PAINFUL: Court Denies Arbitration to Lead Buyer in TCPA Class Action Because of this Common– but Avoidable– Mistake

Another reminder for everyone out there buying leads– make sure your name is on the ARBITRATION PROVISION terms and not just the MARKETING PARTNERS list.

We have this issue play out over and over again.

A company buys a lead. The form looks great. Their name is on the marketing partner list. And there’s an arbitration provision in the form.

But when the company gets sued and tries to compel arbitration the court denies the motion.

Why?

Because there is a gap between the marketing partner list and the arbitration clause.

The latest case on the subject is Muhammad v. Rates VIP, LLC 2026 WL 735253 (N.D. Ill. March 16, 2026). There Rates VIP bought leads from TheCoverageGoat.com and Coverage Professor LLC and was sued in a TCPA class action by a plaintiff who claimed she had not visited the website. It moved to compel arbitration based upon the terms and conditions on the websites at issue but arbitration was denied.

Interestingly arbitration was NOT denied on the ground that plaintiff claimed she did not visit the website. This particular plaintiff testified only that she did not “remember” visiting the site and that was not enough to create a dispute of fact:

The problem for Plaintiff is that a party trying to avoid arbitration must identify specific evidence in the record demonstrating
a material factual dispute. See Tinder, 305 F.3d at 736. Plaintiff’s statement that she does not remember having visited the
websites at issue is not evidence of any dispute of fact at all; it instead reflects the absence of knowledge of the relevant
facts. See id. (finding that an averment that one “does not recall seeing or reviewing” an arbitration agreement does not raise
a genuine issue of fact). If Plaintiff had stated that she did not visit the websites at issue, that would create a material dispute
of fact. See Kass v. PayPal, Inc., 75 F.4th 693, 705 (7th Cir. 2023) (finding that a plaintiff’s averment that she did not receive
an arbitration agreement creates a genuine dispute of fact). But because Plaintiff has not done so, the Court finds that she has
not succeeded in demonstrating a genuine dispute of fact as to the formation of an arbitration agreement between Plaintiff and
TheCoverageGoat.com and Coverage Professor LLC

That’s important to keep in mind!

But Defendant still lost because it was not specifically covered in the arbitration agreement itself:

Here, the arbitration clause is not susceptible to the interpretation that a “marketing partner” like Defendant is intended to
benefit from the arbitration agreement. To the contrary, the arbitration agreement states that arbitration shall take place “between
[TheCoverageGoat.com / Coverage Professor LLC] and you or between our subsidiaries, affiliates, or agents and you.” Doc.
12-2 ¶ 50. Defendant presents no evidence that in addition to being a “marketing partner” it is also a “subsidiary, affiliate, or
agent” of TheCoverageGoat.com or Coverage Professor LLC, and therefore it has not shown that it is an intended third-party
beneficiary of the arbitration agreement.

The court was very clear that had the lead sellers paused to properly draft the form Rates VIP would be out of the lawsuit– but it didn’t so they’re stuck:

If TheCoverageGoat.com and Coverage Professor LLC intended to confer this particular benefit upon Defendant, they could have (and should have) stated it explicitly. See Holmes v. Godinez, 991 F.3d 775, 780 (7th Cir. 2021) (“Illinois law imposes a strong presumption against provisions that easily could have been included but were not.”) (internal quotations omitted). Instead, TheCoverageGoat.com and Coverage Professor LLC drafted extremely broadly when dictating the types of disputes that would be subject to arbitration– including those that related to Defendant’s services and much more narrowly when dictating the parties who would be included in that arbitration – excluding Defendant. For these reasons, Defendant cannot compel arbitration.

Ouch.

To the court’s eye the arbitration agreement looked to have been intentionally drafted to screw lead buyers over. Whether or not that is true doesn’t matter– what matters is the language of the form was not sufficient to protect the lead buyer and this is such an easy mistake to avoid!

Notably none of these parties are R.E.A.C.H. members or clients of Troutman Amin, LLP– and you see what the knowledge gap gets you.  Those in the know avoid these sorts of traps for the unwary. This is low hanging fruit folks.

And if YOU want to avoid such traps be sure to attend Queenie’s compliance discussion at Law Conference of Champions IV! It will be the most valuable hour of your year as the masterful Puja J. Amin draws on her years of experience guiding some of the largest enterprises in the nation to help YOU stay safe from easy misses like these.

Chat soon.