Antitrust Law Daily Wrap Up, PRIVACY—D. Nev.: Credit references’ TCPA and deceptive trade practices claims against payday loan companies can proceed, (Jul 18, 2014)

By Linda O’Brien, J.D., LL.M.

Material issues of fact existed in connection with claims brought by a group of individuals who were used as credit references against several payday loan companies for violations of the Telephone Consumer Protection Act and Nevada Deceptive Trade Practices Act, the federal district court in Las Vegas has held. Thus, the loan companies’ motion for summary judgment was denied (Bates v. Dollar Loan Center, LLC, July 15, 2014, Dawson, K.).

Dollar Loan Center, LLC, DLC Empire, and Clark County Collection Service, LLC are in the business of making high-interest, short-term (payday) loans. Ronald Grider was a credit reference for a borrower at one of the companies, Grider and other individuals used as credit references filed a putative class action suit against the loan companies, alleging that the companies collected references from borrowers under false pretenses and used those contacts primarily for collection efforts, in violation of the Nevada Deceptive Trade Practices Act (NDTPA). The plaintiffs also claimed that the loan companies used an automatic telephone dialing system to contact the plaintiffs, in violation of the Telephone Consumer Protection Act (TCPA). The defendants moved for summary judgment.

TCPA. Under the TCPA, it is unlawful for any person to make a call to a cellular telephone using an automatic telephone dialing system. An automatic telephone dialing system (ATDS) is defined under the TCPA as equipment which has the capacity to store and produce telephone numbers, using a random or sequential number generator to dial such numbers. In rejecting the defendants’ argument that the calls were manually dialed, the court observed that the relevant inquiry was whether the defendants’ equipment had the capacity to act as an ATDS and not its actual function. In this case, the defendants’ conceded that the equipment had the capacity to autodial. Therefore, there was a genuine issue of material fact regarding whether the defendants’ equipment was an ATDS, the court determined.

NDTPA. Additionally, the plaintiff alleged that he was harmed by the loan company calls which resulted in an invasion of privacy, an accrual of additional cellular telephone charges, and loss of allotted cellular telephone minutes. Rejecting the defendants’ argument that one call which was unanswered did not amount to harm, the court concluded that, although any damage was small, a genuine dispute of material fact remained regarding whether the plaintiff was directly harmed by the defendants.

The case is No. 2:13-CV-1731-KJD-CWH.

Attorneys: David H. Krieger (Haines & Krieger, LLC) for Pasquail Bates. Krystal J. Gallagher (Holland and Hart LLP) for Dollar Loan Center, LLC, DLC Empire, LLC, Clark County Collection Service, LLC, and Cash 1, LLC.

Companies: Dollar Loan Center, LLC; DLC Empire; Clark County Collection Service, LLC; Cash 1, LLC.

Cases: Privacy StateUnfairTradePractices NevadaNews