
numbers that formerly belonged to debtors. Challenges include the cost 
of maintaining and updating the database and protecting it from 
unscrupulous telemarketers and scammers.

    Question 4. Is there a helpful way to distinguish between random or 
sequential telemarketing calls and texts versus calls or texts to 
numbers originally provided by customers that have been subsequently 
reassigned?
    Answer. I think not, assuming both types of calls are unwelcome and 
possibly illegal.

    Question 5. Are texts less intrusive than phone calls? If so, would 
it make sense to have reduced penalties for text message violations of 
the TCPA in order to encourage contact through text messaging rather 
than phone calls?
    Answer. Anyone who has been awakened by the insistent buzzing of a 
text arriving in the middle of the night can attest that texts are not 
less intrusive than calls. Also, many people, especially those on 
discounted or pre-paid wireless plans. are charged for texts.

    Question 6. Are you aware of any negative consequences resulting 
from the Commission's 2015 Omnibus Declaratory ruling, including the 
movement of call centers overseas?
    Answer. The movement of call centers overseas was a trend long 
before 2015. As for consequences of the FCC's 2015 ruling, we would 
like to see telecommunications providers move more quickly to provide 
more extensive call-blocking services for consumers, and solutions that 
would stop illegal calls before they got through to residential lines.

    Question 7. Is there a database on which callers can reasonably 
rely that identifies numbers that have been reassigned?
    Answer. I believe there are third party providers who market this 
information, but I have not had occasion to research them.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                           Hon. Greg Zoeller
    Question 1. The FCC's 2015 order for TCPA reassigned numbers allows 
one call across an entire enterprise, even if it has multiple 
subsidiaries, before a caller can be liable for contacting a consumer. 
This is the case even though there is a no reassigned number list 
available to check, and the caller will often have no knowledge that a 
numbers has been reassigned. Is there a reason the caller should not be 
required to have ``actual knowledge'' that the called number is not 
that of the initial person? What reasonable means can a caller take to 
ensure a number has or has not been assigned?
    Answer. In its Order, the FCC noted that there are solutions in the 
marketplace to inform callers of reassigned numbers. A caller can 
easily avoid having ``actual knowledge,'' and that is why the FCC 
deemed it reasonable to assume the caller has ``constructive 
knowledge'' after one post-reassignment call. Assuming that the caller 
is a debt collector, then the caller can use a live operator to contact 
the debtor. It is only when callers attempt to contact debtors en masse 
via robocalls that they run afoul of the TCPA.

    Question 2. Throughout your written testimony, you highlight many 
negative instances of ``robocalling,'' many of which involve harassing 
telemarketing calls. I think we can all agree that we dislike 
telemarketing calls and that we would prefer that consumers not receive 
them. However, there can be uses for robocalling that can benefit 
consumers. For example, there are student loan providers and servicers 
in Nebraska who try to contact students who are at risk of defaulting 
on their student loans to help them rather than harass them. In your 
opinion, are there any times that robocalls should be permissible under 
the TCPA, such as where consumers might need or want to receive the 
calls?
    Answer. In my experience, consumers want to receive a robocall when 
school is canceled due to a snow emergency, or their prescription 
medicine is ready to be picked up at the pharmacy. Most other robocalls 
are looked upon as unwelcome, impersonal intrusions into their privacy.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Steve Daines to 
                           Hon. Greg Zoeller
    Question. I appreciate your remarks during the hearing about the 
need for policymakers to ``tighten the line of defense'' for TCPA 
litigation.
    Last month I filed an amendment to the FCC Reauthorization Act 
which would incentivize businesses to voluntarily implement compliance 
programs to govern the activities taken by the independent, third-party 
dealers and service providers. Under my amendment, if a business has 
implemented robust compliance programming then that business could 
raise evidence of these measures as an affirmative defense during a 
private right of action. This would go a long way towards clarifying 
uncertainty that has arisen regarding the attachment of vicarious 
liability--uncertainty that is inhibiting more businesses from 
implementing these highly effective compliance programs.
    If the TCPA were amended to include language that would incentive 
businesses to voluntarily implement TCPA compliance programs that would 
govern the activities of independent, third-party service providers, 
would such a modification constitute a ``better defense'' that would 
spur greater business compliance with TCPA, and fewer TCPA violations? 
Why or why not?
    Answer. In my opinion, a defense is better than an exemption. An 
affirmative defense places the burden on the business to prove it has 
complied with the law. A compliance program would be preferable to 
businesses turning a blind eye to how its third party lead generators 
are contacting consumers.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Maria Cantwell to 
                           Hon. Greg Zoeller
    Question. True Blue, a Tacoma, Washington-based company is focused 
on getting blue collar workers back to work. It matches unskilled and 
underemployed people seeking work with local businesses that have short 
medium and long term job opportunities.
    If the worker consents in writing, True Blue makes the match by 
sending a text message called a ``work alert'' to the worker giving the 
details of the job offer including wage, location and expected time 
commitment. The worker texts back yes or no depending on his or her 
interest.
    If the worker has not consented in writing to receiving ``work 
alerts'' he or she must show up at a worker recruiting center at 5 a.m. 
and wait for work.
    In 2014, a former client brought suit on behalf of a class of 
workers claiming that True Blue had been texting him and others without 
permission.
    An examination of their ``work alert'' notification system revealed 
that due to recordkeeping error, several hundred workers that had opted 
out of the ``work alert'' text notifications system continued to 
receive text messages.
    The lawsuit is still pending. But because the Telephone Consumers 
Protection Act is a strict liability statue which mandates $500 per 
text message violation, True Blue is facing a decision that could put 
potentially put it out of business.
    There are whole classes of stakeholders such as schools, non-profit 
social service agencies, medical offices, employment agencies, etc. . . 
that may reach out to their clients or customers using text messages or 
auto dialers to perform a service like remind them of medical 
appointments, inform them of job opportunities, pass on schedule 
information and give updates on available benefits or the status of 
applications.
    In some cases, these types of entities may run afoul of the 
Telephone Consumer Protection Act because of mere recordkeeping error.
    While this not desirable, it seems different than the type of harm 
that consumers experience when being bombarded with marketing materials 
from an entity trying to sell something.
    Making entities like this subject to large fines and court 
judgments doesn't seem like the result we want.
    I don't want to weaken consumer protections under Telephone 
Consumer Protection Act (TCPA) but I do want the law to direct the 
harshest penalties for the most egregious violations that impact 
consumers.
    Some state and Federal consumer protection laws have ``good faith'' 
or ``bona fide error'' exceptions. Is there a role for those types of 
exceptions to the TCPA without weakening consumer protection? If so how 
would should it be applied?
    Answer. Thank you for giving me the opportunity to respond to your 
questions.
    I do not presume to interject my opinion concerning a case that is 
currently pending before the court. I will base my response on the 
Telephone Consumer Protection Act itself, and not on any particular 
case.
    Since 1991, the TCPA has prohibited the use of automatic telephone 
dialing systems (autodialers) or artificial or prerecorded voice 
messages for calling emergency telephone lines, health care facilities 
(including patient rooms), telephone numbers assigned to wireless 
services, and services for which the consumer is charged for the call. 
In its February 2012 Report and Order, the FCC confirmed that the 
prohibition encompassed both voice calls and text messages. In re 
Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act 
of 1991, 27 FCC Rcd. 1830, 1832 (2012).
    Crafting legislation that differentiates between good and bad 
unsolicited text messages in every case will be a great challenge if 
pursued. Regardless of the content of the message or the intention of 
the sender, the harm is the same: Interruption of the consumer's day 
(or night), intrusion on the consumer's privacy and costs to consumers 
who pay for texts. Therefore, I believe that inserting ``good faith'' 
or ``bona fide error'' exceptions into the TCPA prohibitions against 
robocalls and unsolicited texts would weaken consumer protection and 
leave the TCPA vulnerable to Constitutional challenges. If the TCPA 
must be amended, it would be better to consider an affirmative defense 
option rather than an exception.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                           Hon. Greg Zoeller
    Question 1. According to the PEW Research Center, 13 percent of 
Americans with a household income under $30,000 are smartphone 
dependent. These individuals do not have the luxury of owning both a 
landline and a mobile telephone. In addition, many of these individuals 
lack Internet access. The Telephone Consumer Protection Act (TCPA) 
provides important protections to consumers to prevent them from 
receiving unwanted phone calls. This is not merely a matter of 
annoyance: low income communities who rely on cell phone service have a 
limited number of voice minutes and if they were barraged with unwanted 
calls, it could seriously impact their livelihood or even safety in the 
event of an emergency.
    Can you speak to the disparities in reliance on wireless phone 
service that exist in your state and across the country?
    Answer. I do not have any direct information about the reliance on 
wireless phone service. However we have discovered some specific data 
about Hoosier households. As of 2014, 95 percent of Hoosier households 
with annual income under $30,000 had some form of telephone service. 
(Federal Communications Commission, Universal Monitoring Service 
Report, 2015, Table 6.8).
    In 2014, approximately 47 percent of Indiana households were 
wireless-only. (U.S. Department of Health and Human Services, Centers 
for Disease Control and Prevention, National Center for Health 
Statistics, National Health Interview Survey Early Release Program, 
Table 1, Released 02/2016).

    Question 2. Do you believe that landline phones with unlimited 
minutes should have the same regulations as mobile phones, which are 
often limited in their call time?
    Answer. I believe that all telephone users are entitled to 
protection from unwanted calls, regardless of whether the phone is a 
cell phone or a landline. It is important to remember that many scams 
are conducted by contacting people over their phones. Many of our 
elderly people fall victim to scams that were initiated over a 
landline. This is why I have been calling on the major telephone 
carriers to provide call-blocking technology that would stop the mass 
amount of calls from getting through their systems and into 
individuals' landlines. The more we can stop the calls from coming 
through, the less fraud that will be perpetrated on our citizens.

    Question 3. As you know, the TCPA is a complex statute. It is my 
understanding that some stakeholders, including companies large and 
small, have found that mistakes can happen even when they recognize the 
importance of TCPA compliance to minimize consumer harm. Many of these 
businesses choose to invest in programs that help ensure compliance by 
implementing training, monitoring, and enforcement mechanisms. How can 
businesses of all sizes maximize compliance with the TCPA?
    Answer. Businesses can begin by recognizing that consumers are 
barraged with unwanted calls and scams every day, and they do not want 
to receive unsolicited calls and texts. There are many ways to ensure 
their customers do indeed want their calls, and in Indiana, companies 
are expected to comply with the requirement that customers must opt in 
to receiving such calls and texts. This is a courtesy to their 
customers who have made it known up front that they may or may not wish 
to receive such calls.

    Question 4. Do you think compliance programs are a good investment 
for companies that use third party service providers? Why or why not?
    Answer. Without knowing the cost and efficacy of the compliance 
program, I cannot make a determination. However, any process that 
reduces or eliminates calls and texts to people who do not want to 
receive them, while minimizing the potential for fines and statutory 
damages, is potentially a good investment.

    Question 5. As you know, debt collection negatively impacts many 
Americans who are already financially insecure. It is incumbent upon 
Congress to ensure that there are clear rules governing the practice of 
debt collection. Earlier this year, Senator Mike Lee and I introduced 
the Stop Debt Collection Abuse Act, which clarifies that debt buyers 
are debt collectors; expands the definition of consumer debt; and 
limits egregious fees. In addition, reports show that thirty-party debt 
collectors collecting on behalf of local and state governments have in 
some cases violated the Fair Debt Collection Practices Act. Our bill 
would address this issue by examining the use of debt collectors by 
local and state governments.
    While the Stop Debt Collection Abuse Act takes some steps at the 
Federal level to directly protect consumers, I am concerned that 
practices at the state and local level are making the situation worse. 
Can Congress address these problems at the state and local level? If 
so, how?
    Answer. Indiana's law does not distinguish between a private 
company collection action and a state or local government collection 
action. Federal involvement in this manner would be counter to what 
many states have done on their own, and if there would be additional 
Federal regulation, it must ensure it does not weaken any state's 
statute in this regard.

