World 421_OO_01

Our client, SLL, offers discounts to senior clients who opt into receiving texts about new products and services when they apply for loans from SLL. 

A prospective customer, Angie, agreed to receive marketing texts for a 10% discount on a mortgage for her crafts store and verbally told her loan officer that he may communicate updates and concessions from SLL via text. Angie is now filing a complaint against SLL for causing her to be “inundated with texts.” She claims that the discount is coerci...

Angie’s complaint is likely without merit. Assuming that all of SLL’s policies (“SLL Telemarketing Policies Manual.docx” and “Telemarketing Scripts for Senior Lending.docx”) were followed, it appears SLL’s communications are compliant with the Telephone Consumer Protection Act (TCPA), the Telemarketing Sales Rule (TSR), and elderly consumer financial protection laws. It is not likely that Angie can establish that the frequency of SLL’s texts or that SLL’s discount in consideration for telemarketing communication violates telemarketing rules or elderly consumer financial protection laws for the following reasons:

SLL’s telemarketing texts are compliant with the TCPA and TSR: SLL’s policy requires Angie to provide prior express written consent to opt in to receiving telemarketing communication and SLL’s internal policies review and manage the volume of text communications to consumers (e.g. with daily reports that monitor frequency, and by limiting the maximum number of texts to consumers to 3 texts per week). 

SLL’s policies are compliant with elderly financial protection laws: SLL has established specific safeguards to ensure elder-sensitive communication, such as escalation triggers during communication (“Consumer shows signs of cognitive impairment; Consumer mentions elder abuse”), prohibited phrases or tactics (e.g. Any false urgency or pressure tactics; Any health or medical claims etc.), and employee training (which includes “Elder sensitivity training”).

The SLL loan officer’s texts are outside the scope of the TCPA and TSR: Messages that relate directly to an existing or prospective transaction—such as updates on a pending loan application—are not considered “telemarketing” and fall outside the scope of telemarketing regulation. As such, Angie’s verbal consent to the loan officer’s communication regarding her mortgage application is sufficient since this communication falls outside the scope of the TCPA and TSR. 
Moreover, the volume and content of the loan officer’s texts are likely compliant with elderly consumer financial protection laws in any case, given SLL’s internal policies as noted above (which include employee training and limits on text volume/hours).

SLL’s discount was not coercive under the TCPA and TSR: Offering a discount in exchange for opting into marketing messages is generally permissible and not considered coercive or an abusive practice under the TCPA or TSR, as long as the condition does not affect the consumer’s ability to access the actual service or good. In this case, Angie could still receive the mortgage regardless of whether she opted into SLL’s marketing services. Moreover, SLL’s procedures for offering this discount are compliant with the TCPA and TSR (e.g. SLL’s policy includes the following procedures: “First text must identify SLL and purpose”; “Include opt-out instructions in every message”; “Honor STOP, END, CANCEL, UNSUBSCRIBE commands immediately”). 

SLL’s discount was not coercive under elderly consumer financial protection laws: The attached memo document (“External Counsel - Memo.pdf”) discusses the heightened requirements for telemarketing communications and cautions against intrusive outreach due to elderly consumer financial protection laws. As noted above, SLL’s telemarketing communications are compliant with the TCPA and TSR, in particular, the discount is not an abusive practice under the TSR, and SLL has several safeguards in place for elderly consumer financial protection including employee training and specific scripts/procedures.