by Eli Schwarz on December 13, 2017

TCPA and the Mortgage Industry: The Threat is Real


$7.4 million . $12.1 million . $16.3 million . Over the past year, the number and size of  Telephone Consumer Protection Act (TCPA) settlements paid by mortgage companies has continued to increase. TCPA requires organizations to obtain permission to contact consumers via automated dialing/texting systems and that they are able to prove they had permission from the consumer to do so. So, whether you generate your own online leads or purchase them from a third-party, the need to ensure compliance to protect your organization has never been higher.

TCPA: The Risk is Real

How important is it to have a sound compliance strategy in place? A recent study by the US Chamber Institute for Legal Reform noted that between July of 2015 and the end of 2016, the number of TCPA related legal cases has grown more than 46%, with more than 36% of those cases involving financial organizations. So, the risk of litigation related to the TCPA is real and growing.

The Potential Cost of Non-Compliance

As noted above, the non-compliance and TCPA-related litigation can be very costly. While fees may vary, just preparing a case for court can cost hundreds of thousands of dollars, including opportunity costs related to staff who are diverted from normal functions to participate in preparations.

That cost and threat alone is sometimes enough to force companies to settle to avoid legal fees, extended periods of bad press and negative consumer sentiment. As recent cases have shown, if a class action suit is filed and your organization is found liable for damages and non-compliance, the penalty could be in the hundreds of millions of dollars .

While damages awarded to consumers can start between $500 and $1,500 per call or text, additional penalties can be assessed at the judge’s discretion. The ability to prove consent quickly and clearly is key to warding off potential litigation and winning those cases that are brought to court.

Mitigating Risk Is Good Business

For an industry that is fixated on mitigating risk, it only makes sense to understand and address TCPA compliance. But this is not only about mitigating risk. For brokers and lenders, engaging with prospects that want to be contacted is a best practice for improving the consumer experience.

Having insight into which leads are TCPA compliant can help optimize a lender’s lead acquisition program. Just because a consumer has not provided consent does not mean the lead is lost. Lenders can still engage with that prospect through other channels such as email, preserving the opportunity to capitalize on the lead cost.

Interpretations of the TCPA Continue to Evolve.

As discussed in a previous blog , the requirements for compliance with the TCPA continue to evolve. While legislators and regulators debate changes and enforcement at the federal level, lawyers and judges offer new interpretations on a weekly and, sometimes, daily basis. Having an ongoing dialog with your internal legal, marketing and sales teams in addition to external lead providers is very important.

Being able to respond to TCPA related inquiries with persuasive proof that a consumer has given consent to be contacted is the key. Having the right processes and access to the right data will enable you to reduce the risk of TCPA related litigation.