With data breaches part of daily life, banks seek freedom to robotext

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The daily threat of cyberattacks has prompted US banks to ask for freedom from restrictions on reaching out to consumers in the event of data breaches.

Banks that call or text customers run the risk of being sued under the Telephone Consumer Protection Act, a federal law from 23 years ago that aims to restrain telemarketing, the American Bankers Association said in a filing Tuesday with the Federal Communications Commission.

Per the TCPA, consumers must consent to be called on their mobile phones, which constitute the only phone in 41% of US households, according to a survey released in July by the Centers for Disease Control and Prevention.

“A single financial institution might be responsible for 50,000 to 60,000 or more potential data security breach notifications per month,” the ABA tells the FCC. “A substantial portion of these automated notifications must be sent to mobile telephone numbers.”

Though the FCC has said that customers who furnish a wireless number give their permission to be called at that number, some courts have rejected the agency’s interpretation, say bankers, who call for an exemption that will allow banks to alert customers automatically in the event of fraud, identity theft and problems that affect the security of their accounts.

Banks, which also want to be able to notify recipients of money transfers, pledge to limit use of the exemption to “a narrowly defined category of informational messages” that have nothing to do with telemarketing.

Cyberattacks on companies have increased 144% since 2010, according to a study published recently by the Ponemon Institute on behalf of Hewlett-Packard. Financial firms and energy companies incurred the largest financial losses after attacks.

A decision last March by the FCC to allow FedEx, UPS and other carriers to text customers that a package is on the way justifies a similar exemption for banks, the ABA says.

Class-action lawsuits charging violations of the TCPA have mushroomed in recent years, a study last year by the US Chamber of Commerce finds. Cell phones carried “expensive usage costs” when the TCPA was enacted in 1991, noted the authors. “Thus protections where put in place for calls made to cell phones and for faxes.”