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Good News for Automated Outbound Platform Solutions Provider

May 28, 2015
By Tracey E. Schelmetic - Telemarketing Software Contributor

For organizations that use automated outbound calling with a recorded voice – a/k/a “robocalling” – the stakes are very high. Federal legislation, the Telephone Consumer Protection Act or TCPA, largely prohibits using automated outbound calling, particularly to cell phones, unless the recipient has provided express written consent. Violators of the rule can be fined up to $1,500 for each instance of illegal calling. For some users of automated outbound messaging, this had added up to some hefty fines.

Last year, Capital One (News - Alert) Financial Corp., AllianceOne Receivables Management Inc., Leading Edge Recovery Solutions, LLC and Capital Management Services, L.P. were fined a record-setting $75.5 million by the Federal Communications Commission to end a consolidated class-action lawsuit that was pending in federal district court. Plaintiffs accused the companies of violating the TCPA by using an automated dialer to call customers’ cellphones without consent.  And while courts have already ruled that both the calling party – often a third-party marketing or teleservices firm – and the company for whom the message is being broadcast are on the hook for violations, the rules have been less clear when it comes to the companies that build the technology that enable the robocalls. A recently settled case may provide some clarity for the makers of outbound calling platforms.

A Washington federal court ruled that CallFire, which provides a cloud-based platform for voice and text connectivity that some clients use to engage in telephone or text campaigns, could not be included as a defendant in a lawsuit based on the TCPA, since it can be classified as a “common carrier.” Rinky Dink, Inc., the plaintiff, had filed suit against Electronic Merchant Systems (EMS) for making prerecorded telemarketing calls in violation of both the TCPA and Washington state law, and named CallFire as an additional defendant. EMS created the scripted message and hired an actor to record the message. CallFire was not involved in the creation or the content of the messages, according to a recent article by Christine M. Reilly and Marc Roth of the law firm Manatt Phelps & Phillips LLP.

“CallFire moved for summary judgment on two grounds: that as a common carrier it was exempt from liability under the TCPA, and that it did not initiate the calls to plaintiff as required by state law,” wrote Reilly and Roth. “The court agreed with CallFire on both counts.”

U.S. District Court Judge John C. Coughenour ruled that CallFire allowed customers to transmit messages of their own design and choosing, hired the voice actor and selected the phone numbers to be called, as well as the locations and timing of the calls. As a result, EMS was the “sole architect” of the calls placed to plaintiffs.

The ruling is good news for companies that offer cloud-based or software-based call center, telemarketing or telephony platforms. Judge Coughenour further ruled that a company can be a “common carrier” even if it’s not specifically recognized as such by the FCC (News - Alert)

Edited by Rory J. Thompson