Telemarketing practices in the United States are governed by the Telephone Consumer Protection Act (TCPA)1, as well as by specific Federal Trade Commission (FTC) and Federal Communications Commission (FCC) regulations2. Moreover, the FCC is the primary regulator charged with the enforcement of the TCPA and, therefore, its decisions on how the act applies, and its prescription of rules which effectuate those decisions are extremely important for telemarketers to review.

In its 2012 TCPA Order (the TCPA Order), the FCC exercised its regulatory power. It signaled to the telemarketing community – using a variety of proposed rule changes – its intent to curtail certain telemarketing practices. The FCC proposed these rule changes because it determined that some of the rules in place at that time had become more of a nuisance for consumers than a benefit. One such significant change was the requirement that telemarketers have evidence of “prior express written consent,” as opposed to simply “prior express consent,” to initiate telemarketing calls to consumers. On October 16, 2013, when the new rules became effective, uncertainty amongst telemarketers reached a fever pitch: How would the new rule impact telemarketers’ existing databases? Would existing best practices still comply with the new rules? How could telemarketers best minimize the risk of telemarketing during the infancy of the revised rules?

Regrettably, there is very little available by way of federal guidance on how telemarketers can best comply with the new rules. As a result, a number of questions remain unresolved, as evidenced by the more than 15 pending petitions submitted to the FCC regarding the implications of the new rules on existing telemarketing practices. For instance, a petition filed by the Retail Industry Leaders Association (the RILA petition) seeks clarification as to whether the new rules are applicable to a one-time response to a consumer-initiated text message requesting text offers.

Upon further consideration, the RILA petition also raises another important question: is interactive (i.e., consumer-initiated) text message marketing an “E-SIGN process” that meets both the terms of the E-SIGN Act and the new TCPA prior express written consent requirement?

Guidance for Compliance

The FCC stated in the TCPA Order that telemarketers can obtain prior express written consent by obtaining an electronic signature that complies with the E-SIGN Act. While helpful, there is still a paucity of additional guidance. Amidst that paucity is the FCC Small Entity Compliance Guide (the SECG), which offers some direction for adherence to the new rules to obtain prior express written consent from consumers and echoes that businesses can rely on a compliant E-SIGN process. While the SECG – as the name would suggest - applies specifically to small entities, the guide closely tracks the language of the TCPA Order, which suggests that the guide is, at the very least, informative of what is generally important to the FCC in terms of obtaining prior express written consent by all entities, large and small.

The SECG states the following requirements for a consumer's written consent to be sufficient under the new rules:

  1. “clear and conspicuous disclosure” of the consequences of providing the requested consent (i.e., that the consumer is willing to receive future calls that deliver prerecorded messages by or on behalf of the telemarketer);
  2. unambiguous agreement to receive autodialed telemarketing calls at a telephone number designated by the consumer; and
  3. written agreement is obtained “without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service.”

Notably, the FCC does not require a specific form as evidence of prior express written consent for telemarketing calls and because the E-SIGN Act is technology-neutral, telemarketers can use a wide array of electronic signature processes to obtain consent.

Consumer-initiated Text: A Novel Approach to Obtaining Prior Express Written Consent in Connection With Standard Rate Short Code Programs.

A novel, unproven approach – in light of the new rules – is to incorporate the terms of the consent agreement into the text of the promotional advertisement that first invites the customer to sign up for text messages (the Promo Ad). Such ads are often used to provide a keyword to a consumer, along with a short code. Such an approach effectively bootstraps written consent into the marketing materials since a consumer would have to read the ad to obtain the short code and keyword or phrase (e.g. alert), before texting the keyword or phrase to the provided short code to initiate the program.

And given the close proximity between the short code and the terms of the agreement, there likely would be little room for an argument that a consumer was not aware that he or she was consenting to receive the telemarketing messages. Further, the act of sending the message would be an outward manifestation of the consumer’s desire to receive the telemarketing messages.

Here is some sample language to be included in the Promo Ad (including standard Mobile Marketing Association disclosures3):

Promo Ad: By texting “PROMO” to XXXXX (your Text) you authorize [Company Name] to send up to 2 texts/week (text alerts) to the number you provide using an autodialer. Consent is not a condition of purchase. Your Text is your electronic signature agreeing to these terms and to giving electronic written consent. Call 800-XXX-XXXX for a free paper copy of these terms. Reply HELP for help; Reply STOP to withdraw consent. Msg. and data rates may apply.

