All fax messages must contain opt-out information – even those messages that recipients agreed to receive, according to an order from the Federal Communications Commission which confirms the agency’s interpretation of the Telephone Consumer Protection Act
In recognition of the confusion about the issue, however, the FCC granted retroactive waivers for companies that petitioned the Commission for guidance and provided a six-month window for them to comply with the opt-out requirement.
The controversy dates back to 2006, when the FCC adopted an order promulgating rules and regulations for the 2005 Junk Fax Prevention Act. As part of that Order, the Commission adopted a rule that required that a fax advertisement “sent to a recipient that has provided prior express invitation or permission to the sender must include an opt-out notice.”
But a footnote in the Order also stated that “the opt-out notice requirement only applies to communications that constitute unsolicited advertisements.”
Anda, Inc. filed a request for a declaratory ruling in 2010 arguing that the FCC lacked the authority to adopt the rule for fax ads sent with prior express consent because Section 227(b) of the Communications Act only authorized the Commission to adopt restrictions with respect to unsolicited fax ads.
The FCC dismissed the petition in 2012 and Anda appealed. The Commission joined Anda’s appeal with dozens of other similar petitions that had been filed.
Not only did the FCC find Anda’s petition challenging the Commission’s authority untimely, it failed to sway a majority. “The Commission clearly relied upon its section 227 authority in promulgating the opt-out notification requirement,” Secretary Marlene H. Dortch wrote. Because Congress did not define the phrase “prior express invitation or permission,” it fell to the FCC to interpret the scope of such prior express permission.
Necessary to that determination was a means to revoke prior express permission and the “record here confirms that, absent a requirement to include an opt-out notice on fax ads sent with prior express permission, recipients could be confronted with a practical inability to make senders aware that their consent is revoked,” the FCC said.
“At best, this could require such consumers to take, potentially, considerable time and effort to determine how to properly opt out, which would place the burden on the consumer to find an effective means to revoke such consent, assuming that such a means even exists,” according to the Order. “At worst, it would effectively lock in their consent at a point where they no longer wish to receive such faxes. The opt-out notice requirement ensures that the recipient has the necessary contact information to opt out of future fax ads and can do so in a timely, efficient and cost-free manner.”
The requirement is also “good policy,” the FCC added, providing consumers with a means to change their minds.
However, the Commission also found good cause to grant a retroactive waiver to the petitioners because of the footnote language and its failure to provide adequate notice that it intended to adopt the requirement that opt-out notices be included in solicited ads. The FCC noted that parties could be subject to potentially substantial damages for failing to comply with the rule, and allowed a six-month period for the businesses to achieve compliance.
Other similarly situated parties may also seek waivers under the Order, the agency said, if they file a petition within six months.
Two Commissioners filed partial concurrences and dissents to the Order. Commissioner Ajit Pai agreed with the relief provided to the petitioners, but wrote that to “the extent that our rules require solicited fax advertisements to contain a detailed opt-out notice, our regulations are unlawful.”
The FCC’s Order was an attempt to “retroactively justify our rules as comporting with the TCPA,” Commissioner Pai said, and the statute itself unambiguously mandates opt-out notices only for unsolicited advertisements.
Commissioner Michael O’Reilly’s statement adopted a similar position but went even further, agreeing with the petitioners that the FCC lacked the authority to adopt the rule. “The order notes that an agency is entitled to fill gaps in a statute,” he wrote. “But it is not entitled to invent gaps in order to fill them with the agency’s own policy goals, no matter how well intentioned.”
To read the FCC’s order, click here.
Why it matters: While the FCC upheld its requirement that even fax advertisements sent with prior express consent must include the TCPA’s statutory opt-out notice – and reiterated its authority to do so – the Commission did grant a retroactive waiver for companies that petitioned the agency about the issue. In addition, businesses seeking a similar reprieve have until April 30, 2015 to file a waiver request. After that date, all senders must include a clear and conspicuous statement on the first page of the ad stating that the recipient may make a request not to send any future ads and that failure to comply within 30 days with an opt-out request is unlawful. Senders must also provide a domestic phone number and fax number to allow the recipient to transmit the opt-out request.