The Telephone Consumer Protection Act (TCPA) is a favorite of the plaintiffs’ class-action bar because it provides for statutory damages of up to $1,500 for knowing or willful violations. With some exceptions, the TCPA prohibits, among other things, unsolicited marketing faxes as well as calls and text messages using autodialers or prerecorded voices. See, e.g., 47 U.S.C. §227. Because the TCPA and its regulations impose many complex and technical requirements, the inevitability of innocent slip-ups combined with an active plaintiffs’ bar seeking out clever ways to argue that lawful practices are actionable can entail massive potential liability for businesses.
In just over two months, on October 16, 2013, FCC regulations that narrow two key safeguards for businesses under the TCPA will go into effect.
The first change involves the exception from liability for telemarketing calls or text messages placed with the “prior express consent” of the recipient. 47 U.S.C. §227(b)(1). Previously, FCC regulations recognized that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” In re Rules & Reg’s Implementing the Tel. Consumer Prot. Act of 1991, 7 F.C.C.R. 8752 (1992).
But under the FCC’s new interpretation (pdf), with some exceptions, a business qualifies for the “prior express consent” exception from liability only if the consumer has physically or electronically signed a written agreement that “clearly authorizes” the business to send “advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice” to a specific “telephone number.” 47 C.F.R. § 64.1200(f)(8). The agreement must have a “clear and conspicuous disclosure” that signing the agreement is optional—it can’t be a condition of “purchasing any property, goods, or services”—and that a consumer doing so consents to receiving these types of calls. Id. § 64.1200(f)(8)(i).
The second big change going into effect on October 16, 2013, is the elimination of the “established business relationship” exception. Currently, a business can avoid TCPA liability for otherwise prohibited telemarketing calls to residential lines if the business has an “established business relationship” with the plaintiff by virtue, for example, of a purchase from the business within the last 18 months or an inquiry about a product or service within the last three months. Id. § 64.1200(a)(2)(iv) & (f)(5). Under the new regulations, this exemption would be eliminated, requiring most callers to obtain signed written consent from the recipients of these telemarketing calls, even ones who are established customers.
In light of these changes, businesses should revisit their TCPA compliance policies.
The post Are You Prepared for the New TCPA Rules? The Plaintiffs’ Bar Is. appeared first on Class Defense Blog.