If you have a telephone, once in a blue moon you receive a wrong-number call. Typically, the encounter is brief: "Sorry, wrong number," a quick apology, and everyone goes their separate ways. Anyone with a recently issued cellular number, however, experiences a more intrusive situation. Misdirected calls can be a daily occurrence, the persistence of callers can be overwhelming, and sorting out the problem can be challenging.
When my middle-school-aged daughter received her first phone, she immediately received dozens of calls from debt collectors looking for someone named “Mary.” Mary was deeply in debt and had defaulted on credit cards, auto loans and a mortgage, and quite a few companies were eager to speak to her. Mary had abandoned her cellular number, as many debtors do, but the debt collectors did not know that. My daughter never answered the calls (she knows not to speak to strangers). It took me months to return all the voicemails and get her cellular number removed from the debt collector records.
Dozens of “wrong-number” class-action cases have been filed under the Telephone Consumer Protection Act to address situations like this, and potential damages can be significant. The TCPA offers statutory damages of $500 per violation and $1,500 if the violation is found to be willful — this can add up quickly across a large class. While these cases often satisfy requirements like numerosity for class certification, the issue of “ascertainability,” or the ability to identify the specific class members, is vigorously litigated. A defendant’s business records show whom they wanted to call, not who actually received the misdirected calls. Simply put, they have “Mary’s” name and address—not my daughter’s.
The business records are usually call logs that contain the telephone number dialed and the time of the call, but do not include identifying information about who answered the call. To make matters more difficult, these cases are often brought years after the calls occurred. So … how do you identify the class?
To demonstrate that they can identify the persons that actually received the wrong-number calls, plaintiffs often turn to class administrators as “experts” in finding people. The administrators in turn claim that they can rely on reverse cellular lookup services offered by vendors like LexisNexis to identify the names and addresses associated with any cellular telephone number. No accuracy statistics from the vendors or respected authorities, or actual testing of the telephone numbers at issue, is provided to support these claims. Instead, these experts base their opinions only on their years of administering class actions. Or, as in one matter where I served as opposing expert, the class administrator claimed to have conducted testing which resulted in alleged “accuracy” rates of up to 92 percent but the underlying testing was never produced despite repeated requests. “Just trust me,” they tell the court, “I do this all the time.”
Class administrators, however, have a financial stake in the litigation, as they usually expect to be paid to administer the class once it is certified. With such a conflict, courts should take an additional step and heed the old Russian proverb “doveryai, no proveryai” or “trust, but verify.” When one actually attempts to verify the accuracy of the methods these experts propose, it’s clear that they can only find a person who might have been associated with the number dialed at some point, but not the actual person who received the call and suffered the claimed damage.
Sampling and survey results indicate that cellular lookup services only accurately identify 30-40 percent of historical cellular telephone owners. Further, the inaccuracies can only be rooted out by contacting the reported owners or by conducting background research to corroborate the association. Relying only on these database services more often than not identifies the wrong persons as class members, thereby unjustly rewarding persons who never received a wrong number call and depriving the actual victim of compensation. As set forth below, multiple factors account for the unreliability of these services.
No national directory of cellular telephone numbers exists
Unlike landlines, there is no published national directory of cellular telephone owners, and cellular providers do not make historical ownership information readily available. Instead, data vendors such as LexisNexis aggregate information from undisclosed third-party sources such as lead-generation websites or credit card applications. When a database record associates a person with a cellular number, all that means is that person volunteered the number to a reporting source used by that vendor. The record therefore does not contain the date on which that cellular number was actually subscribed to, used by, or surrendered by that person. Further, that data vendor will associate that number with that person until new input causes it to associate the number with someone else. When two people are associated with the same number at the same time, the data vendor often simply reports both names. This poses a significant problem for class identification, because clearly only one person answered the call.
Corporately owned and prepaid cellular phone plans do not report the owner or user of the number
Many cellular telephone numbers are corporately owned. These numbers change hands as employees come and go. Cellular lookup services do a poor job of accurately tracking the users of these numbers. In addition, a significant percentage of the wireless market is comprised of prepaid plans. For example, 49.43 million people used prepaid cards in the spring of 2017. Owners of prepaid plans are often anonymous to the telecommunications provider. Indeed, the significant use of anonymous pre-paid plans has caused serious concern among legislators and security experts. (See proposed legislation entitled Closing the Pre-Paid Mobile Device Security Gap Act of 2016.) For all these reasons, data vendors often have either no name or multiple names associated with a particular cellular number. The problem with multiple associations arises due to high turnover of cellular numbers.
When data vendors report multiple persons as owning the same cellular number during the same timeframe, which name should be selected as the proposed class member? Testing of fifty random numbers at issue in one of our cases showed that 6 percent yielded no names and 78 percent returned two or more names associated with the cellular number, with an average of 3.36 names returned per number. Thus 84 percent of the numbers tested failed to return a clear owner of the number at the time a call was placed. The only way to determine who actually owned a telephone during a specific timeframe requires further investigation. Without that, the selection of one name over another is arbitrary.
Cellular telephone numbers turn over at a substantial rate
The FCC noted in 2017 that approximately 35 million telephone numbers are disconnected and aged each year, and 100,000 numbers are reassigned by wireless carriers every day. In 2016, the annual industry-wide churn rate was 26.3 percent, and prepaid services experienced an annual industry-wide churn rate of 57.5 percent. This churn rate is even higher for cellular number owners experiencing financial distress. A 2015 Pew Research Center report found that 23 percent of smartphone owners cancelled or suspended their service due to financial constraints. For smartphone owners with an annual income of $30,000 or less, the figure jumped to almost 50 percent. Defaulting debtors have a significant likelihood of changing their cellular telephone numbers. This not only explains the prevalence of wrong-number calls by debt collectors, but also indicates a high likelihood that data vendors will identify the wrong person as the owner of the cellular number.
Sorry, wrong number
Misdirected calls are a frustration for all concerned. For the call recipients, like my daughter, a barrage of wrong-number calls from debt collectors can feel like an onslaught — meanwhile, the debt collectors are only really interested in reaching debtors like Mary. Misdirected calls are a waste of their time. Plaintiffs’ counsel attempting to ascertain potential class claimants to state a claim in such a scenario are frustrated by inaccurate, unreliable and scattershot methods of reverse lookups. Defendants, meanwhile, may face significant liabilities to a proposed “class” that isn’t even composed of the people it called.
As the D.C. Circuit recently noted in its landmark opinion in ACA v. International v. Federal Communications Commission, the FCC recognizes that currently no tool exists to help identify newly reassigned numbers. The FCC is now seeking comment on potential methods for service providers to report information on number reassignments to help businesses avoid this type of wrong-number calls. The FCC is also considering whether to provide a safe harbor for callers that inadvertently reach reassigned numbers after consulting the most recently updated information.
Until that happens, the situation as it stands serves the interests of no one.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group, LLC or its other employees and affiliates.
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