Telemarketing will suffer a bit of a blow when changes to the Telephone Consumer Protection Act (TCPA) of 1991 are put into effect on October 16 of this year.
Enforced by the Federal Communications Commission (FCC), TCPA was originally enacted to address the issues of consumer privacy, and prerecorded telemarketing calls to residences and cell phones, especially when the cost was shifted to consumers/recipients.
“This is the most significant change to the consent laws in the recent years,” said CompliancePoint VP Ken Sponslert at a webinar hosted by Manatt, Phelps & Phillips to help inform companies about the impending changes. CompliancePoint offers consulting, audit, and training services that help business comply with state, federal, and international laws.
Companies using automatic telephone dialing systems (ATDS) are now required to obtain express written consent from customers before soliciting them on their mobile devices. The changes apply equally to text messages, however, the regulations for automated calls or calls containing prerecorded messages only apply to cell phones. Similar calls made to landlines don’t fall under the TCPA. Calls from nonprofit organizations aren’t considered solicitation, and are therefore exempt under the TCPA.
“Written consent” under TCPA requires companies to state disclosures clearly and conspicuously, and invite the customers to grant their express consent with a specific action, such as ticking a box. Under the E-SIGN rule, companies are allowed to gain consent online. Customers must grant consent prior to receiving any communications from companies, though they can revoke their consent at any time—and companies need to comply.
Sponsler noted that companies can still manually dial cell phone numbers without worrying about the new regulations, however, companies that have a “capacity” to autodial need to acquire consent. A company that possesses autodialing capabilities is obliged to request customers’ consent—failing to do so sets the stage for potential litigation.
Becca Wahlquist, a partner at Manatt, Phelps & Phillips, highlighted the upward trend in TCPA-related litigation, and a growing community of legal professionals specializing in TCPA law. Wahlquist linked the rise in TCPA suits to “astronomical statutory damages.” As of now, no caps exist on the damages. The U.S. Chamber of Commerce is currently contemplating a push to introduce such a cap, but declined to provide further comment.
Wahlquist advised companies to keep proof of consent for as long as the company intends to contact the customer using ATDS or prerecorded messages. In addition, she noted that companies must be careful with content, as calls or texts that combine informational and telemarketing elements are considered to be telemarketing under the TCPA. Some lawsuits have even alleged that a text updating a customer on the status of his or her order that contains a link to a webpage with other offers is telemarketing for the purposes of TCPA. Moreover, Wahlquist explained that if a customer’s number is changed or reassigned, and a company uses ATDS or prerecorded messages to then erroneously contact a noncustomer, some courts have found liability since the company contacted the new owner of the number without his or her express consent. Finally, companies that use ATDS or prerecorded messages to communicate with their customers and obtain customer information through a lead gen company or a list provider will need to ensure that they have express written consent from their customers that meets the new standards as of October 16, 2013.
