Supreme Court Decisions to Impact Auto Finance Industry – RVBusiness


The Supreme Court decided two consumer protection cases this month that impact the automotive finance industry: one that severely hinders the Federal Trade Commission’s ability to seek monetary redress for unfair or deceptive practices; and the other, which clarifies what constitutes an automatic dialing system under the Telephone Consumer Protection Act, according to a report by the Automotive News.

AMG Capital Management v. The Federal Trade Commission

The Supreme Court ruled last week in favor of an asset management company regarding the FTC’s ability to punish companies for false or misleading advertisement.

In the case, the FTC secured $1.27 billion in restitution from the payday lender on the grounds its alleged lending scheme misrepresented loan terms to consumers.

The issue was initially believed to be limited to false advertising enforcement, Hudson Cook partner Mark Rooney wrote in an October 2020 article, and would not affect the FTC’s ability to seek monetary redress for unfair or deceptive acts or practices.

However, the April 22 verdict appears to have introduced a more lengthy process for the FTC, which now must obtain a cease-and-desist order through its own administrative process, then file a separate claim for monetary relief in court.

Facebook Inc. v. Duguid

The court ruled in favor of the social media company in this case, which provides clarity on how companies should define an automatic telephone dialing system under the Telephone Consumer Protection Act.

The case originated in 2014 when Noah Duguid alleged that despite never using social media platform Facebook, he had been sent numerous text messages from the site about issues with his account. The U.S. Ninth Circuit Court determined the text messages infringed on the TCPA, even though the text messages were not the result of a system generating random sequential numbers.

The Telephone Consumer Protection Act, passed by Congress in 1991, prohibits robocalls without the receiving party’s consent, unless “such calls are necessary in an emergency situation affecting the health and safety of the consumer.”

The Supreme Court’s April 1 decision determined just because a business has calling technology to store or dial multiple numbers, it doesn’t automatically subject the company to TCPA liability.

Click here to read the full report by the Automotive News (subscription required).



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