Supreme Court Ruling Affects the Future of Outbound Dialing

May 21, 2021
Donna Fluss

Outbound dialing, which includes the sending of texts, is back in the news as the result of an April 1 decision by the U.S. Supreme Court in the case of Facebook v. Duguid et al.). In layperson’s terms, the case challenged the Telephone Consumer Protection Act (TCPA) of 1991, which provides an expansive definition of an automated telephone dialing system (ATDS).

The April 1 ruling held: “To qualify as an automatic telephone dialing system under the TCPA, a device must have the capacity either to store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator.” This seems to place limits on the TCPA’s broad definition of an ATDS, which could allow companies to expand their use of outbound dialing for legitimate business purposes.

Some constituencies, particularly sellers of outbound dialing solutions and lawyers who specialize in this area, are thrilled with the new interpretation of the TCPA, as it represents the potential for new business. Consumers and consumer advocacy groups are not as excited about the Supreme Court’s clarification of the definition of ATDS, as it presents increased opportunity for use of outbound dialing solutions that are frequently abused. (NOTE: DMG Consulting is a contact center and back-office industry analyst firm and does not provide legal advice. For legal counsel, please speak to your attorney.)

Regulators vs. Fraudsters

I find the ruling interesting and am glad the Supreme Court is reviewing these regulations, as the original definition of ATDS was very restrictive and not aligned with current technology. As a consumer who has a landline in my house (as well as a cell phone), where 95 percent of the calls on my home line and 45 percent of the calls (and some of the texts) on my cell phone are either someone trying to sell me something, a politician, or a fundraiser, I’d like more restrictive outbound regulations and higher penalties for abuse. However, I believe that companies should have the right to use outbound technology to conduct their business, with appropriate constraints.

From a practical perspective, it’s clear that the real issue is not one regulators can easily fix (as we’ve seen), as the abuses are being committed primarily by unscrupulous companies, fraudsters, and bad actors who are doing things they know are illegal, but don’t care. (And then there are the calls from fundraisers, and from politicians, who have deliberately excluded themselves from any outbound dialing restrictions.)

Finding a Balance Between Good and Bad

Like most of us, I greatly dislike receiving calls about warranties, luxury vacations, energy deals, and how much I owe the IRS. I have never given express consent to any of these organizations or people to call or text me, but that is not going to stop them, as they don’t care about the rules and regulations. These are the calls (and texts) that most of us want to have eliminated. The challenge is to stop these inappropriate, annoying, and illegal interactions while allowing companies with legitimate outbound needs to conduct their business. There are many positive uses of outbound dialing, including fraud notifications, travel delays, appointment reminders, delivery updates, payment notices, low-balance warnings, safety (or Amber) alerts, and so much more.

It’s great that the U.S. Supreme Court decided to hear a case about the definition of ATDS. It highlights the issues associated with the outbound dialing market. While the court’s ruling is a step in the right direction for companies and other organizations that use this technology for legitimate purposes, it addressed only a small portion of the TCPA regulations. It’s time to review all aspects of the TCPA. So much has changed in the past 30 years, and the TCPA has not kept up with the times, technology, or bad actors.