It is worth noting that there are at least two entities presently adopting a similar approach: “Department Store” and “Professional Sports Team.” Below are textual reproductions of their respective promotional ads:

Department Store: “TEXT ‘ALERT’ TO 12345 TO GET COUPONS, SALES ALERTS & MORE! Max 3 msgs/wk. Msg & data rates may apply. By texting ALERT from my mobile number, I agree to receive marketing text messages generated by an automated dialer from Department Store to this number. I understand that consent is not required to make a purchase. Text STOP to 12345 to cancel. Text HELP to 12345 for help. Terms & conditions at companyurl/mobilehelp Privacy policy at companyurl/policyprivacy”

Professional Sports Team: “TEXT-2-WIN PROMOTION ABBREVIATED TERMS AND CONDITIONS. You will receive auto-response confirmation text messages from the Professional Sports Team or the promotion sponsor. Standard message & data rates may apply. Text HELP to the short code provided during the promotion for help. Agreement to receive an SMS message is not a condition of purchasing any good or service.”

Both Department Store and Professional Sports Team share two noticeable differences in their advertisements from the Promo Ad language discussed above: (1) they have opted to include a link or secondary resource for consumers to obtain supplemental information pertaining to the complete terms & conditions, and (2) neither mention anything about consent to electronic delivery of terms.

Transferring the terms & conditions to a link or secondary resource certainly saves ad space (and possibly money); however, it likely increases the risk that a consumer might argue that he or she did not consent to the additional terms as they were not “clearly and conspicuously” disclosed, or that he or she was not able to view the terms before sending the text – akin to a “browse-wrap license” claim. See Specht v. Netscape Commnc’s Corp., 306 F.3d 17 (2d Cir. 2002).

Moreover, the failure to inform the consumer about consenting to electronic delivery as part of the E-SIGN process could invalidate the electronic signature the marketers are clearly trying to obtain.

Promo Language Meets the New Requirements?

Applying the requirements laid out in both the TCPA Order and the SECG, to be compliant a disclosure – as part of an advertisement requesting consumers text a word or short code – should include certain elements.

First, there must be a “clear and conspicuous disclosure” detailing the consequences of providing the requested consent. Indeed, the Promo Ad does just that. The ad clearly informs the consumer that the provision of a number to the short code will result in up to two promotional “text alerts” being sent to that number per week.

Second, there must be an unambiguous agreement to receive autodialed telemarketing calls at a designated telephone number. Again, the Promo Ad does this. It indicates that the text alerts will be sent using an automated telephone dialing system and unequivocally states that the consumer’s act of providing a number is a manifestation of both his or her signature, and consent to be bound to the terms of the ad.

Third, the written agreement cannot be a condition of purchase. And, without question, this requirement is met as the text explicitly states, “[c]onsent to these terms is not a condition of purchase.”

Assuming the above is met and all of the E-SIGN requirements for obtaining a valid electronic signature are met, it would seem that use of this novel method would be sufficient to obtain prior express written consent under the new rules, provided the E-SIGN Act is also complied with (i.e., record retention, electronic disclosure of terms, etc.).


At this point, it is unclear how the FCC might evaluate this approach. While the above analysis seemingly demonstrates that the language of the Promo Ad could meet the requirements of the TCPA and the E-SIGN Act, legitimate concerns remain which warrant an individual evaluation of each proposed Promo Ad. For example, consider what could happen if only the designated number is provided via the SMS message, and the consumer that originally signed up for the marketing text messages changes his or her phone number and the designated number now belongs to a different consumer. See United Healthcare Services, Inc. petition to FCC (seeking clarification as to the applicability of the TCPA and the FCC’s TCPA rules to informational, non-telemarketing autodialed or prerecorded calls to wireless numbers for which prior express consent was obtained but which, unbeknownst to the calling party, has been reassigned to another wireless subscriber).

Moreover, the E-SIGN Act requires entities to maintain accurate records of consumers from whom the entities have received written consent. So, would the provision of a phone number alone be sufficient, or would a follow-up text be necessary, which requested at least a first and last name? If a follow-up text message is necessary, would a telemarketer be in violation of the TCPA by sending the follow-up text since it technically did not obtain prior express written consent from the original consumer-initiated text? Unfortunately, we will have to wait and see, as this is precisely the issue that has been raised in the RILA petition.

As this approach is novel, telemarketers would be wise to consult with legal counsel before implementing this E-SIGN process to comply with the TCPA’s prior express written consent requirement.