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Proactive Customer Communications Featured Article

Yahoo Wins 'Friends' in Its Fight Against TCPA Dialer Lawsuit

August 28, 2014

The Telephone Consumer Protection Act (TCPA) is making life uncomfortable for a lot of companies. Recent amendments to the legislation have put automated SMS, or text messages, into the same class as automated outbound telephone calls using dialing equipment, and therefore prohibit the practice without the express consent of the customer. Without their customers’ permission to send the text messages, companies found guilty of violating the TCPA could be liable for damages of between $500 and $1,500 for each violation.

Yahoo is currently embroiled in an appeal over the practice. Philadelphia resident Bill Dominguez is suing the company for alleged violations of the TCPA’s text messaging prohibition. While his first suit was dismissed by a judge – he was unable to prove that Yahoo was using a dialer to generate the text messages – he is appealing the ruling to the 3rd Circuit Court of Appeals. (According to MediaPost, the terms of the appeal have been sealed and therefore information specific to the appeal is unavailable.)

For its part, Yahoo maintains that its SMS system uses technology to convert emails to text messages before sending them to users' phones, and therefore do not involve automated dialers. Other courts have handed down mixed rulings on the TCPA SMS statute, and it seems apparent that clarification may need to be forthcoming from the Federal Communications Commission (FCC (News - Alert)).

Yahoo has won itself some friends in its legal fight. Other technology companies have expressed concern that the TCPA’s text messaging regulations are being misused by lawyers and their clients. What was put into place to prevent large-scale abuse by spammers is being used “to transform a statute intended to target abusive telemarketing practices into an extortionist club used to coerce windfall settlements,” wrote Twitter (News - Alert), Path and the trade group Computer & Communications Industry in a friend-of-the-court brief backing Yahoo. The companies say that an automated dialing system should be defined as equipment that can automatically generate phone numbers instead of merely dialing them, according to MediaPost.

“This interpretation avoids absurd results, helping to ensure that legitimate companies ... can continue offering innovative text-message-based services that consumers request and desire, without facing the risk of extortionist TCPA strike suits,” wrote the companies in their brief.

Yahoo is far from the first company to find itself in hot water over the TCPA SMS statute. Capital One (News - Alert) recently agreed to pay a record fine -- $75.5 million – in a consolidated class action lawsuit filed by customers who received unwanted text messages from the company. 

Edited by Rory J. Thompson

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