On July 10, 2015, the FCC entered its long awaited Order on 21 petitions seeking clarification on a number of issues related to the federal Telephone Consumer Protection Act (“TCPA”). A copy of the complete Order is available here https://www.fcc.gov/document/tcpa-omnibus-declaratory-ruling-and-order. The Order is consistent with comments that the FCC made during its open hearing on June 18, 2015. For businesses that place autodialed calls or calls that use an artificial or prerecorded voice, be it for telemarketing or other purposes, the key takeaways from the new Order are as follows:
First, the FCC confirmed a broad interpretation of the definition of an automatic telephone dialing system (“ATDS”) under the TCPA.
Petitioners had requested that the FCC adopt a more restrictive definition of what constitutes an ATDS, focusing on how dialing technology is actually used as opposed to the capacity of the technology. The FCC refused to grant this relief and instead ruled that dialing equipment constitutes an ATDS when it “has the capacity to store or produce, and dial random or sequential numbers (and thus meets the TCPA’s definition of ‘autodialer’) even if it is not presently used for that purpose, including when the caller is calling a set list of consumers.” According to the FCC, the statute’s “use of ‘capacity’ does not exempt equipment that lacks the ‘present ability’ to dial randomly or sequentially.” “In other words, the capacity of an autodialer is not limited to its current configuration but also includes its potential functionalities.”
The FCC did recognize the need for some limitations to the definition of an ATDS. According to the FCC, “the outer contours of the definition of ‘autodialer’ do not extend to every piece of malleable and modifiable dialing equipment that conceivably could be considered to have some capacity, however small, to store and dial telephone numbers – otherwise, a handset with the mere addition of a speed dial button would be an autodialer.” The FCC offered little additional guidance, however, on how far these reasonable limitations extend. Additional litigation over the ATDS definition is therefore likely.
Second, the FCC declared that consumers may revoke consent to receive autodialed/prerecorded calls “through any reasonable means.”
Prior express consent or (in the case of telemarketing calls) prior express written consent is generally a defense to claims under the TCPA. One question before the FCC was the extent to which businesses could specify processes consumers must follow to revoke consent. The FCC ruled that revocation must be allowed “through any reasonable means.” The FCC based this portion of its Order on its conclusion that “an interpretation that would lock consumers into receiving unlimited, unwanted texts and voice calls is counter to the consumer-protection purposes of the TCPA and to common-law notions of consent.”
Consistent with this conclusion, the FCC further expounded that “consumers may revoke consent in any manner that clearly expresses a desire not to receive further messages, and . . . callers may not infringe on that ability by designating an exclusive means to revoke.” Allowing callers to control the method of revocation would mean that a caller – “even one with actual knowledge that a consumer has revoked previously-given consent – would be free to robocall a consumer without facing TCPA liability, despite the consumer’s repeated reasonable attempts to revoke consent.” Accordingly, the FCC held that parties “generally may revoke, for example, by way of a consumer-initiated call, directly in response to a call initiated or made by a caller, or at an in-store bill payment location, among other possibilities.”
The FCC found “that in these situations, callers typically will not find it overly burdensome to implement mechanisms to record and effectuate a consumer’s request to revoke his or her consent.” “When assessing whether any particular means of revocation used by a consumer was reasonable,” the FCC indicated that it “will look to the totality of the facts and circumstances surrounding that specific situation, including, for example, whether the consumer had a reasonable expectation that he or she could effectively communicate his or her request for revocation to the caller in that circumstance, and whether the caller could have implemented mechanisms to effectuate a requested revocation without incurring undue burdens.” Many companies will need to revisit their procedures for revoking consent in light of this ruling.
Third, the FCC refused to “safe harbor” calls to reassigned numbers but afforded businesses “one free call” after reassignment.
Petitioners had requested creation of a safe harbor for calls placed to numbers they previously had the consent to call that had been reassigned to a new individual. The FCC declined to create such a broad exemption, instead allowing a single call exemption from TCPA liability after number reassignment occurs. The FCC explained that “callers who make calls without knowledge of reassignment and with a reasonable basis to believe that they have valid consent to make the call should be able to initiate one call after reassignment as an additional opportunity to gain actual or constructive knowledge of the reassignment and cease future calls to the new subscriber. “If this one additional call does not yield actual knowledge of reassignment,” the FCC deems “the caller to have constructive knowledge of such.” This is of course a difficult ruling for companies as the one allowed call will not necessarily result in actual notice of reassignment (for example, if the call rings unanswered or the party answering the call immediately hangs up).
The FCC also reaffirmed its position that “the TCPA requires the consent not of the intended recipient of a call, but of the current subscriber (or non-subscriber customary user of the phone) and that caller best practices can facilitate detection of reassignments before calls.” Again, “the ‘called party’ is the subscriber, i.e., the consumer assigned the telephone number dialed and billed for the call, or the non-subscriber customary user of a telephone number included in a family or business calling plan.” “[A]n ‘intended called party’ standard,” like that proposed by a number of petitioners, “does nothing to protect the new subscriber to a reassigned number.”
Fourth, the FCC established two new exemptions from the prior express consent requirements for specific pro-consumer messages.
The Order establishes a new “financial exemption” for calls concerning these four topics: (1) possible data breaches that threaten the security of the called party’s personal information; (2) steps consumers can take to prevent or remedy harm caused by data security breaches; (3) occurrences that suggest an increased risk of fraud or identity theft for the called party; and (4) actions needed to arrange for receipt of pending money transfers. But the FCC also identified a number of limitations to this exemption, including requirements about message content and a limitation on the number of calls/messages per day.
The FCC also exempted urgent messages that have a healthcare treatment purpose (such as appointment and exam confirmations and reminders, wellness checkups, hospital pre-registration instructions, pre-operative instructions, lab results, post-discharge follow-up intended to prevent readmission, prescription notifications, and home healthcare instructions but not Social Security disability eligibility) from the TCPA’s prior express consent requirement. As with the financial exemption, these healthcare calls/messages must satisfy a number of similar conditions.
Although the FCC has stated that its new Order “will benefit consumers and good-faith callers alike by clarifying whether conduct violates the TCPA and by detailing simple guidance intended to assist callers in avoiding violations and consequent litigation,” it appears from the outset that these newly confirmed interpretations will, in many circumstances, create more confusion than clarity. Businesses should continue to monitor and audit business practices that may implicate the TCPA, remaining constantly vigilant of the many pitfalls of this increasingly consumer-friendly statute.