    Question 6. Under pressure to tighten budgets, Congress has turned 
to debt collection as a way to regain lost revenue. In October, a 
provision was tucked into must-pass budget legislation that created a 
new exemption to the TCPA. This exemption allows debt collectors 
working on behalf of the Federal Government to contact individuals 
without their consent. What precedent does this set for debt collection 
by local and state governments?
    Answer. Along with 24 of my fellow Attorneys General, I support S. 
2235, the HANGUP Act, which would eliminate the exemption allowing 
Federal debt collectors to robocall cell phones. If the exemption is 
allowed to stand, then even more erosion of consumers' protection from 
unwanted calls and texts is likely.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                            Becca Wahlquist
Preliminary comment from Ms. Wahlquist
    Thank you for the opportunity to provide further information in 
response to questions for the record. As I noted during my testimony at 
the Commerce Committee Hearing on May 18, 2016, abusive litigation 
brought under the Telephone Consumer Protection Act (``TCPA'') is 
harming American businesses that earnestly seek to comply with that 
law. Businesses large and small find themselves targeted by TCPA 
litigation designed to enrich professional TCPA plaintiffs and the 
cadre of TCPA-focused plaintiffs' lawyers who seek staggering statutory 
damages for communications not required to have caused any actual 
damage to anyone. These businesses are not engaged in the spam, 
randomly and sequentially dialed telemarketing that the TCPA was 
designed to curb.
    I hope my further discussion below of this litigation abuse can 
highlight the need for legislative action to revise antiquated 
provisions of the TCPA and factor in modern technologies (i.e., 
smartphones) that were never anticipated when the TCPA was enacted in 
1991.

    Question 1. Would a concrete standard for revocation of consent in 
the TCPA regulations, as there is for the FDCPA, FCRA, and other 
banking laws, be helpful in reducing the types of contact intended to 
be prohibited by the TCPA?
    Answer. The FCC majority's pronouncement in its July 2015 Order 
that consumers who had provided a business with prior express consent 
to make certain types of autodialed/prerecorded calls could revoke 
prior consent at any time and by any means (including informing a store 
clerk at a storefront location that consent was being revoked) has put 
American businesses in an untenable position. Businesses have no 
realistic way to collect and record such revocations. Moreover, there 
is no mention in the TCPA of revocation for a ``prior consent'', and 
thus no direction for how such a revocation should be made by a 
consumer.
    A concrete standard for revocation (such as that established in the 
FDCPA and other laws) would be helpful both to consumers and to 
businesses. Consumers would know that their revocation requests would 
be received and processed by the business, and businesses would have 
notice when revocation requests were made via the required channels. 
The standard could then require that a business process and implement 
the revocation request within a set timeframe, such as 15 days for 
calls or 3 days for text messages (which can also be stopped 
immediately through a ''STOP'' reply to a text). Consumers would have a 
means to control the communications they opt to receive from companies, 
and businesses could ensure that procedures and practices existed to 
comply with requests made in accordance with the concrete standard.
    Establishing a means and method for revocation is particularly 
important to curb litigation abuse. Since the FCC majority's order in 
July 2015, companies have found themselves being ``set up'' with 
revocation requests made in unorthodox means or with unclear language 
that would not alert a representative or an automated system that the 
consumer wishes to revoke prior express consent for certain 
communications. With a concrete standard for revocation in place, only 
those companies that ignore revocation requests made via those 
established procedures would face TCPA liability for continued 
communications placed after the time to process and implement requests 
has passed. And companies who do the right thing will have a clear 
standard to follow.

    Question 2. Attorney General Zoeller and a number of other 
attorneys general sent a letter to this committee urging support for 
the HANGUP Act, arguing that it was necessary because, ``As amended, 
the TCPA now permits citizens to be bombarded by unwanted and 
previously illegal robocalls to their cell phones if the calls are made 
pursuant to the collection of debt owed to or guaranteed by the United 
States.'' Is that your understanding of what will necessarily be 
allowed as a result of the Federal Communications Commission's 
implementation?
    Answer. I appreciated the opportunity to address the Committee on 
the TCPA and its impact on American businesses; the HANGUP Act is 
beyond the scope of my testimony, which was limited to the TCPA. As to 
the position of the Attorney General, I note that I was very encouraged 
at the hearing by Attorney General Zoeller's discussion of the need for 
TCPA affirmative defenses for companies that strive to comply with this 
law and that develop policies, procedures, and training to ensure 
compliance.

    Question 3. What are some of the benefits and challenges of moving 
forward with a mandatory reassigned numbers database?
    Answer. While a reassigned database is a good idea in theory, 
actual implementation could be challenging. For example, it is 
difficult to see how any such database could be created and maintained 
by the government absent enormous expenses of time and resources. 
Further, similar databases are being explored in the private sector.
    Importantly, a reassigned number database does not resolve all 
liability--it would do nothing to help businesses who received a 
telephone number that was wrongly-provided by a consumer from the very 
start, or whose consumers are sharing telephone numbers across family 
plans and changing phones within those plans without notice to the 
phone provider.
    What well-intentioned American businesses need is not a future and 
partial solution to TCPA litigation; companies need more immediate help 
through the implementation of affirmative defenses into Section 227(b) 
that exist already in Section 227(c)'s private right of action section, 
and through legislative clean-up of the TCPA to include provisions that 
exist in every similar Federal statute providing a private right of 
action (i.e., statute of limitation and damages caps). The final 
section of my written testimony provided earlier to the Committee 
addresses several updates to the TCPA that could provide meaningful 
reform.

    Question 4. Is there a helpful way to distinguish between random or 
sequential telemarketing calls and texts versus calls or texts to 
numbers originally provided by customers that have been subsequently 
reassigned?
    Answer. It is important to distinguish between the two types of 
calls described in this question: random and sequentional telemarketing 
calls were the intended target of Section 227(b) of the TCPA, which is 
likely why that section does not include the affirmative defenses 
provided in Section 227(c), as there would be no defense for a company 
attempting to reach its own customers at customer-provided numbers if 
the company was randomly reaching out to any and every telephone number 
generated by the kind of ATDS in use in 1991.
    On the other hand, calls or texts to customer-provided telephone 
numbers that have been reassigned to different consumers are entirely 
different. The recipient of a call or text to a customer-provided 
number includes receiving targeted communications designed to reach a 
company's actual customer. The company cannot benefit from, and would 
not want to send, such targeted messages (generally transactional and 
customer-specific information) to a wrong party.
    As to whether or how the two types of calls described in this 
question could potentially be distinguished by an entity such as a 
telephone service provider, I do not have the technical expertise to 
know whether such a distinction could be made, let alone who could make 
it. But I do know that Congress in 1991 could never have envisioned 
companies facing such staggering financial liability for reaching out, 
with modern technologies, to customer-provided numbers that the 
company, in good faith, believes are being made with that customer's 
prior express consent, to the customer's given point of contact.

    Question 5. Are texts less intrusive than phone calls? If so, would 
it make sense to have reduced penalties for text message violations of 
the TCPA in order to encourage contact through text messaging rather 
than phone calls?
    Answer. It is clear from the legislative history of the TCPA that 
text messages were not envisioned at the time it was drafted (nor could 
they be, when no cellular telephone capable of receiving a text message 
existed in 1991). Technology has advanced, and the advent of text 
messaging has provided a new and less intrusive means for 
communications. Rather than involving a series of loud rings, and the 
need for the recipient to pick up a telephone line to speak with a 
caller, a text message provides a communication that can be seen with a 
glance, at the recipient's convenience. Furthermore, companies sending 
text message communications to customers can enable systems to 
recognize a ``STOP'' reply to that text message quickly and 
efficiently, so that a consumer can easily and almost immediately stop 
further text communications if they become unwanted.
    Given the nature of text messages, and the fact that the TCPA has 
no provision addressing this type of communication that was not 
conceived of in 1991 (when even e-mail was a novel thing used by few), 
it could make sense for the TCPA to be updated to specifically address 
text messaging and whether and how penalties should apply (for example, 
if a company continues to send text messages after a customer has 
revoked prior consent). Of course, affirmative defenses should be 
provided to protect a company from staggering financial liability in 
the event of a mistake or good faith error (such as the affirmative 
defenses in Section 227(c) for violations of the Do Not Call 
provisions).
    As for a reduction in per-message potential liability for text 
messages versus telephone calls, while such a provision could make 
sense and could be implemented given the nature of text messages, the 
most important revision in terms of liability is a cap on the available 
individual and class damages available under the TCPA, as detailed in 
the written testimony I provided earlier to the Committee. Indeed, a 
per-text damages reduction, even to a number such as $25 per text 
message, does little to help a company with millions of customers when 
a class action is filed. For example, if damages were set at $25 per 
text (or 5 percent of the current per message liability), a lawsuit 
claiming that five text messages were sent over the course of a year in 
violation of the TCPA to each of a company's 20 million customer-
provided numbers would immediately put a minimum of $250 million at 
issue in a classwide litigation.

    Question 6. Are you aware of any negative consequences resulting 
from the Commission's 2015 Omnibus Declaratory ruling, including the 
movement of call centers overseas?
    Answer. While I do not have direct knowledge of the movement of 
call centers oversees in response to the July 2015 Order, I have heard 
anecdotal evidence of such events. What I can speak to, with personal 
knowledge, is the significant increase in TCPA litigation after that 
Order was issued.
    TCPA litigation is flooding and crowding Federal courts, 
threatening businesses with annihilating damages, and offering no real 
benefit to the consumers who constitute putative class members in 
actions designed to provide significant attorneys' fees to the counsel 
bringing TCPA class actions. I discuss these trends in the written 
testimony I provided in advance of the May 18, 2016, hearing.

    Question 7. Is there a database on which callers can reasonably 
rely that identifies numbers that have been reassigned?
    Answer. There are several companies within the private sector that 
are making strides towards providing solutions to companies that will 
mitigate risk of TCPA lawsuits caused by calls to reassigned telephone 
numbers. The Committee has heard of Neustar, and I am also aware of a 
newer company--Early Warning--that has developed its own solution to 
identify when a telephone number may have changed hands after being 
provided to a company. We can anticipate that private sector companies 
will continue to develop databases and tools to mitigate TCPA risks, 
and that larger businesses (in particular) will be able to contract to 
use such tools. However, it is important to note that even if every 
reassigned telephone number eventually could be flagged via such a 
solution, a business is still at risk of calling a ``wrong'' number 
because it was wrongly provided at the start by the customer (e.g., the 
customer transposes two digits, or gave a friend's number), or because 
a family plan masks the identity of the actual user of a telephone.
    I am currently defending a number of TCPA cases brought in 
circumstances in which a reassigned number database could not have been 
helpful. For example, one class action suit is headed by a mother who 
provided a company with a telephone number that was later given by her 
to her teenage daughter (who received the calls at issue); the family-
plan telephone number is owned by the mother and bills paid by the 
mother, so any search would show that number still belongs to the 
mother/customer. I am also defending a class action suit brought by 
someone whose telephone number was erroneously provided by a customer 
as her own number so that from the very start, the company had a wrong 
number that was never reassigned. Such lawsuits highlight the need for 
affirmative defenses to be added to Section 227(b) to protect companies 
who implement compliance policies, procedures, and training and who 
make communications in good faith to customer-provided numbers, as well 
as the need for caps on available damages under the TCPA for individual 
and class litigations.

