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Advertising, Marketing & Promotions Alert >> Upcoming FCC Rulings Will Create New Challenges for TCPA Compliance

July 7, 2015

The Federal Communications Commission (FCC) recently announced that it will be issuing a package of rulings on 21 long-standing petitions concerning the Telephone Consumer Protection Act (TCPA) that addresses robocall blocking, autodialers, recycled phone numbers, and a number of other issues of interest to telemarketers and other businesses that contact consumers via telephone and/or text messages. Although the rulings are not yet available, in its announcement the FCC indicated that the rulings are aimed at further protecting consumers against unwanted robocalls and spam texts. The announcement signals bad news for businesses that were hoping that the FCC would finally narrow the far-reaching scope of the TCPA as it is currently drafted.

BACKGROUND
During 2014, the FCC received over 215,000 complaints relating to unwanted calls – the largest category of complaints made to the agency. The FCC also received 21 petitions and other requests from businesses and trade associations seeking clarity on how the FCC interprets the TCPA, which is the federal law that requires prior express consent for nonemergency autodialed, prerecorded, or artificial voice calls and text messages to wireless phone numbers, as well as for prerecorded telemarketing calls to residential wireline numbers. One of the concerns that the petitioners raised was that the TCPA’s current definition of an automatic dialer could be read to include almost any telephone given the advances in technology since the TCPA was first drafted.

At the open meeting, the FCC commissioners, by a narrow 3-2 vote, adopted a package of declaratory rulings that “affirmed consumers’ rights to control the calls they receive,” and that in turn denied many of the petitions sought by telemarketers and other businesses.

RULINGS
Certain of the rulings will affect both landline and wireless phones; others relate to only wireless phones.

Landline and wireless phones:

  • Service providers can offer robocall-blocking technologies to consumers and implement market-based solutions that consumers can use to stop unwanted robocalls;
  • Consumers have the right to revoke their consent to receive robocalls and robotexts in any reasonable way at any time;
  • If a phone number has been reassigned, companies must stop calling the number after one call;
    and
  • A consumer whose name is in the contacts list of an acquaintance’s phone does not consent to receive robocalls from third-party applications downloaded by the acquaintance.

Wireless phones and text messaging:

  • “Autodialer,” for purposes of the TCPA, is any technology with the capacity to dial random or sequential numbers, regardless whether this technology is actually used to make the call in issue;
  • The consent-based rules that apply to voice calls made to wireless numbers also apply to text messages;
  • Equipment used to send Internet-to-phone text messages is an autodialer, so the caller must have consumer consent before calling;
    and
  • Free calls or texts to alert consumers to possible fraud on their bank accounts or to remind them of important medication refills, among other financial alerts or healthcare messages, are allowed without prior consent, but other types of financial or healthcare calls, such as marketing or debt collection calls, are not allowed. Also, consumers have the right to opt out from these permitted calls and texts at any time.

The FCC made no changes to the Do-Not-Call Registry.

PRACTICAL CONCERNS
The courts have seen an explosion of TCPA cases, and these rulings will likely cause the number of TCPA lawsuits to continue to skyrocket. With respect to reassigned numbers, more than 37 million telephone numbers are reassigned each year, and with no authoritative database existing to track all disconnected or reassigned telephone numbers or to link all consumer names with their telephone numbers, more businesses may find themselves defending lawsuits for violating the TCPA. As a practical matter, the “one call” exception recognized by the FCC may be insufficient, and it is a draconian result for businesses that are trying in good faith to comply with the TCPA’s consent requirements.

Moreover, the FCC’s adoption of an expansive definition of what is an autodialer will also likely lead to the filing of more TCPA lawsuits. Its announcement indicates that the rulings will find that an “automatic telephone dialing system” includes smartphones, tablets, Voice over IP (VoIP) phones, calling apps, and texting apps.

Finally, it remains to be seen how the consent-revocation rule will work in practice. As Commissioner Ajit Pai questioned, however, will retail businesses have to “record and review every single conversation between customers and employees” and would a “harried cashier at McDonald’s have to be trained in the nuances of customer consent for TCPA purposes?”

Bottom Line

The exact details of the FCC’s decisions concerning the TCPA will become clearer once the final rulings are released. However, from the FCC’s announcement it is evident that the rulings will make TCPA compliance even harder for telemarketers and other businesses that are using autodialers and text messages to reach consumers. Unfortunately, it appears that the rulings could lead to an increase in TCPA lawsuits. It is thus even more important now than ever for telemarketers and other businesses affected by the TCPA and subject to the Do-Not-Call Registry to begin adapting their practices to the FCC’s new rules as soon as possible.