Verizon Sues Its Debt Collector for $6.1M Spent in TCPA Settlement

CBE Customer Solutions removed to U.S. District Court in Manhattan a complaint in which Verizon Wireless alleges its debt-collection agency is guilty of breach of contract, said CBE's notice of removal Thursday (docket 1:22-cv-08703). The carrier alleges that CBE “refused to comply” with an indemnification agreement between the parties, costing the carrier nearly $6.1 million in damages and court costs spent in negotiating, finalizing and executing a Telephone Consumer Protection Act class settlement. CBE does not concede that the allegations “state a valid claim under applicable law,” it said in the notice.

An April 2014 master services agreement provides that CBE must indemnify Verizon for fees and costs that the carrier incurs “in defending any claims arising out of CBE’s services,” said the complaint, originally filed Sept. 9 in New York Supreme Court in Manhattan. A CBE employee in 2016 “negligently failed to remove a non-customer third party from one of Verizon’s call lists,” it said.

CBE’s negligence unleashed “a chain of events” that led to a TCPA class action against Verizon, and ultimately a multimillion-dollar settlement payment by Verizon to the class, said the complaint. It was “exactly the type of scenario contemplated by the parties’ indemnification agreement,” it said. “CBE has no excuse for its refusal to indemnify Verizon for the millions of dollars of loss caused by CBE’s error.”

For a full year ending in July 2016, a consumer named Robin Breda began receiving debt-collection calls from Verizon’s “interactive voice response” system, except she was not a Verizon customer, said the complaint. When Breda spoke to a CBE employee about delisting her number, the employee assured her “the calls would cease,” it said. When the employee forgot to remove her number from the “relevant” Verizon call lists, the calls to her number continued, it said.

Breda ultimately filed a class-action lawsuit in U.S. District Court in Boston accusing Verizon of TCPA violations, said the complaint. The court approved the final settlement May 2, it said. “Absent the failure of the CBE employee to delist Breda’s number,” she “would not have filed her lawsuit,” it said. CBE has refused to indemnify Verizon, “and was only willing to pay for a limited defense arising from specific instances involving CBE agents,” it said.