News & Resources

Lending company may face fines due to questionable practices

Aug 31, 2011 Mike Garretson

Collection agencies may want to take note of a recent autodialing case that may put a lending company in legal trouble. A federal judge ruled for a full trial due to the illegal collection methods of a sub prime auto lender, Courthouse News Service reports. According to the report, Consumer Portfolio Services allegedly contacted debtors by auto dialing, a practice that the Telephone Consumer Protection Act prohibits. CPS maintains their dialing generator was not dialing randomly, which is what TCPA specifically prohibits, but rather by prediction - meaning, the system knew which contacts it would call. U.S. District Judge John Grady dismissed a motion for summary judgment, stating that predictive auto dialing still fell under the umbrella of an automatic dialing system. "That is precisely how CPS's equipment operates," Grady wrote. "The dialer automatically dials numbers and routes answered calls to available collectors. Even assuming that CPS's equipment can only function in this way, and cannot generate and dial random or sequential numbers, it is still an 'automatic telephone dialing system.'"