Mortgage lenders that buy leads online through comparison shopping sites can avoid the Federal Communications Commission (FCC) restrictions on robocalls and texts through “one-to-one consent” that was meant to take effect on January 27, 2025.
A recent court case, Insurance Marketing Coalition Limited (IMC) v. FCC, challenged the new consent requirement on numerous grounds, leading the Eleventh Circuit court to vacate the rule from the TCPA.
The one-to-one consent rule stems from the FCC’s December 2023 order under the Telephone Consumer Protection Act (TCPA), aimed to reduce unwanted robocalls and texts to consumers who submit their information to rate comparison websites, such as LendingTree or NerdWallet, when shopping for a mortgage.
Under the FCC's proposed one-to-one consent rule, consumers cannot consent to sending their information to multiple lenders at once; instead, they must consent to each lender individually. Lead generation experts believe that the new requirements would potentially diminish the supply of online leads that some cold-calling lenders have relied on.
“This is a big deal and is going to have a major impact on mortgage lending and advertising,” commented Josh Friend, Founder and CEO of InSellerate, after the December 2023 order was published. “A lot of lenders don’t yet understand the impact but they will when the rates drop and they want leads. Or their online purchase leads go away.”
Now that the Eleventh Circuit court has vacated the requirement, the FCC is back to square one, allowing lead buyers additional time to adapt their business models or, possibly, avoid further consent requirements altogether.
LendingTree, a major lead publisher for mortgage lenders, commended the court for rejecting key parts of the FCC's rule.
"We appreciate the bold leadership of the FCC's new Chairman Brendan Carr and the support of Congressional leaders on this matter," said Doug Lebda, Founder and CEO of LendingTree. "The court's ruling now ensures consumers can continue benefiting from critical financial services while we focus our efforts on preventing unwanted and confusing phone calls."
The Court’s Decision
The U.S. Court of Appeals for the Eleventh Circuit in the case of IMC — a consortium of over twenty entities representing insurance industry stakeholders — versus the FCC challenged the 2023 order on three grounds:
- IMC contends that the FCC exceeded its statutory authority in issuing the 2023 Order. The 2023 Order impermissibly interprets the phrase “prior express consent” to mean “two different things.”
- IMC contends that the 2023 Order violates the First Amendment by “impos[ing] content-based discrimination on marketing calls” without proper justification
- IMC argues that the 2023 Order is arbitrary and capricious under the Administrative Procedure Act (“APA”) because it lacks an adequate factual basis for the new restrictions, fails to respond meaningfully to material comments, and fails to justify its impacts on small businesses.
Afterwards, a unanimous three-judge panel of the Eleventh Circuit issued its decision vacating Part III.D of the FCC’s 2023 Order, which states: “a consumer cannot consent to a telemarketing or advertising robocall unless: (1) the consumer consents to calls from only one entity at a time, and (2) consents only to calls whose subject matter is “logically and topically associated with the interaction that prompted the consent.”
The court found that the FCC exceeded its statutory authority under the TCPA by imposing the new consent restrictions, which conflict with the ordinary statutory meaning of “prior express consent.”
The court stated in its decision: “After careful review and with the benefit of oral argument, we agree with IMC that the FCC exceeded its statutory authority under the TCPA because the 2023 Order’s new consent restrictions impermissibly conflict with the ordinary statutory meaning of “prior express consent.” Accordingly, we grant IMC’s petition for review, vacate Part III.D of the 2023 Order, and remand for further proceedings.”
The court emphasized that the TCPA requires only “prior express consent,” not “prior express consent plus additional restrictions.” Essentially, the consent rule does not necessitate individual consent for each caller. Thus, the court believes that the FCC’s rule effectively restricted consumers’ ability to consent to multiple entities, moving beyond mere implementation of the TCPA.
“The questions we confront are straightforward,” the court decision reads. “First, to give ‘prior express consent’ for telemarketing or advertising robocalls, must a consumer always consent to calls from only one entity at a time (i.e., give one-to-one consent)? And second, can a consumer give ‘prior express consent’ to receive telemarketing or advertising robocalls only when the consented-to calls are ‘logically and topically associated with the interaction that prompted the consent’? The answer to both questions is no, and the additional ‘prior express consent’ restrictions thus fail.”
As a result, the one-to-one consent rule has been voided and is not expected to take effect anytime soon. Yet, in the long term, the FCC could petition the Eleventh Circuit to rehear the case or ask the U.S. Supreme Court to reverse the Eleventh Circuit’s decision.
