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What Goes Around Comes Around: Bank sued by father can bring third-party claim against daughter who provided his number as alternate contact

Who ever said parenting isn’t tough? Just ask the Kentucky father who brought a TCPA action against Credit One for allegedly calling his mobile number hundreds of time after his daughter defaulted on her credit card bill.

It turns out that the daughter had added her father’s mobile number as a secondary contact on her Credit One account when she opened the account, and when she defaulted on her bill, Credit One repeatedly called the father’s number. Good news for Credit One is that it has a provision in its cardholder agreement requiring the cardholder to indemnify the bank if they provide a telephone number for which they’re not a subscriber. (“If you provide a telephone number(s) for which you are not the subscriber, you understand that you shall indemnify us for any costs and expenses, including reasonable attorneys’ fee, incurred as a result of us contacting or attempting to contract you at the number(s).”)

In Tucker v. Credit One Bank, N.A., Civil Acton No. 4:17-CV-00066-JHM (W.D. Ky., Jun. 14, 2018), the court granted Credit One leave to file a third party complaint against the daughter for contractual indemnification and negligent misrepresentation based on that provision. Credit One argued that pursuant to the terms of its Cardholder Agreement, by affirmatively providing Credit One with the father’s number as an alternate contact number, the daughter represented that she could lawfully be called at the number to discuss her account, including for the purpose of collecting any unpaid balance. In addition, by providing the father’s number as her secondary contact number and failing to notify it that she could no longer be reached at the number, the daughter, according to the bank, agreed to indemnify Credit One for any fees and costs, including attorney fees incurred as a result of attempting to call her at that number.

After finding that Credit One had shown good cause to modify a scheduling order which had a bar date for bringing in new parties, the court found that it was proper to join the daughter as a third party defendant under Fed. R. Civ. P. 14(a)(1). Basically, the court found that the daughter’s liability to Credit One is dependent on the outcome of the father’s TCPA claims against Credit One, and specifically, that if Credit One is held liable for the father’s TCPA claims, any liability would be the direct and proximate result of the daughter giving his number to Credit One as a secondary contact number and her subsequent default on the Cardholder Agreement. Thus, according to the court, Credit One is attempting to transfer the liability asserted against it by the father to the daughter, the essential criterion of a third party claim.

Tough love for the family, but once again points to the willingness of courts to credit contractual provisions that seek to mitigate TCPA risk. We dare say that this same theory has applicability extending beyond a customer’s provision of another’s number, for example, to agreements requiring a customer to notify the company if they change numbers, and agreeing to indemnify the company for TCPA liability for calls to the number the customer originally provided. As the FCC sorts through its treatment of reassigned numbers, perhaps not a bad interim risk mitigation strategy to consider.

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