April 1, 2016

Lawsuit Alleges Firm Used Smartphone App to Secretly Troll for TCPA Cases

A recent court filing in a lawsuit by a former partner of a plaintiffs’ firm details the allegedly deceptive tactics she says the firm used to bring in new clients—many of whom had no idea that they were part of a lawsuit.

The suit against Lemberg Law, a plaintiffs’ firm in Connecticut, may shed new light on the sometimes-shady world of litigation using the Telephone Consumer Protection Act, or TCPA – a twenty five-year-old law originally aimed at stopping unwanted telephone solicitations that is now being used to sue businesses over communications via smart phones and text messages. 

The plaintiff in this case, Tammy Hussin, alleges that the firm used information obtained through a cell phone app to file TCPA claims against businesses, without the individual’s knowledge or consent.  According to Hussin, the firm made a deal with PrivacyStar, a telephone application that identifies who is calling and why.  The PrivacyStar application allows users to file a complaint with the Federal Trade Commission (FTC) when they receive an unwanted phone call.  The FTC handles the National Do Not Call Registry and users were providing information to potentially stop telemarketing calls.  Hussin claims that PrivacyStar was providing Lemberg with the names and numbers of individuals who used the app to file a complaint.

What the users supposedly did not know is the Lemberg firm was trolling the data to seek out potential, and often unsuspecting, clients for TCPA litigation.

Ironically enough, the lawsuit alleges that the firm—supposedly seeking restitution for individuals inundated by unwanted calls—was itself pestering these app users with more unsolicited calls. 

Hussin claims that employees of Lemberg Law would use the purchased data to call up the app users and ask for proof of the unwanted calls.  The employees allegedly did not reveal they worked for a law firm or that they needed the information to pursue litigation on the individual’s behalf. The lawsuit alleges that some app users even thought they were clarifying their complaint with the FTC.  The employee would purportedly send the individual a link that once clicked, unbeknownst to them, would send a request for legal services to Lemberg.

But there’s more. According to the lawsuit, some of the app users were never contacted by the law firm, but employees were instructed to mark them down as “contacted” anyway, including their names in TCPA claims, even though the facts had not been checked nor, apparently, had consent been obtained.

Hussin claims some plaintiffs only found out that they were a party in a lawsuit when they received a settlement check in the mail. But it gets better. 

The settlement check the individual received allegedly would have costs deducted from Lemberg – costs that the firm supposedly never even encountered or were grossly inflated.  For example, a $595 charge for PrivacyStar, when the cost to the firm was actually $45 per claimant.  

The details of the allegations against Lemberg are frightening.  If true, they would constitute egregious examples of attorney misconduct, abuse of the justice system and breach of data privacy.  This case sheds more light on how the outdated nature of the TCPA can create incentives for some plaintiffs’ firms to line their own pockets rather than help consumers.

The TCPA originally came about in the 1990’s to stop the onslaught of telemarketing calls, but the law has not been updated to reflect the profound changes in technology.  A violation of the TCPA can include a call from a device capable in the future of making “automatic calls to sequential numbers” – which these days is practically every modern phone, unless the business is still using a rotary device.

In the 90’s about 2 percent of the population owned cell phones, compared to over 90 percent in 2016.  Thanks to the advancement in technology and prevalence of cell phones, businesses are easily able to communicate with their customers through texts and cell calls. 

But plaintiffs’ lawyers are using the telemarketer law to sue over innocuous communications that are only worthwhile because each call can payout up to $1,500.  Multiply that times the thousands of complaints that PrivacyStar processes each month and the TCPA has created an opportunity for lawsuit abuse.

In fact, TCPA litigation nationwide has increased over 940% in the last five years.

Other examples of TCPA lawsuits include a case against Walgreens for contacting their customers with a reminder about prescription renewals, and a lawsuit against the Los Angeles Lakers for sending a response thank you text to fans who voted—via text—for their favorite song to be played during a game.

The allegations against Lemberg Law suggest that, when tens of millions of dollars are up for grabs, plaintiffs’ firms may be willing to take extreme measures to take advantage of the TCPA. If the allegations in this case are true, then mark this one down as the “poster child” example of why action is needed to fix the TCPA.  

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