While not as popular as they used to be, faxes still provide telemarketers a worthwhile avenue to find potential customers. But using faxes to advertise is not a risk-free proposition. The Telephone Consumer Protection Act (“TCPA”) restricts the ability to send marketing faxes, in part, by requiring prior consent from the recipient. What happens if someone sends a fax without prior consent (i.e., unsolicited faxes)? The sender may be held liable for damages, unless it can show that it complies with the TCPA fax exception. The recent case of Bruce E. Katz, M.D., P.C. v. Dale Pharmacy & Surgical, Inc. helps illustrate the point.
How does the Katz decision demonstrate how a fax fits within the TCPA fax exception?
In the case at bar, Katz, P.C. has alleged that Dale Pharmacy sent an unsolicited fax advertising Dale Pharmacy products. In response, Dale Pharmacy moved to dismiss the Complaint arguing that the subject fax transmission fell within the TCPA fax exception. This exception applies when the sender can prove the following three elements:
- The sender has an established business relationship with the recipient;
- The sender obtained the fax number at issue from the recipient directly or from a public source (e.g., a directory or a company’s website); AND
- The sender included a detailed opt-out message on the first page of the fax. Please note that the opt-out must include a cost-free way to unsubscribe from future faxes, a clear and conspicuous statement that the recipient has the right to opt-out, and a telephone number or fax number through which the recipient can opt-out.
For a motion to dismiss, courts apply a plaintiff-friendly standard to evaluate whether a complaint states a valid claim. Here, the Court ultimately denied Dale Pharmacy’s motion because Katz, P.C. had provided enough detail in its Complaint to preliminarily demonstrate the lack of an established business relationship and a defective opt-out notice.
Why does the TCPA fax exception matter to your business?
On its face, this early ruling in the Katz proceeding may not seem important. Yet the Court’s decision now sends the parties into a discovery process that is likely to cost tens of thousands of dollars and hundreds of hours in lost productivity. While Dale Pharmacy may prevail in the end, it will be difficult and expensive to do so. By having robust fax marketing policies in place, your business can avoid such a fate.
Any business that engages in fax marketing could easily fall victim to a TCPA claim. To prevent this from occurring, fax marketers should obtain prior consent before sending faxes; that is the safest approach. If you plan on sending faxes to anyone who has not specifically provided consent, ensuring that your business meets the three TCPA fax exception factors is crucial to avoiding potentially crippling costs and regulatory liability.
Hire experienced telemarketing attorneys.
Do your fax policies meet the TCPA exception criteria? Is your business protected from exposure to a class action complaint for unsolicited faxes? Hiring experienced telemarketing attorneys takes the guesswork out of compliance.