United States: The TCPA – A Concise Guide for Telemarketers

Last Updated: July 31 2015
Practice Guide by Klein Moynihan Turco LLP

What is the Telephone Consumer Protection Act (“TCPA”)?

The TCPA1 was passed into law in 1991.  The Federal Communications Commission (the “FCC”) is empowered to issue rules and regulations implementing the TCPA.  Among other things, the TCPA allows individuals to file lawsuits and collect damages for receiving unsolicited telemarketing calls, faxes, pre-recorded calls or autodialed calls.

What is a Telemarketing Call?

“Telemarketing” calls include those made by advertisers2 that offer or market products/services to consumers.  Purely informational calls and calls for non-commercial purposes are exempt from the FCC’s regulations.

What is an Autodialed Call?

An autodialed call is a phone call, involving a live person or pre-recorded message, that is, placed using an “autodialer,” or automatic telephone dialing system (ATDS), with the capacity to call telephone numbers using a random or sequential number generator.3  Telemarketers should broadly construe the autodialed call definition in an effort to avoid unwanted litigation and regulatory action.  For instance, if you are utilizing any type of call center software as part of your telemarketing operations, you may be using an autodialer within the FCC’s definition.  If you are unsure, we recommend that you consult with an attorney who has expertise in telemarketing law.

What is a Robocall?

A robocall is a phone call that uses an “autodialer” system to deliver a pre-recorded telemarketing message.

Are SMS text messages to cell phones considered “calls” under the TCPA?

Yes.  The TCPA applies to both voice and short message service (SMS) text messages that are transmitted for marketing purposes.  The TCPA has been interpreted in recent years to prohibit the sending of unsolicited commercial text messages to cell phones, with limited exceptions (e.g., messages sent for emergency purposes).

What are the new TCPA Rules?

In 2013, the FCC adopted, among other things, the following additional protections for consumers concerning unwanted autodialed and pre-recorded calls:

New Rule

Requirement

Prior express written consent

Unambiguous written consent required before telemarketing call or text message.  Exception: calls that are manually dialed and do not contain a pre-recorded message are exempt from the TCPA.

No “established business relationship” exemption

Established business relationship no longer relieves advertisers of prior unambiguous written consent requirement.

1) Prior express written consent is required for all autodialed and/or pre-recorded calls/texts transmitted to cell phones and residential land lines for marketing purposes.4

Compliance with the E-SIGN Act satisfies this requirement, meaning that electronic or digital forms of signature are acceptable (e.g., agreements obtained via email, website form, text message, telephone keypress or voice recording).

Consumer consent must be unambiguous, meaning that the consumer must receive a “clear and conspicuous disclosure” that he/she will receive future calls that deliver autodialed and/or pre-recorded telemarketing messages on behalf of a specific advertiser; that his/her consent is not a condition of purchase; and he/she must designate a phone number at which to be reached (which should not be pre-populated by the advertiser in an online form).  Limited exceptions apply to this requirement, such as calls/texts from the consumer’s cellular carrier, debt collectors, schools, informational notices and healthcare-related calls.

Sample Website

Consent Language

     I hereby consent to receive autodialed and/or pre-recorded telemarketing calls from or on behalf of [ADVERTISER] at the telephone number provided above.5  I understand that consent is not a condition of purchase.

If a dispute concerning consent arises, the advertiser bears the burden of proof to demonstrate that a clear and conspicuous disclosure was provided and that the consumer unambiguously consented to receive telemarketing calls to the number he/she specifically provided.  It is a best practice for advertisers to maintain each consumer’s written consent for at least four (4) years, which is the federal statute of limitations to bring an action under the TCPA.  Evidence of Internet-provided written consent includes, but is not limited to, website pages that contain consumer consent language and fields, an associated screenshot of the consent webpage as seen by the consumer where the phone number was inputted and the complete data record submitted by the consumer (with time and date stamp), together with the applicable consumer IP address.

2) The “established business relationship” exemption for telemarketing autodialed and/or pre-recorded calls to residential landlines has been eliminated.

In the past, advertisers could rely on an established business relationship (such as a previous purchase) to circumvent the need to obtain a consumer’s written consent to receive telemarketing calls.  That exception to the consent requirement no longer exists.  Advertisers will have to obtain written consumer consent (outlined above), even if they previously had a business relationship with the consumer.

What are the penalties for failing to comply with the TCPA?

The TCPA provides for either actual damages or statutory damages ranging from $500 to $1,500 per unsolicited call/message.  In determining the final amount of statutory damages to award, courts analyze whether the defendant “willfully” or “knowingly” violated the TCPA.  Considering that text message marketing campaigns often involve thousands to, in some cases, millions, of text messages, potential damages under the TCPA may escalate especially quickly for SMS marketers.

Footnotes

1. 42 U.S.C. § 227.

2. For simplicity, the term “advertisers,” as contained herein, include both sellers and those telemarketing companies that market sellers’ goods/services.

3. 47 U.S.C. § 227(a)(1).

4. The amendments to 47 C.F.R. § 64.1200 leave open whether autodialed calls to residential landlines would be permissible under the statute, provided that a pre-recorded message is not used.  However, the statute commentary makes it clear that the FCC explicitly intended to prohibit all autodialed calls to residential landlines and cell phones.  It is a best practice to obtain written consent for all calls using an autodialer.

5. The checkbox and phone number should not be pre-populated, and the consumer’s phone number should appear on the same page as the consent.

This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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In 2012, the FCC revised its TCPA rules regarding the use of robocalls by telemarketers.
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