Press "Enter" to skip to content

Debt Collection Communications Receive New Protection Under U.S. Supreme Court’s Recent TCPA Decision

tcpaThe U.S. Supreme Court recently decided that a fix was needed to the federal Telephone Consumer Protection Act. But its decision in Barr v. American Assn. of Political Consultants, Inc. provides no TCPA relief for legitimate businesses that use technology to communicate with their customers.

A copy of the opinion is available at:  Link to Opinion.

The petitioners were political polling firms seeking to have the TCPA declared unconstitutional. They complained that while the TCPA prohibited them from calling cell phones and making texts to poll or to transmit “get out the vote” messages, it permitted calls and texts to cell phones for communications seeking to collect debt either owed to or backed by the United States. Because the TCPA drew this “content-based” distinction, it violated First Amendment free speech protections.

The Supreme Court agreed and affirmed the Fourth Circuit Court of Appeals decision finding that the federal debt exception was unconstitutional but salvaged the TCPA by severing the offending exception. The TCPA survives and for legitimate businesses seeking relief from TCPA-fueled litigation, this is no win.

And, if you were looking for guidance on the technology that would qualify as an automatic telephone dialing system, you would be disappointed because that hot issue and plenty of other TCPA-related ones were not before the Court.

Debt Collection Speech Receives Enhanced Protection

What the ruling did do is bolster protection of debt collection activity, particularly debt collection communications.

Four separate opinions were filed revealing a deep divide over whether debt collection communications are a type of speech that requires the highest level of protection from government restriction.

A majority of the Court (Chief Justice Roberts and Justices Alito, Gorsuch, Kavanaugh and Thomas) treated the government debt exemption as “content-based,” requiring it to be judged by a more rigorous test of “strict scrutiny,” which presumes the restriction is unconstitutional.

Earlier decisions would typically not apply strict scrutiny to “commercial speech,” speech primarily motivated by an economic activity. The plurality opinion treats debt collection communications as much more than “a particular economic activity.” Rather, a law that regulates “speaking about a particular topic,” even if it happens to be debt collection, is subject to the strict scrutiny test (emphasis in the original).

Justice Breyer disagreed and wrote that “regulation of debt collection . . . has next to nothing to do with the free marketplace of ideas or the transmission of the people’s thoughts and will to the government.” It is no more than “commercial regulation,” as such it is not subject to strict scrutiny analysis.  “To apply the strictest level of scrutiny to the economically based exemption here is thus remarkable,” he added.

Restrictions on content regulation and the application of strict scrutiny, he wrote, should be applied only when a law is “used as a method for suppressing particular viewpoints or threatening the neutrality of a traditional public forum.” While debt collection does implicate speech and the exception for government debt to the disadvantage of private debt is a “speech-related harm,” the harm is “modest” and serves an important public objective. It would survive the less intrusive “intermediate scrutiny standard” which does not carry the presumption that the regulation is unconstitutional.

Justices Ginsburg, Kagan and Sotomayor agreed that debt collection regulation should not be treated as regulation of “content-based” speech.

Implications for Debt Collection Restrictions

In the end, the plurality opinion treats debt collection communications as much more than “a particular economic activity.” Rather, a law that regulates “speaking about a particular topic,” even if it happens to be debt collection, is subject to the strict scrutiny test (emphasis in the original).

This TCPA ruling may very well serve as a basis to challenge extraordinary debt collection restrictions from a growing number of states in the years to come.

Print Friendly, PDF & Email

Donald Maurice provides counsel to the financial services industry, successfully litigating matters in the state and federal courts in individual and class actions. He has successfully argued before the Third, Fourth and Eighth Circuit U.S. Courts of Appeals, and has represented the financial services industry before several courts including as counsel for amicus curiae before the United States Supreme Court. He counsels clients in regulatory actions before the CFPB, and other federal and state regulators and in the development and testing of debt collection compliance systems. Don is peer-rated AV by Martindale-Hubbell, the worldwide guide to lawyers. In addition to being a frequent speaker and author on consumer financial services law, he serves as outside counsel to RMA International, on the governing Board of Regents of the American College of Consumer Financial Services Lawyers, and on the New York City Bar Association's Consumer Affairs Committee. From 2014 to 2017, he chaired the ABA's Bankruptcy and Debt Collection Subcommittee. For more information, see

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.