    Question 8. What action could Congress or the Federal 
Communications Commission take to help callers avoid costly discovery/
litigation in cases where they have not violated TCPA?
    Answer. Congress should explore modernizing the TCPA to help 
businesses avoid costly discovery and litigation in TCPA lawsuits by 
providing affirmative defenses for Section 227(b) claims, and capping 
available statutory damages for this no-actual-harm-needed statute, as 
detailed in my previously provided written testimony. Moreover, 
Congress can make a significant difference through discovery rules on 
proportionality, so that the recipient of a single call cannot seek 
discovery into all telephone calls placed by a company within the 
previous four years, if that person's own claim can be refuted via 
discovery focused only on the call that person received.
    Congress could also help American companies by shifting some of the 
cost burdens involved in pulling class-wide discovery on millions of 
communications to the TCPA plaintiffs' firms, who are seeking that 
information in a bid to accumulate a significant enough number of at 
issue calls to force class-wide verdicts or settlements (from which 
those firms plan to seek significant fees and costs). If the person 
requesting such classwide discovery was required to pay the costs 
companies incur to accumulate and provide that information, then 
abusive litigation would be curbed and litigation more likely to have 
merit would proceed.

    Question 9. Are you aware of any small businesses that have gone 
out of business as a result of the legal fees or settlements associated 
with a TCPA litigation?
    Answer. I am personally aware of many small business whose 
existence were threatened by the TCPA. For example, one current small-
business client of mine is losing sleep over the thought that if we are 
not successful in our early defenses, it may need to bankrupt its 
business and let its six full-time employees go because of the limited 
funds it has available to defend the putative class action brought 
against it.
    Similarly, I have spoken with the owner of a Detroit company with 
thirty employees who would have had to shutter its businesses if it 
lost in a lawsuit brought for some targeted faxes it sent to its 
customer list, with a Pennsylvania family-owned plumbing company 
deciding whether it needed to bankrupt in light of similar TCPA 
litigation, and with a Florida husband-and-wife start up debating 
whether to use its entire family savings account to fund its defense of 
a TCPA suit.
    So while (thankfully) none of my small business clients have gone 
out of business as the result of TCPA litigation, given the onslaught 
of TCPA litigation and the number of small businesses targeted in such 
litigation across the country, I would not be surprised to find that 
various small companies have closed up shop when faced with the expense 
of defending TCPA litigation.

    Question 10. Are you aware of any small businesses that have gone 
out of business as a result of the legal fees or settlements associated 
with a TCPA litigation?
    Answer. I incorporate herein my response to Question 9 above.

    Question 11. In the recent CFPB Notice of Proposed rulemaking for 
arbitration, the CFPB appears to recognize the challenges small 
businesses have when faced with TCPA related class action litigation. 
In the rule they note, ``. . . the Bureau recognizes the concern 
expressed by SERs, among others, that particular statutes may create 
the possibility of disproportionate damages awards.'' Do you have 
similar concerns about how the statutory damages associated with TCPA 
litigation can threaten small businesses?
    Answer. I have long been concerned with how uncapped statutory 
damages associated with TCPA litigation can threaten small businesses; 
as I noted in response to Question 9 above, I have spoken with various 
small business owners whose first knowledge of the TCPA came through 
service of a class action complaint seeking damages that would bankrupt 
even a larger and established company. I have one client accused of 
sending a single text message to 64,000 persons without prior consent 
(despite the company's belief that it was sending that text only to 
people who had affirmatively asked for that message). That single 
transmission has led to a putative class action suit seeking $96 
million in trebled damages available under the TCPA (even though this 
class action is the only complaint that was filed regarding that single 
text message).
    With the uncapped statutory damages available under the TCPA, a 
transmission of 5,000 facsimiles sent in a targeted advertising 
campaign by a small business (many of which transmissions were received 
as e-mails via the recipient's fax server) would, for example, lead to 
a minimum of $2.5 million in TCPA damages. This is a staggering amount 
of liability for a small business to face. Given such numbers, small 
American businesses are forced into hefty individual settlements with 
putative class representatives in order to avoid the costs of defense 
and the risks of annihilating damages-settlements that alone, even at 
``small'' amounts such $25,000, are enough to threatened the continued 
growth and success of that business.
    Thus, the legislative revisions I outlined in my original written 
testimony are needed for small American businesses as much as they are 
needed for the larger companies often targeted by TCPA suits.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Deb Fischer to 
                            Becca Wahlquist
    Question. The FCC's 2015 order for TCPA reassigned numbers allows 
one call across an entire enterprise, even if it has multiple 
subsidiaries, before a caller can be liable for contacting a consumer. 
This is the case even though there is a no reassigned number list 
available to check, and the caller will often have no knowledge that a 
numbers has been reassigned. Is there a reason the caller should not be 
required to have ``actual knowledge'' that the called number is not 
that of the initial person? What reasonable means can a caller take to 
ensure a number has or has not been assigned?
    Answer. The FCC majority's 2015 Order did businesses no favor in 
providing a safe harbor under Section 227(b) of a single call for 
businesses who believe they are reaching out to a customer, but who 
instead are unknowingly contacting a different person because a 
telephone number was reassigned or wrongly provided in the first place. 
I believe that the FCC thought that this single call exemption would 
mirror the one-call safe harbor provision in Section 227(c), in which 
the statute itself makes clear that a person must receive two calls 
placed in violation of Do Not Call rules before being able to bring a 
private action under that section of the TCPA for all but the first 
call. But when it comes to Section 227(c), companies have a Federal Do 
Not Call list and their own internal Do Not Call lists to check 
against, and thus are on notice as to what numbers cannot receive 
telemarketing calls. This ``one free call'' actually provides for a 
single mistaken call (made despite DNC list membership) before 
litigation can be brought.
    However, as to Section 227(b), and texts or calls that are 
autodialed/prerecorded and placed to cellular phones, a company has no 
guarantee that a phone number provided by its customer remains in 
possession of, or is primarily used by, that customer. So the ``one 
free call'' doesn't provide leniency for a single mistake; while there 
might be an indication from that single call that the telephone number 
no longer belongs to the intended recipient (i.e., someone answers and 
informs the caller that it is a wrong number), in most circumstances 
the company will learn nothing from that call that would provide notice 
that the telephone number has changed. Thus, actual knowledge of 
reassignment should be required before a caller can be held liable 
under the TCPA for making additional calls to a reassigned number.
    Knowledge cannot be presumed, and the FCC majority recognized that 
it will be impossible for businesses to know to a certainty that a 
telephone number has been reassigned simply from calling that number, 
instead noting in its July 2015 Order several ``indicators'' that could 
be helpful in learning of a reassignment. But my experience with 
companies doing their best to comply with the TCPA, and who only reach 
out to their own customers, is that often these indicators (i.e., a 
voice-mail providing a different person's name than the customer in its 
greeting) are not present.
    I note that most businesses do contractually require customers to 
update their contact information if it should change, but there is no 
way to ensure that customers will do so. And the FCC's ``solution'' to 
the fact that a company often cannot know when a number has changed is 
no solution at all: in footnote 302 of the July 2015 Order, the FCC 
opines that American businesses calling a wrong number because a 
customer did not update its information should consider suing those 
customers. See In re Matter of Rules and Regulations Implementing the 
Tel. Consumer Prot. Act of 1991, 30 F.C.C.Rcd. 7961, n. 302 (2015) 
(``The failure of the original consenting party to satisfy a 
contractual obligation to notify a caller about such a change does not 
preserve the previously existing consent to call that number, but 
instead creates a situation in which the caller may wish to seek legal 
remedies for violation of the agreement.''). This is hardly a consumer-
friendly approach to the problems of TCPA litigation abuse.
    So, the problem is that there is no way to guarantee that a 
customer-provided telephone number has not changed hands (particularly 
when it is passed from one family member to another in a group-paid 
family plan). The ``one call'' safe harbor provides no real protection. 
American businesses are left without any reasonable method to avoid 
TCPA liability, further highlighting the need for specific affirmative 
defenses within Section 227(b) that would protect good-faith callers 
who implement compliance policies, procedures, and training, as 
detailed in my written testimony provided in advance of the May 18, 
2016, hearing.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                            Margot Saunders
    Question 1. Would a concrete standard for revocation of consent in 
the TCPA regulations, as there is for the FDCPA, FCRA, and other 
banking laws, be helpful in reducing the types of contact intended to 
be prohibited by the TCPA?
    Answer. It would certainly be helpful for consumers to be provided 
with notice of their right to cancel, or revoke consent under the TCPA. 
The FDCPA does not have a right to cancel or revoke consent. It does 
provide consumers with the right to cease communications, under 15 
U.S.C. Sec. 1692c(c). That right is helpful, but not as valuable as one 
might think because (a) consumers are not provided notice of this 
right, and (b) consumers are often afraid to request that all 
communication cease because they fear that such a request will spur 
litigation.
    The FDCPA also provides consumers with a right to be free from 
communications which are at ``inconvenient'' times pursuant to 15 
U.S.C. Sec. 1692c(a). This right does not require a written notice from 
the consumer for it to be exercised and is generally interpreted as 
providing a bright-line test for collectors on when not to call 
consumers.
    The FCRA does not have a revocation of consent requirement of which 
I am aware.

    Question 2. Attorney General Zoeller and a number of other 
attorneys general sent a letter to this committee urging support for 
the HANGUP Act, arguing that it was necessary because, ``As amended, 
the TCPA now permits citizens to be bombarded by unwanted and 
previously illegal robocalls to their cell phones if the calls are made 
pursuant to the collection of debt owed to or guaranteed by the United 
States.'' Is that your understanding of what will necessarily be 
allowed as a result of the Federal Communications Commission's 
implementation?
    Answer. The Federal Communications Commission is in the midst of a 
rulemaking on exactly this issue. Based on the proposals articulated in 
its Advance Notice of Proposed Rulemaking, we are hopeful that the 
final regulations will only permit a limited number of calls to debtors 
who have not consented, and that the consumer will have the right to 
stop unwanted calls. But we will not know what the limitations on the 
calls will be, if any, until the final regulations are promulgated.

    Question 3. What are some of the benefits and challenges of moving 
forward with a mandatory reassigned numbers database?
    Answer. The industry of callers has professed difficulties 
complying with the FCC's 2015 Omnibus Order because they say there is 
no reasonable way for them to know when the phone numbers have been 
reassigned to new people. The chief benefit of a mandatory reassigned 
numbers database is that it would provide a near-perfect way for 
callers to determine which numbers have been reassigned since they 
obtained consent to call those numbers.
    A database would be fully accurate and relatively inexpensive to 
operate and access by the caller if it has the following components:

  1.  All cell phone providers would be required to participate.

  2.  Each cell phone provider would give timely information about all 
        cell phone numbers under its control for which there is a 
        change in ownership.

  3.  The information provided to the database would simply be--on each 
        reporting date--any telephone number that had been returned to 
        the cell phone company (because it was dropped or abandoned or 
        terminated) since the previous reporting date.

  4.  The providers would submit these reports within a short time--
        likely one or two one days--from the date that the number was 
        dropped.

