A Michigan lender is facing a class action lawsuit over its alleged use of artificial intelligence voice agents for outbound marketing calls in violation of federal laws.
In a complaint filed this week in an Eastern Michigan federal district court, Pennsylvania homeowner Brennan Landy accused
The call ran afoul of the Federal Communications Commission's
Attorneys claimed that Mortgage One, either directly or through a third-party vendor, conducted "a wide-scale telemarketing campaign that features the repeated making of unsolicited calls which feature an artificial voice to consumers' cellphones without any prior express consent."
The plaintiff suspected the voice on the other end of the line was an AI agent due to awkward pauses and odd inflections that typically would not appear in human-led conversations, according to the filing. The agent also did not respond naturally to Landy's responses, it said.
"Landy played along in order to learn more about who was calling him without his consent. The artificial voice continued by saying 'We help a lot of people in your situation do a cash-out refinance so you can pay off other high interest debt or do home improvements,'" Landy's lawyers wrote.
The agent eventually transferred Landy to a human employee, allowing him to fully determine Mortgage One initiated the call.
In addition to requiring prior consent, the FCC specifies calls conducted by AI agents must be disclosed at the start of the conversation, which Mortgage One failed to do, the filing said.
Landy's phone number is also on the national Do Not Call registry, which bars the lender from making any type of unauthorized solicitation. Landy seeks to represent individuals who received similar calls that violate the TCPA through a class action lawsuit.
A ruling against the lender would subject it to a fine of $500 per infraction. A judge's determination that the noncompliant calls were made willfully and knowingly would increase the penalty on Mortgage One to as much as $1,500 per violation.
Mortgage One did not reply to a National Mortgage News inquiry prior to article publication. The Clawson, Michigan-based lender is able to originate loans in 45 states, according to the Nationwide Multistate Licensing System.
The spotlight falls on AI voice agents
The complaint lands as the technology industry grapples with growing scrutiny of artificial intelligence voice agents used for marketing purposes as stories of noncompliance emerge. Although many businesses, including mortgage lenders,
Along with the legal penalties for using software that fails to adhere to TCPA regulations, improper vetting of third-party providers can also bring additional reputational risks from tools that hallucinate, and in
While the Landy case is among the first AI-related TCPA complaints to hit the mortgage industry, a related class action suit played out in Illinois federal court last year. In the lawsuit, the plaintiff sued medical marketing firm Altrua Healthshare following the receipt of five nondisclosed prerecorded calls in late 2024.
The parties reached a tentative settlement in mid February to resolve their case.
