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Chase Bank Settles TCPA Class Action Suit for $34 Million

Judge Gary Feinerman of U.S. District Court for Northern District of Illinois has approved a settlement between Chase Bank ("Chase") and a class of mortgage customers that received automated messages regarding their loans from the bank without their express consent. There are two subclasses: the first that received phone calls and the second that received either voice alerts or text messages from Chase.  Despite the settlement, the bank continues to deny any wrongdoing.

The Telephone Consumer Protection Act ("TCPA") was passed in 1991 "to protect consumers from aggressive telemarketers."1 In recent years, TPCA class action claims have been on the rise. Plaintiffs have continued to bring class actions as the interpretation of the TCPA evolves -- as does the technology it is tasked with regulating (i.e., text messaging, voice alerts, and faxes).2

The lawsuit against Chase arose from the allegations that the bank did not receive proper consent to contact its customers by use of an artificial recording. The TCPA prohibits calls to landline or cell phones "using any automatic telephone dialing system or an artificial or prerecorded voice," with exceptions being made for emergency calls or for calls where the customer has issued prior consent.3 The FCC adopted new, more stringent rules on October 16, 2013, which require companies to get "express written consent for telemarketing calls (including SMS text messages) that are initiated with either an autodialer or artificial voice/prerecorded message to mobile phones, or use an artificial voice/prerecorded message to residential phones."4 These new regulations may result in increased violations to the TCPA and the amount of class action claims filed under the TCPA.

Each class member in the Chase TCPA settlement is expected to receive between $20 and $40. This is the second time in the last several years that alleged TCPA violations against Chase have led to a class action settlement. In 2012, JPMorgan Chase agreed to pay $7-9 million to settle a case in which it was also alleged to have made automated cell phone calls to mortgage holders without their consent.5

If you have any questions regarding this subject or this posting, please contact James E. Miller ([email protected]) or Michael Ols ([email protected]). We can also be reached toll-free at (866) 540-5505.

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