On July 26, 2017, the Federal Communications Commission (“FCC”) released a forfeiture order against telemarketing platform provider Dialing Services, LLC (“DS”). The forfeiture order imposes a $2,880,000.00 penalty for violations of the Telephone Consumer Protection Act (“TCPA”). The FCC has been investigating DS’s business model and practices dating back to 2012 and, in 2014, issued a Notice of Apparent Liability against DS. The FCC has now concluded that DS knowingly and willfully violated the TCPA despite its claims that it is simply a passive platform provider and not a telemarketer.
Why did the FCC Determine that a Dialing Platform Provider is Liable for TCPA Violations?
The FCC began its opinion by rejecting DS’s claim that web- hosted dialing companies cannot be liable for TCPA violations. The FCC clarified that the question at issue is not the means of communication, but instead who physically placed the calls, and who was “so involved in the placing of a specific telephone call as to be directly liable for making it.” In this instance, the FCC found that DS was liable for placing over 2 million robocalls in violation of the TCPA. The FCC based its decision on two grounds: 1) DS offered spoofing functionality to its clients, so that call recipients did not receive accurate caller-ID information on who was placing the calls; and 2) the FCC found that DS assisted clients in structuring their automated telemarketing messages.
The FCC also rejected DS’s argument that it had no obligation to obtain prior express written consent from consumers and that, instead, this obligation alone rested with its customers. The FCC stated:
[DS] could have required its clients . . . to provide proof of their respective consents and furnished it to the [FCC] as evidence. It did not do so. [DS] requires its clients to sign a terms of service agreement promising that the clients will comply with federal regulations governing prerecorded messages. But that falls short of demonstrating that the called parties expressly consented to the communications . . . . Nothing in the statute or our rules suggests that the consent requirement may be overcome by a general statement from third parties that they will not violate the law. We reject the idea that the Company may satisfy its independent obligation under the TCPA by relying on a broad promise by a third party that it will not violate the TCPA.
Protect Yourself against a TCPA Lawsuit: Consult with a TCPA Attorney Today
On July 10, 2015, the FCC issued a ruling exempting certain app platform providers from TCPA liability under limited circumstances. Unfortunately, many platform providers misread this FCC ruling as a broad, all-encompassing exemption – it was not. Against this backdrop, platform providers are forewarned to consult with an experienced TCPA attorney to help them navigate the rapidly-evolving telemarketing regulatory arena.