BFV Perspectives, Corporate Matters, | Aug 13, 2015

FCC Update: New Rules for Businesses that Contact Customers via Phone and Text Message

(Ruling issued July 10, 2015)

In July, the Federal Communications Commission (FCC) published its Telephone Consumer Protection Act (TCPA) Omnibus Declaratory Ruling. In effect, the new Ruling places heavy burdens on businesses that use electronic telephone systems to reach consumers via phone calls or text message.

The TCPA permits the FCC to regulate telephone solicitation and the use of automatic telephone dialing equipment (“Autodialers”), including phone calls and text messages to consumers. Among its provisions, the TCPA prohibits the use of Autodialers to call or text an individual without his or her prior express written consent. However, the TCPA’s broad and imprecise definition of an Autodialer, along with its silence on what constitutes prior express written consent, creates problems for businesses that face civil liability under the TCPA (up to $500 per call that violates the rules).

Business owners should beware. While the July ruling effectively clarifies the FCC’s interpretation of the TCPA, it now also favors consumers by placing substantial burdens on businesses that call or send text messages to consumers with electronic dialing equipment. For example, consider the following:

  1. Expanded Definition of Autodialer. The Ruling states that an Autodialer is any equipment that has the current or future capacity to dial random or sequential numbers. This definition includes any equipment that could potentially be used to randomly dial numbers, including computer-based VOIP telephone systems, smartphones with application support and computer-based text messaging software, regardless of the current configuration of those devices.
  1. Consumer’s Right to Revoke Consent. Under the Ruling, consumers have the right to revoke prior express consent to receive calls or texts from Autodialers “in any reasonable manner,” which the FCC interprets broadly. For example, this means that a consumer could revoke prior express written consent by simply walking into a local office of a business and inform a teller or sales clerk not to call them anymore.
  1. Liability for Calling Reassigned Numbers. The Ruling also states that callers will be liable for calls to cell phone numbers that were reassigned to new subscribers. In other words, if a consumer gives consent to be called, but their phone number is later transferred to another individual, then liability may attach for calls to that number even after it has been reassigned. To provide some safe harbor to callers who are unaware of the reassignment, the Ruling states that the first call to the reassigned number after reassignment will not trigger liability, but all calls thereafter will.
  1. Exceptions for Financial Institutions and Medical Providers. Fortunately, the FCC included exemptions from TCPA-liability for financial institutions and medical providers of certain time sensitive financial and medical information.
  1. No Distinction Between Informational and Marketing Calls. The FCC made it clear that the TCPA does not distinguish between informational and marketing calls. Instead, liability under the TCPA can attach for any call made from an Autodialer in violation of the TCPA.

Simply put, the FCC’s Ruling makes telephone-based consumer outreach a dangerous game for uninformed businesses. To ensure TCPA-compliance and to avoid liability, businesses that use phone-based consumer contact must ensure that they follow the TCPA’s rules. If you use any sort of electronic telephone systems to contact clients or consumers via phone calls or text message, it is imperative to review your practices for TCPA-compliance and seek guidance to clarify any questions about policies and implementing a consumer outreach program.

As always, let us know if we can help or if you have any questions.

BFV Perspectives, Corporate Matters, | Aug 13, 2015
Charles H. Van Horn
Charles H. Van Horn

Chuck Van Horn resolves business disputes. A shareholder at Berman Fink Van Horn, Chuck’s areas of concentration include business and commercial litigation.