Pallone-Thune TRACED Act – What Bankers Need to Know
By: Andrea Shaw
Why It Matters:
Illegal robocalls seem to be never ending. In 2018, the Federal Communications Commission (“FCC”) received 232,000 consumer complaints about robocalls. In December 2019, the President signed a new law, the Pallone-Thune TRACED Act (“TRACED Act” or “Act”), to enhance the FCC’s tools in combating robocalls. The TRACED Act amends the Communications Act of 1934, which is the same law that enacted the Telephone Consumer Protection Act (“TCPA”), which applies to bank’s autodialing activities. You may recall that, in March of 2019, the FDIC issued a civil money penalty against an Oklahoma Bank, in part, for violations of the TCPA. Community bankers are always striving to do right by their customers, which includes complying with the consumer protection laws that place restrictions on auto-dialers. In addition, bank regulators are actively monitoring compliance in this space as well. Below is a summary of the provisions of the TRACED Act bankers need to know. Note that these are highlights of the Act may be particularly applicable to banks, but it is not an exhaustive list. See the footnote, if you want a give the new law a detailed review.
What It Does:
The Act gives the FCC the ability to take enforcement actions against first time offenders, something they could not do under the existing regulatory scheme. It also lengthens the statute of limitations under which the FCC may bring an action. Intentional violators may be fined up to $10,000.
Often the robocallers spoof the caller-ID to appear to be from a trusted source. The Act requires phone carriers to implement technology to authenticate the caller-ID information (and they cannot add a new line item charge to consumer’s bills to do so). Phone carriers are already sending text messages on this topic. Bankers should make sure that any third-party service providers making calls on their behalf are using accurate caller-ID information.
The Act requires the Attorney General, with consultation from the FCC, to create an interagency task force to study the enforcement of robocall violations. Bankers should expect to see more enforcement in this space over at least the next year from a variety of regulators.
The Act also requires the FCC to engage in rulemaking over the next year to help protect consumers from receiving unwanted calls or text messages. The rule needs to consider in part, new methods for authenticating calls. Stay tuned!
The existing legal and regulatory scheme allows for robocalls to be placed without consumer consent in limited circumstances. The TRACED Act includes a provision placing the following limits on calls to consumers:
- the classes of parties that may make such calls;
- the classes of parties that may be called; and
- the number of calls allowed under the exemption.
If your bank is relying on one of the previous exceptions, you should review this provision of the law in detail to ensure that the exception has not been modified by the Act.
The TRACED Act adds criminal penalties for certain types of robocalls which will enable the Department of Justice to be more active in prosecuting scammers. It also requires the FCC to establish a “Hospital Robocall working Group” as targeting both patients and doctors is an issue. Bankers should be aware of this provision to have a heightened sensitivity to customer phone numbers that either are or are likely to be associated with hospitals. While this is only a working group, this is a signal of where enforcement trends are likely to head.
What You Should Do Next:
This is a great opportunity to review your bank’s practices regarding the use of auto-dialers to make sure your policies and procedures accurately and sufficiently cover your processes. Determine if any of the TRACED Act provisions may have an impact on your activities and revise accordingly.
As always, if you have any questions about implementation you can “Be Shur” we are here to help!
 Link to full law: https://www.congress.gov/bill/116th-congress/senate-bill/151