• Think Twice Before You Dial: New FCC TCPA Rules Went into Effect Yesterday
  • October 17, 2013
  • Law Firm: Edwards Wildman Palmer LLP - Boston Office
  • Companies engaged in text marketing campaigns, as well as traditional telemarketers, should take note that today, October 16th, marks the implementation of new FCC rules with respect to the Telephone Consumer Protection Act (TCPA). The stated goal is to bring the FCC’s rules with respect to the TCPA closer in consistency to the FTC’s Telemarketing Sales Rule (TSR).

    Originally passed in 1991, the TCPA is intended to protect consumers from unwanted calls, faxes and text messages, and it generally prohibits the use of “autodialers” to send non-emergency calls to consumers without their prior express consent. The TCPA applies equally to landline and mobile telephones, and in the mobile context, it has been held to prohibit the sending of unsolicited advertising messages via text (“SMS”) or other mobile protocol to consumer mobile devices.

    As background, the TCPA only applies to calls/texts placed using an automatic telephone dialing system (ATDS). The FCC has defined an ATDS as equipment which has the capacity (a) to store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers. It’s important to note that manually dialed numbers are not covered by the TCPA. Often the determination of whether an ATDS has been used is fact specific.

    The TCPA provides for a private right of action and includes a $500 statutory penalty which can be trebled if the violation is willful. In light of the potentially large statutory damages, the TCPA has been a favorite of the plaintiff’s bar, and companies engaged in text marketing or telemarketing should be aware that the new rules may very well lead to a new slate of putative class action claims.

    The specific changes going into effect this month are:

    1. Prior Express Written Consent is required for all autodialed or prerecorded calls to wireless numbers and residential lines

      The FCC noted that while the TCPA is silent with respect to the form of express consent required, it believes that prior, written consent is the best manner to implement the protections of the TCPA, especially as more and more consumers shift to only having a mobile phone in lieu of a land line. In addition, the shift to prior written consent eliminates the potential confusion by aligning the requirements of the TCPA with the TSR, which already requires express prior consent.

      The FCC’s new rule requires that a consumer’s written consent to receive telemarketing robo-calls “must be signed and be sufficient to show that the consumer: (1) received ‘clear and conspicuous disclosure’ of the consequences of providing the requested consent, i.e. that the consumer will receive future calls that deliver prerecorded messages by or on behalf of a specific seller; and (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designates.” The rule further requires that this consent must not be a condition to the purchase of goods or services.

      Fortunately, the FCC rule permits consent obtained in compliance with the E-SIGN Act as meeting the requirements of the rule, including permission obtained via e-mail, website form, text message, telephone key press, or voice recording. Nonetheless, when relying on databases built by third parties, it is a good idea to enquire about the timing of any consents. If a mobile number in the database has been re-assigned to a new consumer, then the consent previously obtained may no longer be valid.

    2. The Elimination of the “Established Business Relationship” Exemption

      Similar to its desire to make the TCPA more consistent with the TSR, and to address consumer complaints, the FCC has eliminated the “established business relationship” exemption, which it had first recognized in 1992. In the view of the FCC, any increased cost or inconvenience resulting from the elimination of the business relationship exemption is offset by a company’s ability to use E-SIGN to obtain express prior consent.

    Plaintiffs’ Lawyers are on the Look-Out for Violations

    While the FCC expects there to be a learning curve associated with the implementation of these new rules, plaintiffs’ lawyers, including class action lawyers, are unlikely to be as forgiving. As mentioned above, given the private right of action provided for in the TCPA, as well as the statutory damages of $500 per allegedly impermissible call/text, with the potential for treble damages, we expect plaintiffs’ lawyers to actively monitor companies’ compliance with these new rules, as well as the TCPA in general. Thus, it is critical for any advertiser engaged in text-marketing or robo-calling to closely review its existing practices to insure that they comply with the new TCPA rules and requirements, and adopt protocols that will allow it to establish that prior, written consent was properly obtained.

    In light of the foregoing, to reduce the risk of becoming the target of a plaintiff’s class action claim for TCPA, we recommend companies undertake the following:

    1. Determine whether you are using an ATDS and if the TCPA applies to you;

    2. Obtain verifiable, express, prior, written consent (even from those with whom you have an established business relationship) and keep good records to prove you have the consent;
    3. Obtain consent to send one final text confirming cancellation of a text messaging campaign (see our previous Digilaw post;
    4. Examine your existing databasesand those of your vendors, and understand how the database was created, and whether the consent was adequate to meet the new rules;
    5. Eliminate any numbers that you cannot confirm comply with the new consent rules; and
    6. Review your agreements with third party vendors to ensure they are required to comply with the new rules and provide for adequate indemnification.