Agency Matters: Seventh Circuit Rejects Expansive TCPA Vicarious Liability Theory

If your company relies on lead generators, marketing vendors, or other third parties to place telemarketing calls, a new Seventh Circuit decision provides important guidance on when your business may, and may not, be responsible for their mistakes.

In Hossfeld v. Allstate Insurance Co., 2026 U.S. App. LEXIS 18430 (7th Cir. June 24, 2026), the Seventh Circuit reversed summary judgment against Allstate, holding that the plaintiff failed to show Allstate was vicariously liable for calls placed by a downstream telemarketing company.

The calls were made by Atlantic Telemarketing Center. Allstate’s independent insurance agents hired Transfer Kings, which then hired Atlantic without Allstate’s knowledge. Although the plaintiff had previously asked to be placed on Allstate’s internal “do-not-call” list, the court concluded that traditional agency principles did not extend liability to Allstate.

For businesses, the court's opinion reinforces that using third-party marketers does not automatically make a company liable for every Telephone Consumer Protection Act (TCPA) violation committed somewhere down the vendor chain. Instead, plaintiffs still must establish a recognized agency relationship.

The court rejected three vicarious liability theories.

First, the plaintiff failed to establish subagency. Even if Allstate's agents had authority to hire outside telemarketers, there was no evidence that Transfer Kings had authority from Allstate to appoint another telemarketer. The court emphasized that authority must exist at each level of delegation.

Second, the court rejected apparent authority. Apparent authority must come from the principal's own statements or conduct, not statements by the alleged agent. Atlantic’s claim that it was calling on Allstate’s behalf was not enough.

Third, the court found no ratification. Allstate did not knowingly accept a benefit from the specific calls to the plaintiff. The court also noted that Allstate investigated the complaints and prohibited its agents from using the vendors after learning of the issue, undermining any claim that it ratified the conduct.

The court also clarified that treble damages under the TCPA require knowing or reckless conduct. Merely volitional conduct is not enough.

What does this mean for businesses? While the decision is favorable for companies using outside marketing vendors, it is not a free pass. Strong vendor agreements, clearly defined authority, TCPA compliance requirements, and prompt responses to complaints remain critical to reducing litigation risk.

The decision does not eliminate TCPA exposure. It does, however, reaffirm that traditional agency principles continue to govern vicarious liability, making careful vendor management an important part of any telemarketing compliance program.