Privacy & Information Security Law Blog

On September 2, 2014, a federal district court in California granted final approval to a settlement ending a class action against Bank of America (“BofA”) and FIA Card Services stemming from allegations that the defendants “engaged in a systematic practice of calling or texting consumers’ cell phones through the use of automatic telephone dialing systems and/or an artificial or prerecorded voice without their prior express consent, in violation of the Telephone Consumer Protection Act (“TCPA”).” The court granted preliminary approval to the settlement in December 2013.

Leading up to the settlement, a key dispute between the parties was whether BofA had obtained the requisite “prior express consent” to make autodialed or prerecorded calls to the plaintiffs’ cell phones. In the settlement, BofA denied all of the plaintiffs’ allegations and maintained that it did not violate the TCPA through its autodialed or prerecorded calls and text messages.

The court order certified a class of approximately seven million individuals who received allegedly unauthorized calls or text messages to a cellular telephone regarding a BofA credit card account or residential mortgage loan from 2007 through 2013. Due to the size of the class and the damages available under the TCPA, the court noted that, had the plaintiffs been victorious at trial, the potential amount of the award against the defendants could have caused post-trial concerns. The TCPA provides for statutory damages of $500 or $1,500 per unauthorized call or text.

This settlement is the latest in a string of recent settlements related to alleged violations of the TCPA. In the past few weeks, two other major financial institutions have agreed to settle TCPA class actions for tens of millions of dollars, though those settlements are still pending approval. Other entities that have agreed to multimillion-dollar settlements to end similar class actions this year include Best Buy Co., Inc. ($4.5 million in June 2014); Bank of the West ($3.3 million in June 2014); the Los Angeles Clippers ($5 million in June 2014); and T-Mobile US, Inc. ($5 million in April 2014).

Read the court order granting approval of the final settlement.