The Telephone Consumer Protection Act’s safe harbor for calls made with the prior express consent of the called party is destroyed the moment the debtor says, “Stop calling me!” So too, a collector can be liable for autodialed calls to a third party even though a debtor gives that number as her own. These are the conclusions of the United States Court of Appeals for the Eleventh Circuit in the Osorio v. State Farm decision issued last month. They are sure to prompt creditor and collectors everywhere to reevaluate their dialer practices and procedures.

Here are the facts. Clara Betancourt opened a State Farm credit card account to pay her car insurance premium. During the account opening process State Farm alleged Betancourt said the telephone number she provided was her own. When Betancourt failed to pay timely the minimum balance due on her card, State Farm placed 327 autodialed calls to the number Betancourt provided in an attempt to collect. The problem for State Farm was the number Betancourt gave was not her own. It belonged to her life partner, Freddie Osorio, with whom she lived and had a child. When State Farm’s collection agency FMS, Inc. called to collect, Osorio answered the telephone and stated on two occasions, “Please stop calling.”

Consent Must Come from the Called Party

The Eleventh Circuit ruled that to enjoy the express consent protection of the TCPA, the consent must come from the called party.  This is usually the current subscriber of the telephone. Applying common-law concepts of consent, the Court ruled there was a factual issue as to whether Betancourt had the authority to consent to autodialed calls on Osorio’s telephone. State Farm argued that Osorio’s and Betancourt’s relationship alone required the Court to infer such authority. The Court disagreed, stating:

Parents and cohabitants everywhere would be shocked to learn that every adult in the household is legally entitled to consent to having autodialer debt collectors call any of their phones.

Because there was a genuine issue of fact as to whether Betancourt had the authority to act as Osorio’s agent, the district court improperly granted summary judgment.

Oral Revocation Okay

The court also rejected the notion that a debtor can only revoke consent to be called through a writing.  Again applying common-law principals, the Court found that oral revocation of express consent is permitted. Because Osorio allegedly said stop calling, summary judgment improperly was granted to State Farm. The case was reversed and sent back to the district court for trial.

The Osorio decision is a problem for the collection industry. When a debtor provides a number, how is the creditor to know whether it is accurate? It is probably not uncommon for a wife to provide her husband’s number as an additional contact number. Of additional concern is the mounting body of law finding that oral revocation is possible. If the Osorio view is adopted in more courts, a debt collector or creditor will be hard pressed to win these cases if the debtor testifies that he or she said stop calling. In a typical case the individual employee debt collector will have entered a vague collection note and either will no longer be employed or simply not remember the call. In such situations it is highly probable that the debtor would be believed as to the revocation instruction and TCPA liability will attach to calls made after consent was revoked.

The Osorio case hints at a solution to the revocation problem going forward. In reaching its decision it stated:

We therefore conclude that Betancourt and Osorio, in the absence of any contractual restriction to the contrary, were free to orally revoke any consent previously given to State Farm to call No. 8626 in connection with Betancourt’s credit-card debt.

The Court seems to suggest that one could make an agreement with the debtor that such consent cannot be revoked during the loan term. We predict that revocation issues will soon dominate all debt collection cases involving an autodialer.