  5.  Callers could access the database easily online and simply query: 
        ``For telephone number XYZ, when was the last time it changed 
        ownership?'' There would be no big data dump from the database, 
        just the simple answer to the question, which would be along 
        the following lines: ``Number XYZ most recently changed 
        ownership on ABC date.''

  6.  The fees charged to callers for accessing the information in the 
        database would pay for the maintenance of the database.

    The challenge to a fully effective database is simply having all of 
the cell phone companies agree to establish such a database and 
participate in it.
    The reassigned number problem need not really be a problem. A 
relatively simple solution is within reach.

    Question 4. Is there a helpful way to distinguish between random or 
sequential telemarketing calls and texts versus calls or texts to 
numbers originally provided by customers that have been subsequently 
reassigned?
    Answer. I am not sure that there is. This question seems to be 
mixing apples and oranges. Whether callers are calling random or 
sequential numbers goes to the issue of whether their calling 
methodologies meet the coverage requirements under the TCPA because the 
automatic dialing system used has that capacity (under 47 U.S.C. 
Sec. 227(a)). The issue of whether of number has been reassigned goes 
to whether the person who receives the call has provided consent to be 
called, as is required if the call is made to a cell phone and is not 
for an emergency purpose (under 47 U.S.C. Sec. 227(b)(1).

    Question 5. Are texts less intrusive than phone calls? If so, would 
it make sense to have reduced penalties for text message violations of 
the TCPA in order to encourage contact through text messaging rather 
than phone calls?
    Answer. There are some minimal differences between the two, but 
texts are invasive of consumers' privacy just as calls are. We do not 
think there should be different standards.

    Question 6. Are you aware of any negative consequences resulting 
from the Commission's 2015 Omnibus Declaratory ruling, including the 
movement of call centers overseas?
    Answer. I am not aware of any negative consequences.

    Question 7. Is there a database on which callers can reasonably 
rely that identifies numbers that have been reassigned?
    Answer. My understanding is that there are several databases and 
other programs in the marketplace that either specifically provide the 
answer to the question of whether the number is reassigned, or provide 
other assistance to callers on this issue. Just a few of these examplse 
include:

   Early Warning, a data exchange company,\1\ whose website 
        indictates that this company runs a database that can be 
        accessed by callers to determine the status of each of the 
        numbers they want to call.
---------------------------------------------------------------------------
    \1\ For more information, see Early Warning's website at http://
www.earlywarning.com/about-us.html.

   Another company appears to be Do-Not-Call-Protection,\2\ 
        which promises to help callers ensure they are calling the 
        parties that provided consent.
---------------------------------------------------------------------------
    \2\ http://www.donotcallprotection.com/blog/reassigned-numbers-
right-party-verification-tcpa.

   A company called Payfone \3\ also offers a ``solution 
        [which] applies custom logic to the 8 million+ daily phone 
        number and mobile operator change events in order to determine 
        whether or not phone number ownership has changed.'' \4\
---------------------------------------------------------------------------
    \3\ http://www.payfone.com/numberverification/
    \4\ Id.

   Neustar indicates that it provides solutions for TCPA 
        potential liability by providing access to ``Neustar's 
        unparalleled phone data repository. The solution provides users 
        with the most accurate, comprehensive and up-to-date consumer 
        and business data in the industry--updated every 15 minutes 
        from over 250 sources, including the Nation's leading 
        telecommunications service providers.'' \5\
---------------------------------------------------------------------------
    \5\ https://www.neustar.biz/resources/whitepapers/understand-tcpa-
law-and-mitigate-risk.

    However, the best option to protect callers from liability for 
calling reassigned numbers would be for a database to be established in 
which all cell phone providers are required to participate. (Please see 
my answer to Chairman Thune's question # 3 on this point.)
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                            Margot Saunders
    Question 1. In your testimony, you state that ``Congress 
deliberately created statutory penalties in the TCPA to ensure 
compliance.'' You also mention that these unwanted calls are 
increasing. Do you have data to indicate the amount of fines and awards 
that have been collected as a result of the increase in unwanted calls?
    Answer. I do not have specific data on the amount of fines and 
awards collected as the result of the increase in unwanted calls. I 
know that even as industry is complaining about TCPA litigation, the 
number of unwanted calls is increasing. This is evident from the 
escalating number of complaints to government agencies about these 
unwanted calls. As I said in my updated testimony: an average of 
184,000 complaints were made to the Federal Trade Commission (FTC) 
every month in 2015 about robocalls.\6\ The problem of unwanted 
robocalls is escalating: the FTC reported more than 2.2 million 
complaints about unwanted robocalls in 2015--over two and a half times 
as many complaints as there were in 2010.\7\ More than half of these 
calls occurred after the consumer had already requested that the 
company stop calling.\8\ Indeed, in the first four months of 2016, the 
complaint numbers have spiked again, increasing to an average of over 
279,000 a month, which will produce a yearly rate of over 3.3 million 
complaints.\9\
---------------------------------------------------------------------------
    \6\ Federal Trade Commission, National Do Not Call Registry Data 
Book, FY 2015, at 5 (Nov. 2015).
    \7\ Id. at 4.
    \8\ Id. at 5.
    \9\ The 2016 figures for robocall complaints to the FTC's Do Not 
Call Registry were supplied by the FTC's Bureau of Consumer Protection 
on May 12, 2016. The 2016 annualized complaint data was determined by 
averaging the total complaints received in the first four months and 
then multiplying that monthly average by twelve.
---------------------------------------------------------------------------
    So it seems that even though the litigation is increasing, and more 
fines and awards have been collected, these are still not sufficient to 
provide incentives to the calling industry to comply with consumers' 
wishes to be free from these unwanted robocalls.

    Question 2. Throughout your written testimony, you highlight many 
negative instances of ``robocalling,'' many of which involve harassing 
telemarketing calls. I think we can all agree that we dislike 
telemarketing calls and that we would prefer that consumers not receive 
them. However, there can be uses for ``robocalling'' that can benefit 
consumers. For example, there are student loan providers and servicers 
in Nebraska who try to contact students who are at risk of defaulting 
on their student loans to help them rather than harass them. In your 
opinion, are there any times that robocalls should be permissible under 
the TCPA, such as where consumers might need or want to receive the 
call?
    Answer. Robocalls are entirely legal once the consumer has 
consented to receive them. 47 U.S.C. Sec. 227(b)(1)(A). Moreover, 
according to the student loan servicing industry, over 90 percent of 
student loan debtors have consented to receive these calls.\10\ Student 
loan servicers wishing to call the debtors for whom they do not have 
consent should manually dial these consumers until they receive 
consent. If the servicing industry believes that the calls will be so 
helpful to consumers, then it is their job to reach out to them. 
However, they should do so in accordance with the TCPA. There is no 
inherent right for callers to use autodialers or prerecorded voice 
messages.
---------------------------------------------------------------------------
    \10\ See Comments of Navient Corporation to the Federal 
Communications Commission, June 6, 2016 at 6, available at https://
ecfsapi.fcc.gov/file/60002098245.pdf. (``We already have consent to 
autodial nine out of 10 of the Federal student loan borrowers whose 
loans we service today, . . ..'')
---------------------------------------------------------------------------
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Steve Daines to 
                            Margot Saunders
    Question 1. Today's students are graduating college with more debt 
than ever. Some of them go out into the workforce and forget about 
their student loans, or ignore them because they think they can't 
afford the payments. Because of the TCPA, loan servicing companies are 
not able to call the students to help them with a payment plan and 
unfortunately some end up defaulting on their loans. When the students 
default on their loans and ask ``why didn't someone call me''--what can 
we tell them? Is there any middle ground that can be reached that 
allows us to help our students without opening up the flood gates for 
unwanted calls?
    Answer. Robocalls are entirely legal once the consumer has 
consented to receive them. 47 U.S.C. Sec. 227(b)(1)(A). Moreover, 
according to the student loan servicing industry, over 90 percent of 
student loan debtors have consented to receive these calls.\11\ Student 
loan servicers wishing to call the debtors for whom they do not have 
consent should manually dial these consumers until they receive 
consent. If the servicing industry believes that the calls will be so 
helpful to consumers, then it is there job to reach out to them. 
However, these should do so in accordance with the TCPA. There is no 
inherent right for callers to use autodialers or prerecorded voice 
messages.
---------------------------------------------------------------------------
    \11\ See Comments of Navient Corporation to the Federal 
Communications Commission, June 6, 2016 at 6, available at https://
ecfsapi.fcc.gov/file/60002098245.pdf. (``We already have consent to 
autodial nine out of 10 of the Federal student loan borrowers whose 
loans we service today, . . ..'')
---------------------------------------------------------------------------
                                 ______
                                 
   Response to Written Question Submitted by Hon. Maria Cantwell to 
                            Margot Saunders
    Question. True Blue, a Tacoma, Washington based company is focused 
on getting blue collar workers back to work. Its matches unskilled and 
underemployed people seeking work with local businesses that have short 
medium and long term job opportunities.
    If the worker consents in writing, True Blue makes the match by 
sending a text message called a ``work alert'' to the worker giving the 
details of the job offer including wage, location and expected time 
commitment. The worker texts back yes or no depending on his or her 
interest.
    If the worker has not consented in writing to receiving ``work 
alerts'' he or she must show up at a worker recruiting center at 5 a.m. 
and wait for work.
    In 2014, a former client brought suit on behalf of a class of 
workers claiming that True Blue had been texting him and others without 
permission.
    An examination of their ``work alert'' notification system revealed 
that due to recordkeeping error, several hundred workers that had opted 
out of the ``work alert'' text notifications system continued to 
receive text messages.
    The lawsuit is still pending. But because the Telephone Consumers 
Protection Act is a strict liability statue which mandates $500 per 
text message violation, True Blue is facing a decision that could put 
potentially put it out of business.
    There are whole classes of stakeholders such as schools, non-profit 
social service agencies, medical offices, employment agencies, etc. . . 
that may reach out to their clients or customers using text messages or 
auto dialers to perform a service like remind them of medical 
appointments, inform them of job opportunities, pass on schedule 
information and give updates on available benefits or the status of 
applications.
    In some cases, these types of entities may run afoul of the 
Telephone Consumer Protection Act because of mere recordkeeping error.
    While this not desirable, it seems different than the type of harm 
that consumers experience when being bombarded with marketing materials 
from an entity trying to sell something.
    Making entities like this subject to large fines and court 
judgments doesn't seem like the result we want.
    I don't want to weaken consumer protections under Telephone 
Consumer Protection Act (TCPA) but I do want the law to direct the 
harshest penalties for the most egregious violations that impact 
consumers.
    Some state and Federal consumer protection laws have ``good faith'' 
or ``bona fide error'' exceptions. Is there a role for those types of 
exceptions to the TCPA without weakening consumer protection? If so how 
would should it be applied?
    Answer. I understand the frustration that one might feel if the 
facts of the case were as has been explained to you, and your 
recommendation for a good faith defense. But we investigated this case, 
and the allegations in the complaint are that the consumer was texted 
seven times a day for multiple days, that he repeatedly requested True 
Blue to stop the texts, but it refused. He even went into a branch 
location and was told they can't stop the texts.
    Here is a record of the dates and times of the texts that the 
consumer received, after the consumer had repeatedly requested that 
they be stopped:

        Defendants continued to repeatedly text Plaintiff on his 
        cellular telephone ending in 3379 again on May 5, 2014 (6:32 
        a.m., 9:20 a.m., 12:24 p.m., 3:30 p.m., 4:28 p.m., 6:40 p.m., 
        and 6:42 p.m.), May 6, 2014 (8:07 a.m., 8:15 a.m., 8:15 a.m., 
        10:37 a.m., 11:03 a.m., 12:30 p.m., and 12:52 p.m.), May 7, 
        2014 (5:27 a.m., and 1:23 p.m.), May 8, 2014 (6:15 a.m., 9:12 
        a.m., 2:50 p.m., 2:58 p.m., 3:51 p.m., 3:52 p.m., and 4:09 
        p.m.), May 9, 2014 (5:32 a.m., 7:30 a.m., 8:32 a.m., 11:20 
        a.m., 1:17 p.m., 1:19 p.m., and 3:10 p.m.), May 10, 2014 (1:44 
        p.m.), May 12, 2014 (5:43 a.m., 8:29 a.m., 10:55 a.m., 1:23 
        p.m., 2:01 p.m., 2:14 p.m., and 5:09 p.m.), May 13, 2014 (9:53 
        a.m., 9:55 a.m., 1:53 p.m., and 3:34 p.m.), May 14, 2014 (8:38 
        a.m., 8:38 a.m., and 9:00 a.m.), May 15, 2014 (8:12 a.m., 8:28 
        a.m., 8:29 a.m., 9:32 a.m., 9:49 a.m., and 9:52 a.m.), and May 
        16, 2014 (9:05 a.m., 9:57 a.m., 10 a.m., and 4:16 p.m.).

