Allstate, other insurers among those facing robocall lawsuits

Image of rows of seated robots making phone calls on computers.

By Doug Bailey

Surprise. You’re still getting annoying robocalls from companies even when you registered your phone number on the National Do-Not-Call list.

You’re not alone. A raft of lawsuits across the country seeking class-action status allege marketers, particularly insurance companies, are guilty of knowingly cold-calling consumers by the millions even when the targeted recipients have placed their names on the DNC list to stop the offending calls.

The suits are increasing pressure on companies to change their telephonic solicitation procedures or face huge penalties.

The biggest among the insurers, Allstate, has been hit with at least three such suits alleging violations of the Telephone Consumer Protection Act, which governs telephone solicitation. The suits, all in Allstate’s home state of Illinois, say the insurer and its vendors have been on notice since at least 2019 that it was in violation of the TCPA, “yet Allstate has allowed the violations to continue,” reads one such suit.

The most recent case, filed in July against the giant insurer on behalf of consumers in Georgia, New York, Missouri, and Maryland, alleges Allstate was aware that its approved vendors placed multiple telemarketing calls to people who had not provided the insurer with express written consent to receive the calls and had registered their phone numbers with the National Do-Not-Call List.

The number of violating calls could total in the millions, with each one carrying hundreds of dollars in potential fines. Lawyers in the case asked the court to force Allstate to share its DNC lists and after a protracted fight Allstate eventually complied.

Possible $57B robocall exposure

Writing in the National Law Review, attorney Sean Kay said “after cross-referencing Allstate’s internal DNC with that of [its Vendor], it was found that Allstate’s internal DNC was short by more than 115,000 numbers. That means Allstate faces exposure of at least $57 billion owing to a potential procedure gap – and that’s if only one call were placed to each number.”

Kay said that if a summary judgement is approved by the court the liability and willful violation exposure could rise to a potential $150 billion.

“In a case involving only a single lead source,” he said.

Allstate has already settled one class action dispute alleging illegal robocalls and the others are still pending. Allstate did not respond to requests for comment.

Another almost identical case has been filed against Lumico Life Insurance Co. of New York by a California resident.

“The fact remains that the plaintiff’s number was on the DNC list, there was no consent, and no existing-business-relationship exception seems to apply,” said Kay, associate attorney at Troutman Amin LLP. “And now, the plaintiff lists her demand at $5 million. That’s a large chunk of change for something that was so avoidable.”

Agents' and vendors' compliance crucial

Kay, who closely follows alleged TCPA violations, advises companies to demand greater compliance by their agents and third-party vendors.

“TCPA compliance is really, really, important,” he says. “Invest in this now so you aren’t faced with a debilitating TCPA class action suit in the future. These things are so avoidable.”

It’s a lesson that some companies are seemingly slow to learn.

A Connecticut insurer, Family First Life Insurance, and its corporate owner, is facing at least two lawsuits alleging TCPA violations in Michigan and Florida, and in May settled a third. Terms of the settlement are confidential, according to court filings.

The lawsuit, by a single Michigan resident, accused Family First Life of contacting him three times via text messages even though he said his number has been on the Do-Not-Call List since 2003.

“One text might possibly be considered an error, but three texts over three different days are willful violations,” the plaintiff, Don Campbell, said in his complaint. Campbell sought $4,500 for the violations and additional damages related to privacy violations.

Family First Life is facing another suit in Michigan that also lists four other companies - United of Omaha Life Insurance, Americo Financial Life and Annuity Insurance, Great Western Insurance, and our Senior Care Inc. – as well as several individuals for alleged illegal phone calling.

The suit says the plaintiff, Mark Dobronski, has been “besieged with telemarketing calls hawking such things as alarm systems, Google listings, automobile warranties, health insurance, life insurance, credit cards, and even financial miracles from God.”

In Florida, Amerilife has been hit with a potential class-action suit for TCPA violations. The complaint says the plaintiff, Daniel Costa, received multiple telemarketing calls from Amerilife and its subsidiaries, some of which were “spoofed” to appear to be coming from a caller in his area code and tried to get Costa to sign up for Medicare services. Costa said he contacted Amerilife to complain about the calls and was told the company had no record of the outgoing call and that they do not use pre-recorded messages.

FCC: Unwanted calls are No. 1 complaint

Although the TCPA has been in force since 1991, in response to widespread pubic outrage over intrusive telemarketing calls to homes and businesses, the Federal Communications Commission said unwanted calls and texts continue to be the number one complaint to the authority. There are thousands of complaints to the FCC every month on both telemarketing and robocalls, the FCC says. Congress explicitly found that robocalling is an invasion of privacy yet they continue with apparent willful disregard of the Do-Not-Call registry. The FCC has said that sellers can be held liable for TCPA violations even when made by third-party telemarketers.

“A company on whose behalf a telephone solicitation is made bears the responsibility for any violation of our telemarketing rules and calls placed by a third party on behalf of that company are treated as if the company itself placed the call,” according to the TCPA.

Pennsylvania law school student Andrew Perrong has become infamous for his serial lawsuits alleging TCPA violations. Although his aggressive pro-se pleadings sometimes find him out of favor with courts his victories often point to some of the largely unknown dangers for companies in that a single call could violate multiple provisions of the TPCA and be assessed multiple penalties.

In one of Perrong’s robocall cases, he alleged that 26 prerecorded calls that he received without his consent should result in $195,000 worth of damages due to each call allegedly violating five provisions of the TCPA, as well as being willful violations resulting in treble damages. Although the court didn’t completely agree with Perrong’s math, he still was awarded $39,000 for the prerecorded calls and DNC list claims.

“Many people think that a TCPA claim really only will come knocking on the big bad telemarketing companies’ doors,” said attorney Kay. “But it can apply to anyone, even when there was only a call or two at issue.”

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].