FCC Clarifies, Strengthens Consumer Protection
If you're in the business of telemarketing, it's critical to understand the Telecommunications Consumer Protection Act's new provisions.
It's not news that in increasing numbers, consumers rely on their mobile devices for more and more information. Advertisers that are well aware of this trend have taken to promoting their products and services on wireless devices, much to the chagrin of wireless device owners, who often unwittingly pay for the delivery of those ads (based on the number of messages included in their packages), as well as other non-essential, non-emergency information they did not solicit. If you're in the business of telemarketing, it's critical to know and understand the most recent changes and refinements to the existing law.
The Telecommunications Consumer Protection Act (TCPA), legislation originally enacted in 1991 with the intent of protecting consumers by limiting contact from telemarketers, has been revised several times, most recently late last week. With the most recent revisions, the FCC took action to clarify a number of questions that had arisen regarding interpretations of TCPA -- and that spawned a cottage industry of class action attorneys who were only too happy to pursue those uninitiated or unsophisticated advertisers and others about the subtleties of TCPA (note that I left the word "unscrupulous" out. Hope springs eternal... let's assume they all have the purest of motives).
Far from acting randomly or without cause, the FCC, in 2014 alone, received more than 215,000 complaints from consumers about unwanted calls and texts. It takes a ton of time to review that many complaints on a single topic in a single year, so clearly the FCC recognized this as a problem that was not going away. The last version of TCPA included provisions that tackled some thorny issues associated with outbound wireline and wireless device contact. These provisions were, without question, imprecise. By taking this most recent action, the FCC hopes to clarify the obligations of those generating calls and texts. For the record, going forward, I use the words "call" and "text" interchangeably, since for purposes of the TCPA both are similarly viewed under the law.
Although the FCC is still vetting the final rules, its recently released fact sheet makes clear that commissioners and their staffs have heard the cries of not only consumers, but those in the business of communicating with individuals, by phone or text, with or without permission to do so. The FCC's action has been to clarify the rules, thus eliminating some of the legal hairsplitting (there are those who would argue that this is the purpose of law school, but I digress) that has enabled class action attorneys and plaintiffs who have suffered harm (along with those who love a good "get rich quick" scheme) to benefit from some vagaries in the law.
With this background in mind, here are the key provisions of this most recent action. Please note that some of the new clarification affects only wireless users, while others affects landline use as well.
- Do not disturb technology - Carriers, for the first time, have the right to offer consumers the right to purchase blocking capability to prevent unwanted marketing calls to ring through. This applies to wireless and wireline phones, although it's not yet clear whether charitable or political calls, which have been legal to landlines (and not wireless), will be covered.
- Revoking consent to call - An individual who gives consent to receive robocalls and/or texts at some point in the past has the right to revoke such consent "in any reasonable way at any time." This too applies to both landlines and wireless.
- Reassigned numbers can be called once - Numbers that have been reassigned from previous users to new ones are not acceptable targets for telemarketers, with a one-call exception. That is, a telemarketer can make one call to a number in its database that has been provided to a new user before penalties associated with TCPA will attach.
- "Autodialer" definition clarified - The definition of what constitutes an autodialer for legal purposes has been clarified. That is, for purposes of TCPA, any device that has the capability (whether that capability is used or not) constitutes an "autodialer" and is thus subject to TCPA rules. This is a very important clarification (see previous note about legal hairsplitting) because it prevents those telemarketers that skirted the intent of the requirement for consent by claiming that the device they used to make calls were not truly autodialers based on the original definition.
- Third-party consent doesn't exist - Simply because an individual's (Person #2) contact information is located in the contact list of another individual (Person #1) who has given permission to be contacted, Person #2 has not automatically, and by default, granted consent to be contacted by a third-party application downloaded by Person #1.
- Technology doesn't matter (for purposes of TCPA violations) - The underlying technology of call origination is irrelevant. That is, consumer consent is required whether the telemarketer is using Internet to phone/text or traditional landline technology.
- What qualifies as "urgent?" - The terms that define urgent circumstances that waive or limit liability for calls made without prior permission have been defined as very limited. Such calls must be free to the end user, allow for immediate opt-out of future calls and texts, and may not be used for marketing, debtor collection or other non-urgent purposes. Until the final rule is published, so based on the FCC's published Fact Sheet only, it is unclear whether important occurrences like school closings, utility notification and product recalls will be included.
There is no question that the current FCC has taken a strong stance against TCPA violations, even under the previous definitions. The recent decision of City Select Auto Sales, Inc. v. David/Randall Associates, Inc. et al serves as a point of caution. This case dealt with a Pennsylvania commercial roofing company that used a third party to fax ads to companies throughout the U.S. despite repeated consumer complaints. The company was hit with a (...wait for it...) fine of more than $22 million because it failed to meet several key elements of the TCPA's junk fax rules. What's even more shocking is that the amount awarded could have been higher if the junk fax recipients had asked for the allowable treble damages for repeated violations.
If you're concerned about your company being in compliance with the new rules, invest the time and money to know them. A business that relies on reaching potential and existing customers and clients using these technologies can't afford not to!
Editor's note: Since posting this article, the FCC has issued its final TCPA rules. You can find them here.