    The problem is that it is simply too inexpensive to make these 
calls and texts. This means that any human intervention, such as going 
into the system to cancel the calls or texts to a particular phone 
number costs more money than simply continuing the calls or texts, even 
when the person receiving the calls has repeatedly asked for them to be 
stopped. The point of the strict liability standard in the TCPA is to 
create incentives for businesses to pay attention to these issues, so 
that the unwanted calls and texts are stopped.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                            Margot Saunders
    Question. Ms. Saunders, I have been very active in pushing the FCC 
and carriers to identify solutions and aggressively move forward to end 
the problems with rural call completion. I am glad to have a commitment 
from Chairman Thune to markup my Improving Rural Call Quality and 
Reliability Act of 2015 soon. I find a striking similarity between the 
bad actors placing robocalls and the bad actors that are not completing 
calls to rural areas. In both cases fraudsters are constantly finding 
new ways to exploit consumers. Our laws must ensure consumers' phones 
ring when they need it and silent when they want privacy. What policies 
or actions do you believe will be the most effective in getting ahead 
of fraudsters?
    Answer. At this point, we think the most important step that can be 
taken is to require the telephone companies to employ technologies that 
eliminate caller id-spoofing. That single requirement--if sufficiently 
well enforced--will, we believe stop much of the fraud occurring over 
the telephone lines. There are good bills pending in both the House and 
the Senate that we believe will accomplish this. Senator Schumer's 
bill: S. 3026--ROBOCOP Act is the Senate bill and H.R. 4932 is the 
equivalent House bill on the same subject.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                            Margot Saunders
    Question 1. As you know, debt collection negatively impacts many 
Americans who are already financially insecure. It is incumbent upon 
Congress to ensure that there are clear rules governing the practice of 
debt collection. Earlier this year, Senator Mike Lee and I introduced 
the Stop Debt Collection Abuse Act, which clarifies that debt buyers 
are debt collectors; expands the definition of consumer debt; and 
limits egregious fees. In addition, reports show that thirty-party debt 
collectors collecting on behalf of local and state governments have in 
some cases violated the Fair Debt Collection Practices Act. Our bill 
would address this issue by examining the use of debt collectors by 
local and state governments.
    While the Stop Debt Collection Abuse Act takes some steps at the 
Federal level to directly protect consumers, I am concerned that 
practices at the state and local level are making the situation worse. 
Can Congress address these problems at the state and local level? If 
so, how?
    Answer. We very much appreciate your introduction of the Stop Debt 
Collection Abuse Act, and we share your concern about abuses at the 
state and local level. We see no legal reason why the language in your 
bill should not be made equally applicable to debts owed state and 
local governments. So long as the collectors of those state and local 
debts use the instrumentalities of commerce (telephone, the Internet or 
the U.S. Postal Service) to collect the debt, then it would be legal 
and constitutional for the Federal Government to regulate these 
activities.\1\
---------------------------------------------------------------------------
    \1\ The Commerce Clause justifies Congress in exercising 
legislative power over certain state and local activities under Article 
1, Section 8, Clause 3 of the U.S. Constitution. The Supreme Court's 
landmark decision in United States v. Lopez, 514 U.S. 549, (1995), 
definitively identifies and describes ``three broad categories of 
activity that Congress may regulate under its commerce power.'' Lopez, 
514 U.S. at 558. (channels of interstate commerce; instrumentalities of 
interstate commerce, or persons or things in interstate commerce; and 
those activities having a substantial relation to interstate commerce).
    As supported by a number of Supreme Court decisions, 
``Congressional power to regulate the channels and instrumentalities of 
commerce includes the power to prohibit their use for harmful purposes, 
even if the targeted harm itself occurs outside the flow of commerce 
and is purely local in nature.'' United States v. Ballinger, 395 F.3d 
1218, 1226 (11th Cir. 2005) (emphasis added); see e.g., Lopez, 514 U.S. 
at 558-59. For example, see United States v. Robinson, 62 F. 3d 234, 
(8th Cir. 1995), where the Eighth Circuit held that the Federal 
carjacking statute, 18 U.S.C. Sec. 2119, dealt with an ``item of 
interstate commerce,'' and thus did not require a separate showing of 
effect on interstate commerce. Robinson, 62 F. 3d at 236-37.
    Courts have interpreted ``instrumentalities of interstate 
commerce'' to include things like the telephone, the Internet, and the 
U.S. Postal Service. See e.g., United States v. Pipkins, 378 F.3d 1281, 
1295 (11th Cir. 2004) (naming ``pagers, telephones, and mobile phones'' 
as instrumentalities of interstate commerce); United States v. Panfil, 
338 F.3d 1299, 1300 (11th Cir. 2003) (referring to the Internet as an 
``instrument of interstate commerce''); American Library Ass'n v. 
Pataki, 969 F. Supp. 160, 173 (S.D.N.Y. 1997) (analyzing the interstate 
and economic nature of the Internet and concluding that it is an 
instrumentality of interstate commerce); United States v. Riccardelli, 
794 F.2d 829, 831 (2nd Cir. 1986) (explaining that ``[u]se of the 
United States mails, whether to mail a letter across the street or 
across the nation'' has historically been recognized as an 
``exclusively Federal instrumentality''). Under the second category of 
activity that Congress may regulate under its commerce power, a 
telephone or the Internet is still recognized as an ``instrumentality 
of interstate commerce'' even if it is not used to communicate across 
state lines. Lopez 514 U.S. at 558. Accordingly, if instrumentalities 
of interstate commerce (such as the telephone, the internet, or the 
U.S. Postal Service) are used even purely intrastate by state and local 
debt collectors to collect debt owed to state and local governments, 
then the Federal Government could still constitutionally regulate such 
activities under the Stop Debt Collection Abuse Act.

    Question 2. Under pressure to tighten budgets, Congress has turned 
to debt collection as a way to regain lost revenue. In October, a 
provision was tucked into must-pass budget legislation that created a 
new exemption to the TCPA. This exemption allows debt collectors 
working on behalf of the Federal Government to contact individuals 
without their consent. What precedent does this set for debt collection 
by local and state governments?
    Answer. It does not set any precedent for the debt collection 
activities of debts owed to local and state governments. The Budget Act 
amendments only provided an exemption from the requirement for 
robocalls to cell phones to have consent for calls to collect debts 
owed to or guaranteed by the Federal Government. All other debt 
collection calls--whether owed for private debt or owed to state or 
local governments--are still subject to the requirements of the 
Telephone Consumer Protection Act that non-emergency calls robocalls to 
cell phones are only legal if the caller has consent to call the cell 
phone from the owner or the user of the cell phone.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                             Richard Lovich
    Question 1. Would a concrete standard for revocation of consent in 
the TCPA regulations, as there is for the FDCPA, FCRA, and other 
banking laws, be helpful in reducing the types of contact intended to 
be prohibited by the TCPA?
    Answer. A clearly articulated standard for when consent is 
considered to have been revoked is sorely lacking in the current 
application of the TCPA. This goes hand in hand with a severely lacking 
definition of ``prior express consent'' itself. The less ambiguity in 
the statute, the less likely it will be for well-meaning entities such 
as health care providers to run afoul of the law. For example, 
currently if a number whose owner originally granted consent is 
transferred, the health care provider attempting to fulfill its 
statutory and regulatory duty to follow up with patients, remind them 
of appointments and follow-ups, and provide information on prescription 
readiness, will be completely unaware of that transfer. The FCC's 
current interpretation allows the caller only one call to the 
reassigned number. Even if that call is not connected or if the 
information concerning transfer is not obtained, the next innocent call 
is actionable.
    Also, in order to clearly define when ``prior express consent'' is 
revoked, one must determine from whom it was originally obtained. Under 
the FCC's 2015 TCPA decision, an incapacitated patient whose consent is 
obtained from a family member may have that consent revoked immediately 
upon his becoming capable of responding. This may not be the most 
opportune time for a care giver to obtain consent or inquire whether 
consent has been withdrawn, as the person is recovering from a serious 
condition. This is what makes healthcare providers and their related 
entities unique in this movement to clarify the TCPA. The healthcare 
context, the TCPA issues, and specifically the issue of consent is 
directly related to the ability of the patient to communicate. It is 
thus impacted by the health of the patient and the ability of the 
provider to provide adequate care.
    Concrete standards for both consent and revocation also allow the 
hospital to develop and articulate protocols to avoid running afoul of 
the law. Violation in this regard should have an intent component in 
order not to penalize otherwise innocent callers. As you may recall 
from my testimony, the Affordable Care Act requires providers to follow 
up with patients and provide adequate health information to cut down on 
readmissions. In addition, regulations applicable to charitable 
hospitals require communication of eligibility for rate discounts. 
These statutory and regulatory requirements cannot be effectively met 
without posing an unreasonable risk of liability for violation of the 
Act.
    With clear standards for revocation, the number of unwanted 
contacts will be significantly decreased as the hospital has absolutely 
no interest, either medically or economically, in contacting people it 
has not treated. Hospitals do not recruit people to be sick nor do they 
attempt to worsen health conditions in order to get more business. This 
again sets them apart from enterprises who use robocalls for the 
purposes the Act was originally targeting.

    Question 2. Attorney General Zoeller and a number of other 
attorneys general sent a letter to this committee urging support for 
the HANGUP Act, arguing that it was necessary because, ``As amended, 
the TCPA now permits citizens to be bombarded by unwanted and 
previously illegal robocalls to their cell phones if the calls are made 
pursuant to the collection of debt owed to or guaranteed by the United 
States.'' Is that your understanding of what will necessarily be 
allowed as a result of the Federal Communications Commission's 
implementation?
    Answer. The Bipartisan Budget Agreement of 2015 provision that 
allows the use of robocalls to collect debts owed to or guaranteed by 
the Federal Government illustrates the shortcomings of the TCPA as 
applied in the modern world. If it makes sense in the area of federally 
backed debt it makes even more sense in the healthcare sector where 
compliance with the TCPA as currently articulated is a tremendous 
financial burden that takes precious resources away from patient care. 
If Congress felt that it was important enough to protect Federal debt 
calls, is it even arguable that the health of Americans is equally if 
not more important?
    The provision provides for an economical and efficient way to 
communicate essential information to help citizens concerning their 
student loans, tax, and other Federal debt. Based on available data, 
the amendment should not create a significant number of additional 
calls along the lines being forecast by opposition groups.
    Information aids those affected. If the provision were expanded to 
health care providers and their related entities, the rights and needs 
of patients would be significantly increased and strengthened.

