The FCC’s rules implementing the Telephone Consumer Protection Act (TCPA) require companies to obtain prior express written consent before sending a text to a wireless number using an automated dialing system. But does prior express consent compliance attach to a person or phone number?
The FCC now has before it a Petition for Expedited Declaratory Ruling from a restaurant that used remote messaging alerts to notify employees of time-sensitive health and safety issues. One of the restaurant’s employees lost his phone and released the wireless phone number associated with that phone. The number was reassigned, but the alerts continued to be delivered to that number. Now the restaurant is facing a lawsuit for sending hundreds of unsolicited messages to that reassigned number.
On August 25, 2014, the FCC’s Consumer and Governmental Affairs Bureau (“Bureau”) sought comment on this petition. Specifically, the Commission seeks comment on:
- Whether callers who obtain prior express consent from a called party are liable under the TCPA for dissemination of informational, non-telemarketing alerts, to telephone numbers that have been reassigned without the caller’s knowledge
- Whether the Commission should add an affirmative, bad-faith defense where a defendant shows that the called party purposefully waited to notify the calling party of the reassignment in order to accrue statutory penalties, and
- Whether the TCPA applies to intra-company messaging systems, which are not aimed at consumers and never intended to reach the public.
Without a doubt, the TCPA and related statutes and regulations are one of the most complex and far-reaching laws affecting modern businesses. Like this petitioner, many businesses have turned to the FCC with petitions seeking what they see as a more reasonable balance between technology and consumer privacy. Indeed, the FCC is currently sitting on just shy of 40 distinct petitions filed by businesses seeking clarifications and carve-outs of the FCC’s TCPA regulations.
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TCPA COMPLIANCE MONITORING REPORT
As one of the most popular pieces of legislation ever enacted, the TCPA places significant restrictions on the ability of marketing companies to place telephone calls and send commercial faxes to market to current and potential customers. For example, a telemarketing call cannot be made to any residential or wireless phone number that is listed in the national Do-Not-Call registry, unless there is a qualifying established business relationship, and that can be revoked by the consumer. There are many other restrictions on telemarketing calls, which are also regulated by the Federal Trade Commission if the call is interstate or international in nature. States can enforce federal law, as well as apply their own rules to intrastate calls. Moreover, courts have applied state laws to interstate calls.
The TCPA also places stringent restrictions on the ability of anyone, including marketing companies and debt collectors, to use automatic dialing systems to reach, or to send artificial voice or prerecorded messages to cell phones, absent prior written consent. Also, absent prior written consent, a caller cannot deliver prerecorded messages to residential landline numbers. Text messages are considered to be the equivalent of voice calls and, as such, are strictly regulated as well. In addition to potential civil penalties, the TCPA contains a private right of action, which allows individuals to sue for violations of the TCPA if permitted by state law. Recently, this risk, in the form of class action lawsuits, has proven significant because that statute allows plaintiffs to recover $500 in statutory damages for each violation of the TCPA ($500 x the number of consumers who received the unsolicited message). If the plaintiff can prove the violations were knowing or willful, the statutory damages are trebled for each call.
While Congress intended the TCPA to be a simple consumer remedy accessible through state small claims courts, aggressive plaintiffs’ lawyers and 20 plus years of litigation has turned it into one of the most significant forms of federal class actions against perceived deep pocket businesses.
As technology, markets and business practices have changed, the strict standards of the TCPA have presented barriers for many businesses, especially those trying to collect overdue bills or loans and/or trying to reach consumers that only use cell phones. For example, absent prior written consent, a bank cannot contact a customer’s cell phone to inquire about a missing payment unless it dials the number manually. Similarly, it cannot send an unsolicited text message with a payment reminder.
These many factors have created a “perfect storm,” as businesses using modern technology to keep costs under control trying to reach consumers, many of whom have only wireless phones, are facing expensive class action litigation and are paying large settlements. Meanwhile, the presence of unwanted robocalls to consumers makes it virtually impossible from a political perspective to loosen the TCPA and related laws.
If you have any questions or concerns regarding this Advisory or if you require advice related to TCPA compliance, please do not hesitate to contact Jane Wagner at jlw@commlawgroup.com / 703-714-1321 or Linda McReynolds at lgm@commlawgroup.com / 703-714-1318.
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