Defendant May Seek Indemnification of TCPA Claims from Intended Recipient

In Tucker v. Credit One Bank, the plaintiff filed suit after receiving hundreds of debt collection calls allegedly via an ATDS after informing Credit One they had reached the wrong number. In investigating the claims, Credit One determined that the calls were intended for plaintiff’s daughter, who provided the plaintiff’s number as a secondary contact when applying for a credit card for which the daughter ultimately went delinquent. Credit One’ agreement with plaintiff’s daughter contained the following indemnification language: “If you provide 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’ fees, incurred as a result of us contacting or attempting to contact you at the number(s).”

As such, Credit One sought leave to file a third-party complaint against plaintiff’s daughter for contractual indemnification and negligent misrepresentation on the theory that she had lied when representing she owned and could be contacted at the plaintiff’s number, which clearly did not belong to her based on the allegations of the complaint against Credit One. The court ultimately sided with Credit One, granting leave to file the third-party complaint. Tucker is a lesson for the compliance and business side as much as it is a lesson for resolving litigation. When businesses review everything they can do to avoid liability under consumer protection statutes like the TCPA, they cannot overlook seeking representations from their customers that they’re providing accurate information and indemnification for suits resulting from misinformation. It may be a rare case where a business decides it’s wise to file a third-party complaint against a customer, but the possibility of counterclaims, third-party claims, or leverage of any kind is not something to overlook.