In what has been termed a groundbreaking opinion, the Second Circuit recently held that the federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b), bars a consumer-buyer from revoking his or her contractual consent to receive creditor calls concerning the underlying contract or account. The case, Reyes v. Lincoln Automotive Financial Services, 861 F.3d 51 (2d Cir. 2017), provides creditors with a strong defense against consumers who issue complaints about the creditors’ debt collection processes.
In the case, Alberto Reyes Jr. (“Reyes”) leased a new Lincoln MKZ luxury sedan from a Ford dealership. The lease was financed by Lincoln. One provision of the lease stated that Reyes expressly consented to electronic or verbal contact from Ford and Lincoln and their agents, affiliates, and representatives. Id. at 53-54. This contact included manual calling methods, prerecorded voice messages, texts, and emails to any email or telephone number that Reyes provided, “now or in the future, including a number for a cellular phone or wireless device[.]” Id. at 54. In his lease application, Reyes provided Lincoln with his cell phone number.
After Reyes fell behind on the auto lease, Lincoln engaged in an ongoing effort to cure the default. Toward this end, Lincoln called Reyes’s cell phone 141 times with a customer service representative on the line and left a total of 389 prerecorded voice messages on the cell phone. Id. These calls were made notwithstanding Reyes’s mailing of a letter to Lincoln requesting that Lincoln not call his cell phone. Id. Objecting to Lincoln’s debt collection practices, Reyes filed suit in federal district court, alleging violations of the TCPA and the Fair Debt Collection Practices Act.
The district court entered summary judgment in favor of Lincoln. In reviewing the case on appeal, the Second Circuit first determined that a question of material fact existed as to whether Reyes actually revoked his consent to receive phone calls from Lincoln by mailing the letter in question to Lincoln. Id. at 55. Thus, the Second Circuit concluded that the district court erred in entering summary judgment on the grounds that no reasonable jury could find that Reyes revoked his consent. Id.
Even so, the Second Circuit went on to affirm the district court’s ruling that the TCPA prohibits consumers such as Reyes from unilaterally revoking consent to receive creditor calls, at least where the consumer agrees to be contacted “as part of a bargained-for exchange[.]” Id. at 56. Because Reyes’s consent that Lincoln contact him by telephone was not gratuitous but, rather, was included as an express provision of the lease, his consent to receive telephone contact from Lincoln was not unilaterally revocable. Id. at 57. This was so, because under general contract law, every contract provision, including every modification, must be supported by the mutual consent of both parties. Id. Nothing in the TCPA’s definition of “consent” indicated that Congress intended to alter the common law of contracts in this respect. Id.
Next, the Second Circuit rejected Reyes’s argument that his consent was revocable because the consent provision was not an essential provision of the lease. Id. at 58. In so doing, the court stated that a contract term need not be essential “in order to be enforced as part of a binding agreement.” Id. Under established contracts law, the parties are free to bind themselves to contractual terms as long as the basic requirements of contract formation (e.g., mutual assent and consideration) are satisfied. Id.
Finally, the Second Circuit concluded that its ruling was not altered by the fact that the TCPA is intended to be remedial in nature and is designed to protect consumers from unwanted telephone calls. Id. According to the court, the TCPA’s definition of “consent” is clear and unambiguous and, therefore, leaves no room for contrary judicial interpretation. Id.
As mentioned above, Reyes provides the basis for a strong creditor defense against damages lawsuits brought by consumer-buyers who object to the creditor’s debt collection practices. If the consumer’s consent to receive creditor contact is clearly set out in the underlying contract and the consumer voluntarily provides the creditor with his or her telephone or cell phone number, the consumer will not have a viable basis under the TCPA to object to the receipt of ongoing calls from the creditor who is attempting to cure the consumer’s default.