Bank of America in record settlement over 'robocall' complaints

Reuters

* BofA denies allegations, agrees to settle for $32 million

* Cash payout believed to be largest ever under 1991 law

* Robocalling soars as technology makes auto-dial cheaper

By Dena Aubin

NEW YORK, Sept 30 (Reuters) - Bank of America hasagreed to pay $32 million to settle charges that it madeharassing debt collection calls to customers' cell phones, inwhat is believed to be the largest cash payout ever under a 1991law meant to protect consumers from unwanted calls.

The settlement will resolve multiple proposed class actionlawsuits filed on behalf of 7.7 million of the bank's creditcard and mortgage loan customers, according to court documents.

"We're pleased to resolve this matter," Bank of America Corpspokeswoman Betty Riess said in an emailed statement on Monday."Bank of America denies the allegations, but agreed to settlethe claims to avoid further legal costs."

The bank is the latest of numerous U.S. companies targetedin lawsuits over automatically dialed "robocalls." The volume ofthese calls has reached record levels now that technology makesit cheap for companies to send out thousands of calls perminute, said the Federal Trade Commission's website.

Making auto-dialed calls to cell phones without thecustomer's consent is illegal under the 1991 Telephone ConsumerProtection Act, passed to combat harassing phone calls.

The Federal Communications Commission's "do-not-call"registry, set up to block unwanted telemarketing calls, alsooriginated from that act.

HARASSMENT CAMPAIGN ALLEGED

Debt collection calls "can be particularly harassing andtraumatic," said Jonathan Selbin, a partner at law firm LieffCabraser, who represents the plaintiffs. "There are legal waysfor banks and other companies to collect on those debts."

The settlement, subject to court approval, calls for Bankof America to stop calling cell phones unless a customer hasgiven permission. A motion by plaintiffs seeking preliminaryapproval of the agreement was filed on Friday in U.S. DistrictCourt in northern California.

"The core relief in the settlement is that they're changingtheir practices," Selbin said. "We've talked to lots of classmembers about this, and people say, 'I just want the phone callsto stop.'"

The lawsuits accused the bank of repeatedly making calls tocell phones at all hours of the day. Many of the calls wereprerecorded, leaving customers no way to ask for them to stop orvoice complaints to a real person, the lawsuits said.

Sandra Ramirez, a California resident who filed one of thelawsuits, said Bank of America began a "campaign of harassmentby telephone" after she fell behind on her mortgage payments.

In court documents, Ramirez said she asked the bank's debtcollection agents to stop calling her cell phone but was told itwas impossible for them to remove her number from the computersystem.

Ramirez said she got 54 calls from Bank of America to hercell phone, many of them using an artificial or pre-recordedvoice.

FINES CAN HIT $1500 PER CALL

The Telephone Consumer Protection Act has become a favoritetool of plaintiffs' lawyers, as companies face penalties of $500per illegal call, or $1,500 for willfully violating the law.

Bank of America still faces a proposed class action inFlorida accusing it of making repeated robocalls to mortgageborrowers who had asked not to be called. In court documents,the bank denied violating the Telephone Consumer Protection Actor any other law in that case.

Companies including computer maker Dell Inc,Coca-Cola Co, and SLM Corp, or Sallie Mae, havebeen sued over sending unsolicited robocalls or text messages.

Sallie Mae paid $24 million last year to settle its lawsuit,previously the record payout under the Telephone ConsumerProtection Act, according to legal experts.

The Bank of America cases covered by the settlement includeStephenie Rose v Bank of America; U.S. District Court, NorthernDistrict of California, No. 11-cv-02390; Duke v Bank of America,U.S. District Court, Northern District of California, No.12-cv-4009; and Sandra Ramirez et al v Bank of America, U.S.District Court, Southern District of California, No. 11-cv-2008.

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