A federal judge has ruled against Consumer Portfolio Services in a case that may have widespread repercussions through the debt collection industry. The U.S. District Court judge for the Northern District of Illinois Eastern Division denied Consumer Portfolio Services’ motion for summary judgment for alleged violations of the Telephone Consumer Protect Act in calling and texting consumers’ cell phones.

The motion in the case, Griffith and Cain v. Consumer Portfolio Services (10 C 2697), revolved around whether CPS’ predictive dialer is an “automatic telephone dialing system” as defined by the TCPA. With predictive dialers, consumers are “robo-called,” and then routed to a live person if they answer. The TCPA defines an “automatic telephone dialing system” as “equipment that has the capacity – (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” In 2002, the Federal Communications Commission found that “a predictive dialer falls within the meaning and statutory definition of ‘automatic telephone dialing equipment’ and the intent of Congress.” In 2008, the FCC affirmed that predictive dialers are “subject to the TCPA’s restrictions on the use of autodialers.”

In the District Court case, CPS argued that predictive dialers don’t fall under TCPA restrictions. In the ruling, the judge noted, “CPS’s interpretation of the FCC’s orders, which it supports by quoting portions of those orders out of context, is a transparent attempt to win through litigation a battle that other companies lost before the FCC…. CPS finally resorts to the argument that the FCC cannot have meant what it said….”

The bottom line? Debt collection agencies routinely use predictive dialers. When this case goes to trial, it’s a sure bet that many of them will be anxiously watching from the sidelines. If calling and texting consumers’ cell phones is found to be a violation of the TCPA, it will be a victory for consumers.