    Question 3. What are some of the benefits and challenges of moving 
forward with a mandatory reassigned numbers database?
    Answer. The benefits here are clear for callers who are statutorily 
mandated to make such calls and who face high penalties if they 
innocently call a number on which they previously obtained consent.
    Healthcare entities fulfilling their legal obligation to provide 
essential health related information to a patient are exposed to great 
liability when the patient from whom they obtained consent for cell 
phone communication no longer has the number assigned to them. There is 
currently no effective way for the health care provider community to 
know of the transfer.
    The regulatory scheme currently grants one free call attempt. If 
that call is unproductive in obtaining the information that the number 
has been reassigned, the patient the hospital is seeking to reach will 
be deprived of the essential information to maintain health.
    In addition to this direct negative patient impact, the current 
language of the statute and its regulatory interpretation is an open 
invitation to costly litigation. The person to whom a number is 
transferred has no legal obligation at any time to inform the hospital 
that the number has been transferred and that no consent has been 
granted post transfer. Because of the FCC's decision, the recipient of 
the transferred number can continue to receive calls meant for patient 
care and information, not inform the hospital of the transfer, and sue 
for each call after the first one.
    The ability to reference a reassigned numbers database will help 
reduce the potential for caregivers to be exposed to TCPA liability for 
seeking to help patients.
    It is anticipated that privacy issues will be advocated by 
opponents to this solution. However, either the TCPA has to be amended 
and overhauled or an effective way for care givers to determine 
reassignment must be provided. Otherwise, the Act is nothing more than 
a full employment bill for the plaintiff's bar.

    Question 4. Is there a helpful way to distinguish between random or 
sequential telemarketing calls and texts versus calls or texts to 
numbers originally provided by customers that have been subsequently 
reassigned?
    Answer. A simple approach is to require the caller to give notice 
that the call is for a legitimate purpose, much like the notice 
requirement under the FDCPA. The FDCPA provides language indicating 
that if you are not the debtor please disregard the call and that the 
purpose of the call is the collection of a debt. Adopting similar 
language for the TCPA would protect the consumer who receives a 
reassigned number to know immediately not take the call or delete the 
text.

    Question 5. Are texts less intrusive than phone calls? If so, would 
it make sense to have reduced penalties for text message violations of 
the TCPA in order to encourage contact through text messaging rather 
than phone calls?
    Answer. Like e-mails or paper mail, a text message can be 
completely ignored and easily deleted once the recipient determines it 
is of no interest or is not directed at them. They are read at the 
recipient's convenience and are easily deleted. Thus any sanction for 
an innocently sent text in furtherance of the hospital's duty to 
communicate with a patient should not be sanctioned.

    Question 6. Are you aware of any negative consequences resulting 
from the Commission's 2015 Omnibus Declaratory ruling, including the 
movement of call centers overseas?
    Answer. The negative aspect of the ruling is in its failure to take 
significant action to protect healthcare providers. The request was to 
exempt healthcare related entities from the reach of the Act. Instead 
the ruling failed to do so, only providing a very narrow exemption that 
is difficult to meet and may exclude certain healthcare related 
entities. Thus having been requested to make the change and failing to 
do so, the FCC has handed the plaintiff's bar another weapon. That FCC 
refusal to exempt the healthcare community endorses frivolous lawsuits 
against healthcare providers. It establishes that hospitals are to be 
lumped together with the worst element of telemarketing.
    In addition, the overbroad interpretation of ``automatic telephone 
dialing system,'' failure to address the need for a more concrete 
definition of ``prior express consent,'' unworkable standard for 
addressing calls to reassigned numbers, lack of an intent element to 
acts violating the Act, and the clear lack of investment by the FCC in 
the needs of the healthcare community are all negative consequences of 
the ruling.
    Healthcare entities continue to run the risk of costly litigation 
in fulfillment of their statutory and regulatory duties. This imposes a 
tremendous economic burden on the healthcare industry as time, money 
and energy has to be expended whether the litigation is valid or not. 
Instead of being able to take advantage of technology, hospitals must 
make decisions as to how to allocate resources. Every dollar spent, 
every minute expended in defending frivilous lawsuits or in not using 
autodialers, is a dollar and a minute not spent on patient care. Those 
dollars add up to thousands if not millions and those minutes trun into 
hours, weeks, days and longer.
    The ruling also failed to require the recipient of a reassigned 
number to notify the caller of the reassignment. This results in the 
recipient being able to simply allow the caller to continue to call, 
not tell them of the reassignment, and then sue on each violation for 
each call after the first.

    Question 7. Is there a database on which callers can reasonably 
rely that identifies numbers that have been reassigned?
    Answer. We are not aware of any such databases.

    Question 8. Why can't callers simply rely on consent?
    Answer. ``Prior express consent'' has never been defined, and no 
uniform standard has been developed. As applied to health care 
providers, consent seems like an easy thing to obtain but as with all 
areas of human endeavor circumstances arise making it difficult.
    One issue is who can provide consent. According to the FCC, if a 
patient is incapacitated and his family member provides consent, such 
consent is revoked upon the patient's return to capacity. This recovery 
may not occur while the patient is still in the hospital.
    A second issue involvesthe multilingual American patient 
population. Does the consent form have to be printed in all available 
languages? Does an interpreter need be provided to explain the consent 
form so as to avoid but not eliminate the possiblity of a lawsuit down 
the line over whether the consenting party understood the import of the 
consent.
    Most importantly, because we rely on the use of language, there 
will always be opportunistic attorneys who will prey upon innocent 
companies whose language can be manipulated, and what language cannot 
be manipulated? If the statute provided consent language that was above 
reproach, and provided a mechanism whereby consent could be concretely 
established, then the caller could rely upon the consent given.

    Question 9. Are you aware of any small businesses that have gone 
out of business as a result of the legal fees or settlements associated 
with a TCPA litigation? In the recent CFPB Notice of Proposed 
rulemaking for arbitration, the CFPB appears to recognize the 
challenges small businesses have when faced with TCPA related class 
action litigation. In the rule they note, ``. . . the Bureau recognizes 
the concern expressed by SERs, among others, that particular statutes 
may create the possibility of disproportionate damages awards.'' Do you 
have similar concerns about how the statutory damages associated with 
TCPA litigation can threaten small businesses?
    Answer. The healthcare industry has its small businesses just like 
most areas of endeavor. In healthcare, the small community hospital is 
often the lifeblood for care in rural and small communities not served 
by a large metropolitan medical center or an academic medical center 
attached to a large university. The struggles of the small community 
hospitals, with the lack of bargaining power with large commercial 
insurance companies, and large governmental payor populations, are very 
real. The difference between providing necessary healthcare to a rural 
community and shutting the doors of the hospital is often a very thin 
line.
    Add to the these issues an obligation to contact each patient in 
follow up to decrease readmissions, provide eligibility information for 
charitable and discount programs (both areas required by statute), 
while at the same time being prohibited from using technology to 
efficiently perform these tasks, and you are left with a hospital that 
has to decide to maintain the nurse/patient ratio or to hire boiler 
rooms full of phone callers in order to deliver information. Resources 
are finite, and each telephone staff member who performs no other task 
represents an additional level of lost patient care. The economic 
stress is tragic mostly because it is fully avoidable.
    Disproportionate damage awards are also devastating to small 
hospitals. The hospital has no need or economic incentive to make 
telemarketing calls. Thus its calls are all patient education and 
information-driven. The hospital fulfilling its statutory and 
regulatory duty innocently calls a reassigned number more than once, 
where the holder of the number (under no obligation to inform the 
hospital of the reassignment) receives more than one call and sues. 
This is not justice and is a far cry from the original purposes of the 
Act.
    Not all robocalls are annoying and intrusive telemarketing calls. 
Health care related calls go to the essence of the patient's well 
being. Resources devoted just to defending such lawsuits are 
devastating to the care giver community.
    What we will see, at a time where healthcare is at the forefront of 
the national agenda, is a consolidation and loss of hospital 
facilities, causing greater scarcity of our most precious resource-the 
ability to care for those in need.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                             Richard Lovich
    Question 1. Healthcare represents roughly one quarter of our 
Nation's economy but is unique in a number of ways both due to its 
bifurcated regulation and reimbursement but also in its personal impact 
on consumers.
    Given those facts, how is the FCC gathering information from the 
impacted healthcare patients and providers to inform its regulatory 
processes?
    Answer. We are not aware of any efforts by the FCC to gather such 
information in the TCPA context.

    Question 2. Further, how concerned is the FCC's leadership that 
rigorous regulation of such specific tools like auto-dialing will 
inhibit the ability of healthcare providers to reach out to their 
patients, assist patients in accessing care and improve patient 
adherence to care plans--and in a less intrusive manner that most 
patients prefer?
    Answer. FCC leadership seems completely unconcerned about how the 
regulation of specific tools negatively impacts the patient. Instead, 
the approach taken by the FCC has been to lump healthcare related 
entities into the same basket as telemarketers for many aspects of the 
TCPA. Heart transplant surgeons are apparently no better than scam 
telemarketers.
    The Bipartisan Budget Agreement of 2015 exempted the collection of 
Federal debt from the TCPA and shows a logical and rational approach to 
this issue. Federal debt collection is immensly important, and so is 
healthcare. The damage awards, class action suits, defense costs, and 
untold thousands of hours of productive time stolen from patients and 
devoted to the nonsensical pursuit of avoiding a frivolous TCPA claim 
cannot be the right outcome. Instead, the TCPA should be modernized, 
consistent with HIPAA, to allow consumers to receive necessary and 
vital non-telemarketing health care communications.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                            Monica S. Desai
    Question 1. Would a concrete standard for revocation of consent in 
the TCPA regulations, as there is for the FDCPA, FCRA, and other 
banking laws, be helpful in reducing the types of contact intended to 
be prohibited by the TCPA?
    Answer. Yes. A clear, concrete standard for revocation benefits 
consumers, by providing them with an effective means for reducing 
unwanted calls and messages, and benefits businesses, by allowing 
uniformity and consistency in effectuating opt outs. However, the 
current standard for revocation set out by the Federal Communications 
Commission (FCC) is unworkable and an invitation to set litigation 
traps. In the 2015 TCPA Order, the FCC stated that a person may revoke 
consent under the TCPA by any means that is ``reasonable'' considering 
the ``totality of the facts and circumstances,'' including ``orally or 
in writing'' and at ``in-store'' locations.\1\ Further, a caller ``may 
not limit the manner in which revocation may occur.'' \2\ Callers need 
to be able to rely on uniform revocation procedures, not an open-ended, 
case-by-case approach. But the FCC has provided no means for callers 
and consumers to be certain that revocation will be effective. For 
example, in his dissent from the 2015 TCPA Order, Commissioner Pai 
questioned how any retail business could comply with the FCC's 
revocation standard, asking: ``Would a harried cashier at McDonald's 
have to be trained in the nuances of customer consent for TCPA 
purposes? . . . Could a customer simply walk up to a McDonald's 
counter, provide his contact information and a summary `I'm not lovin 
it,' and put the onus on the company? The prospects make one grimace.'' 
A concrete standard that helps ensure effective revocation would remove 
the uncertainty created by the FCC and benefit consumers and 
businesses.\3\
---------------------------------------------------------------------------
    \1\ Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, CG Docket No. 02-278, Report and Order, FCC 15-
72,  47, 64, n. 233 (2015) (2015 TCPA Order).
    \2\ Id.  47.
    \3\ See ACA Int'l et al., v. FCC et al., No. 15-1211, Brief for 
Respondents, at 64 n. 16 (D.C. Cir., filed Jan. 15, 2016) (Government 
Respondents in the appeal of the 2015 TCPA Order stated that the FCC's 
ruling ``did not address whether contracting parties can select a 
particular revocation procedure by mutual agreement'').

