The Telephone Consumer Protection Act ("TCPA") is a federal statute that comes into play for routine business calls to consumers. It governs under what circumstances businesses can use a system to automatically dial phone numbers or deliver a prerecorded message to residential landlines, or call or text cell phones. Congress enacted the TCPA in 1991 to address the problem of telemarketing calls to consumers at home, especially during dinnertime. The law places even more limitations on calls to cell phones, because consumers used to pay for cell phone service by the minute. Although motivated by telemarketing calls, the TCPA applies to even nonmarketing calls, with only narrow exceptions for purely informational calls.
In July, the Federal Communications Commission ("FCC") issued a Declaratory Ruling and Order that generally makes it more difficult for businesses to comply with the TCPA, and will likely result in an uptick of consumer lawsuits. Below are key points from the Order, which is in effect immediately (although the FCC provided a grace period until October 6, 2015, for businesses to comply with the new prior express written consent provisions). Accordingly, businesses should review and revise their policies to comply with the Order. Also, in anticipation of lawsuits, businesses should consider whether to purchase policy endorsements to provide insurance coverage for TCPA claims. As discussed below, some business interests have filed challenges in the D.C. Circuit Court of Appeals, seeking to void the Order based on the FCC having overstepped its authority. If the court voids some or all of the Order, then businesses may change their policies back.
- The FCC expanded the definition of an Automatic Telephone Dialing System (“ATDS”). The TCPA bans calls and texts to cell phones absent prior express consent when the caller uses an ATDS. The Order reiterated that ATDS means a device that has the capacity to store or produce, and to dial phone numbers using a random or sequential number generator. But what modern-day calling system does not have such a capacity? The only example the FCC gave was a rotary phone. The takeaway is your business likely uses an ATDS to call consumers, and so obtaining express consent is essential.
- Consumers can revoke consent-to-call in any reasonable manner, at any time. The revocation just has to be made in a "reasonable manner," a very vague standard. As a result, businesses need a prompt, company-wide system to note when a consumer revokes consent.
- Businesses only get one pass for calling a number that has been reassigned to a different phone. If the called person says the number is reassigned or even if the person does not answer the phone, then all subsequent calls to that number violate the TCPA. As with the revocation rule, this new rule requires prompt company-wide action taking a phone number off the system. Businesses may require customers to tell them when they get a new phone number, and so could have a third-party claim against the customer if the person with the reassigned phone number files a TCPA claim.
- Marketing calls now require prior express written consent for eachcall or text to a cell phone. Obtaining prior express written consent to be called for a series of calls for a marketing campaign is insufficient. The business has to get new consent for each call.
- The FCC clarified exemptions for bank fraud and urgent healthcare calls and texts. Calls about data security breaches, account fraud, doctor’s appointment reminders, lab results, prescription availability, and the like are okay so long as they comply with certain restrictions, including no marketing or debt collection information; generally no longer than a minute; allow an easy opt-out; and no more than three calls/texts per event over three days.
The Association of Credit and Collection Professionals ("ACA International"), the Professional Association for Customer Engagement, Sirius XM Radio, Inc., and CodeBroker, LLC, filed petitions challenging the FCC’s order, asserting:
- The new definition of an ATDS is so broad and vague that it does not give "fair notice of what is prohibited," and authorizes or encourages discriminatory enforcement.
- The one-call safe harbor for reassigned numbers creates a "perverse incentive" for customers to conceal the reassignment and then file a lawsuit for multiple TCPA violations. The "called party" should instead mean the person the business intended to call.
- The revocation rule is "not commercially viable" and the FCC rejected more reasonable options that still would protect consumers.
- The new rule on written consent for each call is contrary to the statute.
If the court agrees with the petitioners, it could void some or all of the Order.