A well-meaning Act of Congress designed to protect consumers, through nuisance damages, has become a nuclear bomb that can put entire businesses at jeopardy. That statute, known as the Telephone Consumer Protection Act (TCPA), has cost large businesses tens of millions and put smaller businesses into bankruptcy or simply out of business. When Congress enacted the TCPA it provided a private cause of action for individuals who receive unauthorized text messages and robocalls (which includes more types of calls than you might think). The TCPA was in response to an increasing number of consumer complaints about these types of calls, faxes, and texts. According to the legislative history, the intent of the $500 to $1500 per text/call remedy was to allow consumers a facile opportunity to seek redress in a local small claims court. (See Remarks of Sen. Hollings, 137 Cong. Rec. 30821-30822 (1991)).
Instead of a single plaintiff in small claims, however, enter Fed. R. Civ. P. 23 and the Class Action Fairness Act, and one lawsuit can produce the potential for millions of dollars in damages. One simple marketing campaign of 40,000 texts – a modest campaign at that – done with even the slightest imperfection, produces $20 million to $60 million in potential class action damages. Well-heeled companies like Life Time Fitness, Bank of America, and Capital One have settled such suits for $15,000,000, $32,000,000 and $73,000,000 respectively. But, the small-to-midsize company could be forced out of business for even an innocent violation of the TCPA.
So what does your company, or your client’s company, need to do to ensure compliance? Unfortunately, that answer is fluid. The administration and enforcement of the TCPA it primarily controlled by the FCC. The FCC continues to issue “clarifications”, often in the form of “orders”, after amendments of the TCPA and also in response to petitions filed by victims of TCPA liability seeking clarity on different TCPA requirements. (See FCC Order 15-72, issued on July 10, 2015). These clarifications, read in conjunction with the TCPA, may differ based on the subject matter of the call, whether a telephone number has been reassigned, or whether the consumer has revoked consent, just to name a few. At the very minimum, before embarking on a text-marketing campaign, for example, a company must follow these basic steps: 1) obtain appropriate prior express written consent, 2) allow the consumer to opt out and revoke consent, and 3) make sure that your text message is being sent to the intended recipient.
Marketing services and coupons through text message can be an inexpensive and effective way to reach thousands of potential customers instantly. But, with law firms now resorting to apps such as “STOP TEXTS GET CASH” and “BLOCK CALLS GET CASH”, and professional plaintiffs buying multiple cell phones and using software to screen calls, the risk of being faced suddenly with potentially crippling class action lawsuits is omnipresent.
So what can your company, or client’s company, do when it suddenly finds itself as a defendant in a putative TCPA class action? Do not contact the company used for the campaign to distribute the texts. These are often common carriers who may have a defense and the company could risk creating an adverse evidentiary trail when overreacting. Instead, immediately contact an attorney experienced in handling TCPA defense cases as the nuances and changes in the TCPA and FCC Orders can be difficult to navigate. And, immediately begin to preserve all evidence. An ounce of prevention also could be worth many pounds of cure. Better yet, be proactive and before engaging in any text or fax marketing campaign, consult with a lawyer experienced in TCPA actions to develop plans to comply fully with the TCPA requirements.