    Question 2. Attorney General Zoeller and a number of other 
attorneys general sent a letter to this committee urging support for 
the HANGUP Act, arguing that it was necessary because, ``As amended, 
the TCPA now permits citizens to be bombarded by unwanted and 
previously illegal robocalls to their cell phones if the calls are made 
pursuant to the collection of debt owed to or guaranteed by the United 
States.'' Is that your understanding of what will necessarily be 
allowed as a result of the Federal Communications Commission's 
implementation?
    Answer. No. The FCC has proposed specific rules to limit the number 
and type of calls that can be made pursuant to the exemption for calls 
``made solely to collect a debt owed to or guaranteed by the United 
States.'' \4\
---------------------------------------------------------------------------
    \4\ See 47 U.S.C. Sec. 227(b); Rules and Regulations Implementing 
the Telephone Consumer Protection Act of 1991, Notice of Proposed 
Rulemaking, CG Docket No. 02-278, FCC 16-57,  1 (May 6, 2016).

    Question 3. What are some of the benefits and challenges of moving 
forward with a mandatory reassigned numbers database?
    Answer. Under the FCC's interpretation of ``called party,'' it is 
literally impossible to comply with the TCPA. The FCC acknowledged in 
the 2015 TCPA Order that ``callers lack guaranteed methods to discover 
all reassignments immediately after they occur.'' \5\ As a result, and 
because telephone numbers are reassigned so frequently,\6\ companies 
face significant risk under the TCPA as it has been interpreted by the 
FCC to impose liability for calls to reassigned numbers even where the 
company had no knowledge of the reassignment. An accurate reassigned 
number database would allow companies to determine whether a number in 
the database has been reassigned, thereby preventing unwanted calls to 
the new holder of the number. There should be a TCPA safe harbor 
associated with the use of such a database.
---------------------------------------------------------------------------
    \5\ 2015 TCPA Order  85.
    \6\ By one estimate, roughly 37 million telephone numbers are 
reassigned each year. Alyssa Abkowitz, Wrong Number? Blame Companies' 
Recycling, The Wall Street Journal (Dec. 1, 2011).
---------------------------------------------------------------------------
    The database must be mandatory for all carriers. There are 
currently voluntary databases in which carriers may choose whether to 
submit number reassignment information, and those databases are 
incomplete and sometimes inaccurate. Implementing a reassigned number 
database that includes all carriers may require Congressional action.

    Question 4. Is there a helpful way to distinguish between random or 
sequential telemarketing calls and texts versus calls or texts to 
numbers originally provided by customers that have been subsequently 
reassigned?
    Answer. Congress did, in fact, distinguish between random or 
sequential telemarketing calls--prohibiting them through the TCPA--and 
calls made in good faith to a number that has been reassigned--by 
providing a specific exemption from TCPA liability for calls made with 
the prior express consent of the called party.\7\ Congress intended 
this distinction to have meaning--otherwise it would have not provided 
for such an exemption. I am not aware of any existing reassigned number 
database or other service that captures all reassignments. I think that 
it is critical for purposes of the discussion about TCPA reform, 
though, to distinguish the `bad actors' (such as scammers making 
millions of illegal robocalls) from compliance-focused companies that 
are trying to send their customers timely communications that they want 
and have requested, but are getting penalized for doing so when the 
number has been reassigned without their knowledge. The best way to 
protect callers who are making calls in good faith, and to prevent the 
chilling of such calls so that consumers can keep receiving the calls 
they expect to receive, is to interpret ``called party'' as Congress 
must have intended--as ``expected'' or ``intended'' recipient.
---------------------------------------------------------------------------
    \7\ See 47 U.S.C. Sec. 227(b)(1).

    Question 5. Are texts less intrusive than phone calls? If so, would 
it make sense to have reduced penalties for text message violations of 
the TCPA in order to encourage contact through text messaging rather 
than phone calls?
    Answer. Yes--text messages are less intrusive than phone calls. 
Consumers can choose when and whether to respond. Consumers are able to 
block texts from specific senders easily, and can easily delete texts. 
Text messages do not ``interrupt'' conversations or meals. Text 
messages do not ``tie up'' phone lines. Text messages are often part of 
a ``bucket'' plan.
    By its explicit text, the TCPA does not apply to text messaging--it 
only applies to ``calls''. However, the FCC has found that ``calls'' 
under the TCPA refers to both voice calls and to text messages.\8\
---------------------------------------------------------------------------
    \8\ Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, CG Docket No. 02-278, Report and Order, 18 FCC 
Rcd 14014  165 (2003).
---------------------------------------------------------------------------
    In the first instance, Congress could make clear that the TCPA is 
only applicable to calls, not to text messages, consistent with the 
statute as it is written.
    Another approach would be to provide for reduced damages for text 
messages sent without consent of the party receiving the text. And, 
Congress could eliminate strict liability for strict liability for text 
messages sent without the consent of the recipient.

    Question 6. Are you aware of any negative consequences resulting 
from the Commission's 2015 Omnibus Declaratory ruling, including the 
movement of call centers overseas?
    Answer. Companies face substantial, even potentially ruinous 
liability as a result of the FCC's interpretations of the TCPA, 
particularly with respect to the agency's treatment of reassigned 
numbers and ATDS equipment. I have heard anecdotally that more and more 
companies are considering moving call centers overseas, so that 
manually dialed calls can be made at less expense.

    Question 7. Is there a database on which callers can reasonably 
rely that identifies numbers that have been reassigned?
    Answer. No. As noted above, the FCC acknowledged that ``callers 
lack guaranteed methods to discover all reassignments immediately after 
they occur.'' \9\ The FCC stated that ``at least one database can help 
determine whether a number has been reassigned;'' however, the leading 
database provider stated in the record that it is ``not aware of any 
authoritative telecommunications database that links all consumer names 
with their telephone numbers.'' \10\ This underscores the importance of 
creating a comprehensive reassigned number database.
---------------------------------------------------------------------------
    \9\ 2015 TCPA Order  85.
    \10\ 2015 TCPA Order  86; see also Letter from Richard L. 
Fruchterman, Associate General Counsel to Neustar, to Marlene H. 
Dortch, Secretary, FCC in CG Docket No. 02-278, at 1 (Feb. 5, 2015).

    Question 8. What is the most difficult challenge facing your 
clients with respect to TCPA compliance?
    Answer. The lack of any guaranteed means of determining whether a 
number has been reassigned is the most difficult aspect of TCPA 
compliance for the companies that I have worked with. The FCC found in 
the 2015 TCPA Order that after a caller makes one attempt to call or 
text a number that has been reassigned, the caller is liable for any 
subsequent calls, even if the caller is completely unaware that the 
number was reassigned.\11\ As a result, companies face significant, 
even ruinous liability for a problem that they simply cannot control 
because there is no guaranteed means to learn of number reassignments.
---------------------------------------------------------------------------
    \11\ 2015 TCPA Order  89-93.
---------------------------------------------------------------------------
    The FCC's boundless interpretation of the types of calling 
equipment regulated by the TCPA--``automatic telephone dialing 
systems'' (``ATDS'')--has also created significant compliance 
challenges for companies. Although ATDS is specifically defined in the 
statute,\12\ the FCC found in the 2015 TCPA Order that any equipment 
for which there is ``more than a theoretical potential that the 
equipment could be modified to satisfy the [statutory] definition'' is 
also an ATDS.\13\ In other words, according to the FCC, if the 
equipment could be modified in the future to become an ATDS, then it is 
treated as if it is an ATDS--even if it has not been modified.
---------------------------------------------------------------------------
    \12\ 47 U.S.C. Sec. 227(a)(1). Under the statute, an ATDS is 
defined as equipment with a specific ``capacity''--the ``capacity'' to 
``store or produce telephone numbers to be called, using and random or 
sequential number generator; and . . . to dial such numbers.'' Id. The 
FCC found in the 2015 TCPA Order that ``capacity'' included the 
``potential ability'' of the equipment, such that (as discussed above), 
any equipment for which there is ``more than a theoretical potential 
that the equipment could be modified to satisfy the [statutory] 
definition'' is also an ATDS. 2015 TCPA Order  19. This decision is 
contrary to the statute and has created significant compliance 
challenges for industry, and Congress should clarify, consistent with 
the statute, that ``capacity'' in the definition of an ATDS is limited 
to the equipment's ``present'' or ``current'' ability.
    \13\ 2015 TCPA Order  18.
---------------------------------------------------------------------------
    Even more problematic, the only example provided by the FCC of 
telephone equipment that did not qualify as an ATDS is a ``rotary-dial 
phone,'' and the FCC even suggested that under its interpretation, a 
smartphone could be considered an ATDS.\14\ The FCC's approach has left 
companies unsure about how to determine whether their calling equipment 
implicates the TCPA. As one amicus curiae in the appeal of the FCC's 
2015 TCPA Order noted, ``[i]t is unclear who exactly would be qualified 
to conduct such an analysis--perhaps a philosopher?'' \15\ The FCC's 
limitless interpretation is contrary to the specific definition in the 
statute, and offers little usable guidance for compliance.
---------------------------------------------------------------------------
    \14\ 2015 TCPA Order  18.
    \15\ ACA Int'l v. FCC, No. 15-1211, Brief of Amicus Curiae 
Communication Innovators In Support of Petitioners, at 15 (filed Dec. 
2, 2015).

    Question 9. Do any other regulators have a different stance on 
communicating with consumers via cellphone than the FCC? Have other 
regulators seen consumer benefits in communicating with consumers on 
their cellphone via text message?
    Answer. Yes. The following are just a few examples that I have 
found:

   The Consumer Financial Protection Bureau (CFPB) has 
        recognized, that especially for ``economically vulnerable 
        consumers,'' tracking transactions through mobile technologies 
        such as text messaging may help consumers ``achieve their 
        financial goals'' and can ``enhance access to safer, more 
        affordable products and services in ways that can improve their 
        economic lives.'' \16\
---------------------------------------------------------------------------
    \16\ CFPB, CFPB Mobile Financial Services: A summary of comments 
from the public on opportunities, challenges, and risks for the 
underserved., at 10. (Nov. 2015), available at http://
files.consumerfinance.gov/f/201511_cfpb_mobile-financial-services.pdf.

   The Federal Deposit Insurance Corporation (FDIC) released a 
        request for comment that stated that text message alerts give 
        consumers ``Access to account information;'' ``Help[] consumers 
        avoid fees;'' and ``Help[] monitor accounts for fraud.'' \17\ 
        In fact, the FDIC research concluded that underbanked consumers 
        may prefer texts to e-mails when receiving alerts because texts 
        are ``Faster,'' ``Easier to receive,'' ``Attention grabbing,'' 
        and ``Quicker and easier to digest.'' \18\
---------------------------------------------------------------------------
    \17\ Federal Deposit Insurance Corporation, Qualitative Research 
for Mobile Financial Services for Underserved Consumers, at 19 (Oct. 
30, 2015), available at https://www.fdic.gov/about/comein/2015/come-in-
2015.pdf.
    \18\ Id. at 21.

