Article by Dotan Hammer
The Court of Appeals for the Eleventh Circuit in Atlanta, Georgia held in a majority opinion that the Federal Telephone Consumer Protection Act (TCPA), which in general prohibits the use of Automatic Telephone Dialing Systems to play recorded messages and send text messages without the prior consent of the subscriber, applies only to systems that use randomly or sequentially generated numbers with no human intervention. It does not apply to systems that automatically dial a stored list of telephone numbers.
The court explained that when Congress enacted the TCPA in 1991, its focus was to eradicate the telemarketing method widely used at that time – dialing randomly or sequentially generated numbers. Only in 2003 did the Federal Communications Commission (FCC) issued its modified interpretation that the law also applies to numbers dialed from a database of numbers. The FCC did so because it “had watched companies switch from using machines that dialed a high volume of randomly or sequentially generated numbers to using “predictive dialers” that called a list of pre-determined potential customers”.
The court rejected the FCC’s effort to expand the statute’s coverage through the FCC’s broad interpretation and all-encompassing view of the law’s purpose.
The Eleventh Circuit’s holding is impactful as it could allow companies to transmit unsolicited marketing text messages (SMS) to subscribers listed in a database of numbers, without having to obtain their prior consent. But the holding conflicts with the Ninth Circuit’s 2019 holding in Marks v. Crunch San Diego, LLC, which supports the FCC’s expansive view. This circuit split may lead the way for a Supreme Court review of the matter.
CLICK HERE to read the Eleventh Circuit’s decision in Glasser v. Hilton Grand Vacations Company, LLC.
The Israeli Payment Services Law Enters into Force
The Israeli Payment Services Law entered into force on January 9, 2020. The law is a comprehensive legislative arrangement of all types of payment services, including digital payment methods such as payment applications. The new law regulates the use and offering of payment services on three levels:
- Oversight of payment service providers;
- The contractual relationship between a payment service provider and its customer (payer or payee); and
- Consumer protections and rights when engaging with payment service providers.
The law is designed to regulate both traditional and innovative payment methods, as well as payment services operated by non-banking entities. Among other issues, the law requires a payment service provider to conclude a written agreement with its customers that is written in clear and simple language. The service provider must obtain and document the customer’s explicit consent to use the services and allow the customer to end the agreement at any time.
The law also provides that a service provider may perform a payment transaction only upon the customer’s instruction to do so and prohibits service providers from unreasonably refusing to comply with instructions from customers.
The law also establishes a liability mechanism protecting customers when they use a payment service. The service provider is liable for loss or damage suffered by the customer, even if the service provider is not at fault. The law also limits customers’ liability where their account is breached. Non-compliance with the law can also attract criminal penalties of up to NIS 450,000 (approximately US $130,000) and up to one-year imprisonment.
CLICK HERE to read the Payment Services Law (in Hebrew).