The Federal Communications Commission (“FCC”) recently issued a declaratory ruling providing clarity on the scope of liability for fax advertisers under the Telephone Consumer Protection Act (“TCPA”).  The FCC’s TCPA fax ruling responds to broad concerns that advertisers unjustly assume the liability for fax broadcasters that exceed the parameters of the terms of their marketing agreements.  The new guidance clarifies that an advertiser is not a “sender” within the meaning of the statute where a fax is sent without the subject advertiser’s approval.

How did the FCC’s TCPA fax ruling clarify the scope of liability?

Generally, the TCPA prohibits the use of “any telephone facsimile machine, computer, or other device to send . . . an unsolicited advertisement” to a telephone facsimile machine.  Courts nationwide have inconsistently interpreted who is and who is not a “sender” for purposes of the statute.  The genesis for this divide harkens back to a 2006 ruling in which the FCC defined sender as “the person or entity on whose behalf the advertisement is sent” and that “[i]n most instances, this will be the entity whose product or service is advertised or promoted in the message.” Courts have struggled with the FCC’s “in most instances” qualification and, in far too many cases, have equated it with “in all cases.” As a result, advertisers have been held strictly liable for faxes which advertise their goods/services even if the fax broadcaster that they are working with violates a marketing agreement by, for example, falsely representing to the advertiser that it has consumer consent for the sending of certain faxes. 

Consequently, in the instant ruling, the FCC has sought to do away with the confusion.  Thus, the FCC has explained that “a fax broadcaster is solely liable for TCPA violations when it engages in deception or fraud against the advertiser (including when a fax broadcast violates its contract with the advertiser in a manner that is deceptive or fraudulent).”  The most important factor to the FCC in determining the applicability of the advertiser’s liability exemption is finding that the broadcaster’s conduct has effectively defeated any measure the advertiser has taken, or could have taken, to comply with the TCPA.  In such an instance, the FCC deems that the non-compliant fax cannot be considered to have been sent on the advertiser’s behalf.

Avoiding TCPA Fax Liability

In issuing this declaratory ruling, the FCC has injected a rare bit of welcome news into what is otherwise a challenging regulatory climate governing fax marketing.  Those operating in the space understand that TCPA fax rules are nuanced and technical and that the cost of non-compliance can be devastating.  While a positive development, the FCC guidance on TCPA fax liability demonstrates anew that the rules governing fax marketing are ever-changing.  Accordingly, businesses are advised to coordinate with knowledgeable counsel prior to engaging in any fax marketing campaign.