   The Consumer Product Safety Commission's product safety 
        ``Recall Checklist'' recommends that companies send ``text 
        messages to customers'' as part of an ``effective and 
        comprehensive product safety recall.'' \19\
---------------------------------------------------------------------------
    \19\ See Consumer Product Safety Commission, Recall Guidance, 
Recall Checklist (last visited May 16, 2016), available at http://
www.cpsc.gov/en/Business--Manufacturing/Recall-Guidance/.

   The Federal Trade Commission has emphasized the importance 
        of proactive communications in connection with data breaches 
        and is urging required notifications.\20\
---------------------------------------------------------------------------
    \20\ See Prepared Statement of Edith Ramirez, Protecting Personal 
Consumer Information from Cyber Attacks and Data Breaches, Before the 
Senate Committee on Commerce, Science, and Transportation, 113th Cong., 
at 2 (Mar. 26, 2014) (explaining that the ``FTC supports Federal 
legislation that would strengthen existing data security standards and 
require companies, in appropriate circumstances, to provide 
notification to consumers when there is a security breach''), available 
at https://www.ftc.gov/system/files/documents/public_statements/294091/
ramirez
_data_security_oral_statement_03-26-2014.pdf.

    Question 10. What action could Congress or the Federal 
Communications Commission take to help callers avoid costly discovery/
litigation in cases where they have not violated TCPA?
    Answer. As discussed above, Congress should establish a reassigned 
number database accompanied by a TCPA safe harbor for callers that use 
the database. This safe harbor would, for example, exempt from 
liability calls made inadvertently to a number that had been reassigned 
if the caller had checked the database prior to making the call. This 
would help to reduce or eliminate TCPA risk associated with calls to 
reassigned numbers, which is a significant source of liability under 
the TCPA that callers have no means of effectively preventing.

    Question 11. Why can't callers simply rely on consent?
    Answer. The FCC has made it impossible for callers to rely on 
consent. According to the FCC, when the consenting party relinquishes 
her telephone number, callers can be liable for any subsequent calls to 
that number after one attempted call or text, even if the caller was 
completely unaware of the reassignment.\21\ This is extremely 
problematic because almost 37 million telephone numbers are reassigned 
each year (which is roughly 101,000 reassignments per day).\22\ And, as 
the FCC has acknowledged, there is no guaranteed means for callers to 
discover a reassignment,\23\ meaning that companies may be unaware that 
the number provided to them by a customer was reassigned until the 
company is served with a lawsuit. Regardless, the FCC found in the 2015 
TCPA Order that after a caller makes one attempt to call or text a 
number that has been reassigned, the caller is liable for any 
subsequent calls, even if the caller is completely unaware, and has no 
way of knowing, that the number was reassigned.\24\
---------------------------------------------------------------------------
    \21\ See 2015 TCPA Order  89-93.
    \22\ Alyssa Abkowitz, Wrong Number? Blame Companies' Recycling, The 
Wall Street Journal (Dec. 1, 2011).
    \23\ See 2015 TCPA Order  85.
    \24\ 2015 TCPA Order  89-93.
---------------------------------------------------------------------------
    This approach makes it impossible to rely on consent provided by 
customers. A workable approach that acknowledges that there is no 
guaranteed means to know if a number has been reassigned would be to 
find that callers that have the consent of the ``intended'' or 
``expected'' recipient of the call or text are not liable under the 
TCPA. However, the FCC rejected this approach in the 2015 TCPA 
Order.\25\
---------------------------------------------------------------------------
    \25\ 2015 TCPA Order  72.

    Question 12. Are you aware of any small businesses that have gone 
out of business as a result of the legal fees or settlements associated 
with a TCPA litigation?
    Answer. I know that all businesses, and particularly small 
business, face significant compliance challenges as a result of the 
FCC's interpretations of the TCPA, though I am not personally aware of 
any small businesses that have gone out of business specifically as a 
result of TCPA litigation.

    Question 13. In the recent CFPB Notice of Proposed rulemaking for 
arbitration, the CFPB appears to recognize the challenges small 
businesses have when faced with TCPA related class action litigation. 
In the rule they note, ``. . . the Bureau recognizes the concern 
expressed by SERs, among others, that particular statutes may create 
the possibility of disproportionate damages awards.'' Do you have 
similar concerns about how the statutory damages associated with TCPA 
litigation can threaten small businesses?
    Answer. Yes. Under the TCPA, there is strict liability for each 
call made in violation with no limit on total damages. The FCC has 
determined that text messages are ``calls'' subject to TCPA damages. As 
a result, every single call made or text message sent by a business 
could result in $500 to $1,500 in damages, even for innocent conduct 
such as inadvertently making a call or sending a text to a reassigned 
number.\26\ Considering that almost 37 million telephone numbers are 
reassigned each year,\27\ and there is no way for companies to know 
whether a number has been reassigned, there is certainly a concern that 
a small business could incur significant, even ruinous liability for 
unintentional TCPA violations. Indeed, this concern is greater for 
small businesses than larger companies, because small businesses may 
not be able to afford the teams of lawyers and reassigned number 
database services that large companies use to help mitigate risk under 
the TCPA.
---------------------------------------------------------------------------
    \26\ 47 U.S.C. Sec. 227(b)(3).
    \27\ Alyssa Abkowitz, Wrong Number? Blame Companies' Recycling, The 
Wall Street Journal (Dec. 1, 2011).
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                                 ______
                                 
     Response to Written Question Submitted by Hon. Deb Fischer to 
                            Monica S. Desai
    Question. The FCC's 2015 order for TCPA reassigned numbers allows 
one call across an entire enterprise, even if it has multiple 
subsidiaries, before a caller can be liable for contacting a consumer. 
This is the case even though there is a no reassigned number list 
available to check, and the caller will often have no knowledge that a 
numbers has been reassigned. Is there a reason the caller should not be 
required to have ``actual knowledge'' that the called number is not 
that of the initial person? What reasonable means can a caller take to 
ensure a number has or has not been assigned?
    Answer. ``Actual knowledge'' should be the standard before TCPA 
liability is imposed for a wrong number call. The FCC's finding that, 
after one unanswered call or text to a particular number, the caller 
should assume that the number has been reassigned, is absurd. 
Specifically, the FCC found that companies can be liable for calls or 
texts to reassigned numbers even if they are unaware that the number 
has been reassigned, and further that after one attempt to call or text 
a reassigned number, whether or not the call or text ``yield[s] actual 
knowledge of reassignment, . . . the caller [has] constructive 
knowledge'' that the number has been reassigned.\28\ But the FCC's 
finding fails to acknowledge that there are myriad reasons why a call 
or text may be unanswered other than a number reassignment, for 
example: the recipient of the call may be busy; the ringer may be off; 
the power may be out or the phone's battery may be dead; or the 
recipient may not have a voice-mail set up or may use the default 
message (typically an automated reading of the number), among other 
possibilities.
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    \28\ 2015 TCPA Order  72.
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    The FCC's finding also fails to recognize the agency's own 
acknowledgment that, in fact, ``callers lack guaranteed methods to 
discover all reassignments immediately after they occur.'' \29\ The 
current databases that can help determine whether a number has been 
reassigned are incomplete, and can be inaccurate. And the ``options'' 
that the FCC suggested for learning about reassigned numbers--such as 
periodically sending an e-mail or mail to the consumer check to make 
sure that the number has not been reassigned--will not enable callers 
to discover all reassignments, and could be annoying to consumers.\30\
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    \29\ 2015 TCPA Order  85.
    \30\ See 2015 TCPA Order  86.
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    The best solution to these problems would be for Congress or the 
FCC to clarify that the ``called party'' under the TCPA refers to the 
``intended'' or ``expected'' recipient of the call.\31\ Defining 
``called party'' as ``intended recipient'' gives meaning to the 
statutory exemption for calls made with the consent of the called 
party. And, critically, the ``intended recipient'' approach would not 
give callers free reign to make calls to reassigned numbers--once a 
caller has actual knowledge that a number has been reassigned, then the 
caller no longer has consent to call the number and must stop calling.
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    \31\ See 47 U.S.C. Sec. 227(b)(1)(A).
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                                 ______
                                 
    Response to Written Question Submitted by Hon. Steve Daines to 
                            Monica S. Desai
    Question. We heard at the hearing about excessive litigation, 
uncertainty, and enforcement challenges businesses and governments face 
as a result of today's application of the TCPA. How can Congress act to 
update the TCPA to better target the real bad actors and relieve 
legitimate businesses from the burdens they face today, while still 
protecting consumers?
    Answer. There are several actions that Congress could take to 
lessen the impact of the TCPA for legitimate businesses and maintain or 
even improve protections for consumers.
    First, Congress should emphasize that when it provided an exemption 
for calls made with the prior express consent of the called party, it 
did not intend for that exemption to be illusory, and should clarify 
that the ``called party'' under the TCPA refers to the ``intended'' or 
``expected'' recipient of the call.\32\ Companies are frequently sued 
under the TCPA when they call a number provided to them by a customer 
but that number has since been reassigned without the caller's 
knowledge. Problematically, the FCC has interpreted the TCPA to impose 
liability for calls to reassigned numbers even where the caller had no 
knowledge of the reassignment.\33\ This finding fails to recognize the 
FCC's own acknowledgment that ``callers lack guaranteed methods to 
discover all reassignments immediately after they occur.'' \34\ 
Congress should therefore clarify that ``called party'' means 
``intended recipient,'' which would provide an opportunity for callers 
to learn that a number has been reassigned before they are subject to 
liability under the TCPA. Critically, this approach would not give 
callers free reign to make calls to reassigned numbers--once a caller 
is aware that a number has been reassigned, then the caller no longer 
has consent to call the number and must stop calling.
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    \32\ See 47 U.S.C. Sec. 227(b)(1)(A).
    \33\ The FCC further determined that ``called party'' means the 
``current subscriber'' or the ``non-subscriber customary user of the 
phone.'' 2015 TCPA Order  72.
    \34\ 2015 TCPA Order  85.
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    Second, Congress should establish a database that enables callers 
to identify numbers that have been reassigned. As the FCC has 
acknowledged, callers lack guaranteed means of discovering a number 
reassignment.\35\ Congress should also provide a safe harbor that 
excuses inadvertent calls to reassigned numbers if the caller makes 
active use of the database. This solution would provide relief to 
legitimate businesses and reduce the number of unwanted calls received 
by consumers.
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    \35\ Id.
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    Third, Congress should affirm that the TCPA's restriction on the 
use of ``automatic telephone dialing systems'' (ATDS) only applies to 
ATDS equipment as it is defined in the statute.\36\ Although ``ATDS'' 
is specifically defined in the statute, the FCC found that any 
equipment for which there is ``more than a theoretical potential that 
the equipment could be modified to satisfy the [statutory] definition'' 
is also an ATDS.\37\ The only example that the FCC provided of 
equipment that would not be considered an ATDS under this standard is a 
``rotary-dial phone,'' and the FCC even indicated that a smartphone 
would be subject to the TCPA under its interpretation.\38\ This 
limitless interpretation is contrary to the specific definition 
provided by Congress in the statute.\39\ Congress should affirm that 
the TCPA's restriction on the use of ATDS equipment only applies to 
ATDS equipment as it is defined in the statute.
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    \36\ See 47 U.S.C. Sec. 227(a)(1).
    \37\ 2015 TCPA Order  18.
    \38\ 2015 TCPA Order  18, 21.
    \39\ See 47 U.S.C. Sec. 227(a)(1).
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