On August 11, 2015, the Federal Communications Commission (FCC) fined Travel Club Marketing, Inc. and its owner $2.96 million dollars for alleged violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, et seq. The TCPA prohibits, amongst other things, the use of an automated telephone dialing system or pre-recorded voice to make telephone calls to a cellular telephone without prior express consent. The Florida based telemarketing firm is alleged to have made 185 such calls to more than 142 cellular telephone numbers, many of which were listed on the National Do Not Call Registry. The penalty represents the largest fine ever obtained by the FCC under the TCPA, amounting to over $16,000 per call.
The case is yet another illustration of the FCC’s renewed focus on the Telephone Consumer Protection Act, and is a cautionary tale for other businesses. Unfortunately, given the number of TCPA violations alleged by the FCC in a separate enforcement action pending against Dish Network, the ignominious record set by Travel Club Marketing, Inc. may be short lived.
The TCPA is also a lucrative vehicle for class actions or individual civil suits, since it provides for $500 dollars in statutory penalties, per call, and treble damages for willful violations. Just this month, CVS Pharmacy, Inc. was hit with a multimillion dollar class action lawsuit alleging it violated the TCPA through a vendor, West Corporation, by sending unsolicited calls and texts to class members cellular telephones. Such cases routinely require big money to resolve. For example, earlier this year polling company Gallup settled a TCPA class action for $12 million dollars. That case alleged Gallup used an automated telephone dialing systems when placing calls to conduct its polling work.
Given the expansive re-interpretation of the phrase “automatic telephone dialing system” in the FCC’s July 1, 2015 Declaratory Ruling and Final Order, it’s safe to say there is no relief in sight for businesses. In dissenting from the expansive order issued by the FCC, Commissioner Ajit Pai observed, “After this Order, each and every smartphone, tablet, VoIP phone, calling app, texting app–pretty much any phone that’s not a “rotary-dial phone”–will be an automatic telephone dialing system.”
Given the substantial risk posed by the TCPA, businesses should take a close look at their business practices as they relate to the various activities regulated by the TCPA. While an intricate knowledge of the TCPA was once thought to be the particular purview of compliance lawyers for the tele-marketing and debt collection industry, it is increasingly clear that no industry is immune and every company should make sure its practices are TPCA safe.