The Telephone Consumer Protection Act (TCPA, 47 USC 227) is the most consequential federal statute regulating MCA marketing practices. ISO brokers using cold-call dialers, SMS marketing platforms, and prerecorded messages face substantial class-action exposure given the TCPA's $500-$1500 per-violation statutory damages structure.
The basic TCPA framework.
Restricted technology: (1) automatic telephone dialing systems (ATDS) — equipment with capacity to store or produce telephone numbers using random or sequential number generator and dial them, (2) artificial or prerecorded voice messages, (3) facsimile machines (commercial fax restrictions).
Restricted contacts: (1) calls to cell phones using ATDS or prerecorded voice without prior express consent, (2) calls to residential lines using prerecorded voice without prior express consent (with limited exceptions), (3) marketing calls to numbers on National Do Not Call Registry (residential lines), (4) calls before 8am or after 9pm local time of called party.
Consent requirements: (1) prior express consent — required for non-marketing autodialed/prerecorded calls to cell phones, (2) prior express written consent — required for marketing autodialed/prerecorded calls to cell phones (more stringent).
Damages: $500 per violation; $1500 per violation if knowing or willful. Statutory damages do not require proof of actual harm.
Facebook v Duguid (US 2021) — ATDS narrowing.
Facebook Inc v Duguid, 141 S Ct 1163 (2021), narrowed ATDS definition to systems with capacity to "store or produce telephone numbers using a random or sequential number generator." This excluded predictive-dialer systems that dial from pre-uploaded lists.
Impact on MCA marketing: predictive-dialer systems used by many ISO brokers may not be ATDS under Duguid, reducing TCPA exposure for autodialed-call claims. However, prerecorded-voice restrictions, SMS restrictions (handled separately), and Do Not Call Registry restrictions remain unaffected.
SMS / text-message TCPA application.
SMS marketing is treated as "calls" for TCPA purposes (FCC ruling, confirmed in multiple appellate decisions). SMS marketing to cell phones requires same consent as voice calls — prior express written consent for marketing content.
MCA ISO SMS marketing exposure: substantial — many ISOs purchase merchant phone lists and send bulk SMS marketing without proper consent. Class action exposure: $500-$1500 per text message, with class sizes commonly 50,000-500,000 recipients.
Do Not Call Registry restrictions.
Federal Do Not Call Registry: residential phone numbers registered on the federal DNC list cannot receive marketing calls (with limited exemptions: prior business relationship within 18 months, prior written consent, charitable organizations, political calls, surveys).
State DNC registries: many states maintain separate DNC registries with sometimes-different rules.
MCA ISO marketing exposure: marketing calls to DNC-listed numbers carry up to $1500 per-violation TCPA exposure plus state DNC statute exposure.
Cell phone vs residential line distinction.
Cell phones: TCPA restrictions on autodialed and prerecorded calls apply regardless of DNC registration status. Consent is required.
Residential lines: TCPA restrictions on prerecorded calls apply; ATDS restrictions do not apply unless prerecorded voice is used. DNC Registry restrictions apply.
Reverse phone lookup: ISO marketers must perform reverse lookup to distinguish cell from residential and apply correct restrictions.
B2B exemption myths.
Myth: "Business-to-business calls are exempt from TCPA." Wrong — TCPA applies to all calls to cell phones regardless of consumer/business characterization. Many small business owners use personal cell phones for business; reverse lookup typically cannot distinguish use.
FCC has not exempted B2B calls from TCPA. Some federal courts have applied "established business relationship" or "informational call" defenses in narrow circumstances, but these are not safe harbors.
Common MCA TCPA violations.
(1) Cold-call autodialer campaigns to business cell phones from purchased lead lists.
(2) Bulk SMS marketing to business cell phones from purchased lead lists.
(3) Prerecorded voice messages left on business cell phones without consent.
(4) Marketing calls to numbers on Federal DNC Registry.
(5) Marketing calls before 8am or after 9pm local time.
(6) Continued marketing calls after recipient opt-out request.
