* 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 Bank of America has
agreed to pay $32 million to settle charges that it made
harassing debt collection calls to customers' cell phones, in
what is believed to be the largest cash payout ever under a 1991
law meant to protect consumers from unwanted calls.
The settlement will resolve multiple proposed class action
lawsuits filed on behalf of 7.7 million of the bank's credit
card and mortgage loan customers, according to court documents.
"We're pleased to resolve this matter," Bank of America Corp
spokeswoman Betty Riess said in an emailed statement on Monday.
"Bank of America denies the allegations, but agreed to settle
the claims to avoid further legal costs."
The bank is the latest of numerous U.S. companies targeted
in lawsuits over automatically dialed "robocalls." The volume of
these calls has reached record levels now that technology makes
it cheap for companies to send out thousands of calls per
minute, said the Federal Trade Commission's website.
Making auto-dialed calls to cell phones without the
customer's consent is illegal under the 1991 Telephone Consumer
Protection Act, passed to combat harassing phone calls.
The Federal Communications Commission's "do-not-call"
registry, set up to block unwanted telemarketing calls, also
originated from that act.
HARASSMENT CAMPAIGN ALLEGED
Debt collection calls "can be particularly harassing and
traumatic," said Jonathan Selbin, a partner at law firm Lieff
Cabraser, who represents the plaintiffs. "There are legal ways
for banks and other companies to collect on those debts."
The settlement, subject to court approval, calls for Bank
of America to stop calling cell phones unless a customer has
given permission. A motion by plaintiffs seeking preliminary
approval of the agreement was filed on Friday in U.S. District
Court in northern California.
"The core relief in the settlement is that they're changing
their practices," Selbin said. "We've talked to lots of class
members about this, and people say, 'I just want the phone calls
The lawsuits accused the bank of repeatedly making calls to
cell phones at all hours of the day. Many of the calls were
prerecorded, leaving customers no way to ask for them to stop or
voice complaints to a real person, the lawsuits said.
Sandra Ramirez, a California resident who filed one of the
lawsuits, said Bank of America began a "campaign of harassment
by telephone" after she fell behind on her mortgage payments.
In court documents, Ramirez said she asked the bank's debt
collection agents to stop calling her cell phone but was told it
was impossible for them to remove her number from the computer
Ramirez said she got 54 calls from Bank of America to her
cell phone, many of them using an artificial or pre-recorded
FINES CAN HIT $1500 PER CALL
The Telephone Consumer Protection Act has become a favorite
tool of plaintiffs' lawyers, as companies face penalties of $500
per illegal call, or $1,500 for willfully violating the law.
Bank of America still faces a proposed class action in
Florida accusing it of making repeated robocalls to mortgage
borrowers who had asked not to be called. In court documents,
the bank denied violating the Telephone Consumer Protection Act
or any other law in that case.
Companies including computer maker Dell Inc,
Coca-Cola Co, and SLM Corp, or Sallie Mae, have
been 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 Consumer
Protection Act, according to legal experts.
The Bank of America cases covered by the settlement include
Stephenie Rose v Bank of America; U.S. District Court, Northern
District 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.