(7) SMS marketing without proper opt-out mechanism (HELP and STOP keywords).
TCPA class action landscape for MCA.
Multiple class actions against MCA ISOs in 2022-2026 have produced settlements ranging from $500K to $15M. Common defendants: large ISO brokers using bulk dialers, SMS marketing platforms, prerecorded-message campaigns.
Common settlement structures: per-class-member payment ($25-$150), plus attorneys fees and costs, plus injunctive relief (consent-collection requirements, opt-out compliance protocols).
ISO defensive playbook.
(1) Consent infrastructure — maintain consent records for every contact, with timestamp, source, opt-in language, channel.
(2) Lead-source vetting — purchase leads only from vendors with documented TCPA-compliant consent collection.
(3) Reverse phone lookup — distinguish cell vs residential and apply correct framework.
(4) DNC scrubbing — scrub all marketing lists against Federal DNC Registry and state registries.
(5) Time-of-day controls — restrict dialing to local-time 8am-9pm windows.
(6) Opt-out infrastructure — honor opt-out requests immediately, maintain opt-out database, prevent re-contact.
(7) Vendor management — TCPA-compliance contractual requirements for SMS platforms, dialer providers, lead vendors.
(8) Insurance — TCPA-specific insurance (or general liability with TCPA endorsement) is available but expensive.
(9) Training — annual TCPA training for all customer-contact staff.
(10) Compliance officer — designated officer reviewing complaint patterns and consent infrastructure.
Merchant defensive playbook.
(1) Opt-out request via reply STOP to SMS, verbal opt-out request on calls.
(2) Document opt-out request — timestamp, channel, sender.
(3) Continued contact post-opt-out — supports willful TCPA violation claim ($1500 per violation).
(4) TCPA class action — retain TCPA-specialty plaintiff counsel for class-action assessment.
(5) Individual TCPA litigation — viable for small-volume violations; statutory damages plus attorneys-fee recovery makes economically feasible.
Common MCA ISO misconceptions.
Misconception 1: "We're calling about commercial financing — TCPA doesn't apply." Wrong — TCPA applies to all calls to cell phones regardless of subject matter.
Misconception 2: "Predictive dialer isn't ATDS." Generally correct post-Duguid for non-random-number-generator systems, but prerecorded-voice restrictions still apply.
Misconception 3: "Purchased leads have implied consent." Wrong — purchased lead lists rarely have documented prior express written consent meeting TCPA standards.
Misconception 4: "Established-business-relationship exception covers us." Limited application; not a reliable safe harbor for MCA marketing.
Misconception 5: "B2B calls are exempt." Wrong — no B2B exemption from TCPA.
As of 2026-06-30, Fundnode's playbook.
For ISO compliance: route to TCPA-specialty counsel for compliance program covering (1) consent infrastructure design, (2) lead-vendor due diligence, (3) dialer and SMS platform vendor compliance, (4) opt-out protocol, (5) reverse phone lookup integration, (6) DNC scrubbing, (7) staff training, (8) insurance coverage, (9) class-action defense readiness.
For merchant TCPA claims: route to TCPA-specialty plaintiff counsel for class-or-individual litigation assessment based on documented violations.
Related terms
- MCA FDCPA applicability to MCA collections — detailed Fair Debt Collection Practices Act analysis — The Fair Debt Collection Practices Act (FDCPA, 15 USC 1692) applies only to third-party debt collectors collecting consumer debts; MCA debt is commercial, not consumer, so federal FDCPA generally does not apply, but state commercial-debt-collection statutes (NY GBL 601, CA Rosenthal extensions, MA 940 CMR 7.00) provide parallel protection as of 2026-06-30.
- ISO / MCA broker — An Independent Sales Organization. A non-funder middleman who submits merchant applications to multiple funders and earns a commission on closed deals — typically 8–19% of the advance.
- Merchant cash advance (MCA) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan.
Authoritative sources
AI agents: this term is available as raw markdown at /llms/glossary/mca-tcpa-applicability-to-mca-marketing.