United States: New TCPA Regulations Take Effect On October 16, 2013

The Telephone Consumer Protection Act of 1991 ("TCPA") 1 places certain restrictions on telemarketing calls, text messages, and faxes.  It has long been a favorite of the plaintiffs' bar because it provides for statutory damages of $500 to $1500 per violation,2 which in the aggregate can lead to substantial windfalls for plaintiffs.  TCPA violations (even innocent ones) can place companies at significant risk and TCPA litigation has skyrocketed as a result.3

Last year, the Federal Communications Commission ("FCC") added fuel to the fire by amending its TCPA rules and further restricting telemarketing calls.4  The most significant of those amendments – which narrow and eliminate key statutory exemptions – will take effect tomorrow, on October 16, 2013.

The Prior Express Consent Exemption

The first amendment concerns the "prior express consent" exemption for telemarketing calls placed to wireless phones using an automatic telephone dialing system ("ATDS") and for artificial or prerecorded voice messages delivered to wireless and residential landlines.  Specifically, the TCPA states:

It shall be unlawful ... (A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice ... (iii) to any telephone number assigned to a ... cellular telephone...

(B) to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver the message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the Commission under paragraph (2)(B).5

The TCPA defines "telemarketing call," or "telephone solicitation," as "the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person."6  It also defines "ATDS" as "equipment which has the capacity – (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers."7

Under the FCC's previous interpretation of "prior express consent," consent to such calls could be oral or written.  Indeed, under its prior interpretation of the statute, the FCC recognized that telemarketers could use an ATDS to call a wireless number which a customer had provided as his or her "primary" contact number without violating the TCPA.8

That will all change on October 16.  Under the FCC's amended regulations, telemarketers must obtain the prior express written consent of the called party for autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded calls to residential landlines.  Significantly, there is no "grandfathering" of consents that had been obtained under the FCC's prior rules.9  Instead, telemarketers must obtain new consent that:

  • Is in writing bearing the signature of the person providing consent (written consent includes an electronic or digital form of signature pursuant to the E-SIGN Act);
  • Specifies the telephone number to which the person is consenting to be called;
  • Clearly authorizes the company to call the person using an ATDS or prerecorded message for telemarketing purposes;
  • Is not a condition of purchasing goods or services.10

Clearly, there are practical and logistical difficulties in securing "written" consents, especially for companies with large customer bases with whom they do not communicate electronically.  Alternatively, companies can work around the new regulations by not using an "ATDS" or not making "telemarketing calls" altogether.  Those approaches are not without problems of their own, however.  For instance, the definition of ATDS has been the subject of much litigation, as the term "capacity ... to store or produce telephone numbers" is ambiguous,11 and the FCC has yet to weigh in to resolve the uncertainty.12  Even ceasing telemarketing calls may not be a silver bullet, as any messages that include an advertising component could be considered "telemarketing" calls and would be subject to the written consent requirements.13  Companies should therefore work closely with TCPA compliance counsel to ensure that their marketing efforts do not run afoul of this new restriction.

The Established Business Relationship Exemption

The second significant change to the FCC's regulations set to take effect on October 16 is the elimination of the established business relationship exemption for prerecorded telemarketing calls to residential landlines.  For twenty years, the FCC allowed, without the need for additional consent, prerecorded telemarketing calls to residential landlines when the caller had an "established business relationship" with the consumer.14  The FCC defined "established business relationship" as:

A prior or existing relationship formed by a voluntary two-way communication . . . on the basis of the subscriber's purchase or transaction with the entity within the eighteen (18) months preceding the date of the telephone call or on the basis of the subscriber's inquiry or application regarding products or services offered by the entity within the three months immediately preceding the date of the call, which relationship has not been previously terminated.15

With the elimination of this exemption, an established business relationship with a customer will no longer serve to exempt prerecorded telemarketing calls to residential landlines.  Accordingly, such calls will require prior express written consent as detailed above.

In short, any telemarketing calls placed to wireless customers using an ATDS or any prerecorded telemarketing messages delivered to wireless or residential landlines without obtaining prior express written consent of the customer will likely incur TCPA liability after October 16, 2013.  To avoid such liability, businesses should revisit their TCPA compliance policies and stay apprised of the latest legal developments in this area.

For continuing TCPA regulatory and litigation developments, please visit our new TCPA blog at www.tcpablog.com.


1. 47 U.S.C. § 227 et seq.iv.

2. 47 U.S.C. § 227(c)(5) ("A person or entity may ... bring ... an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater...  If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.").

3. See, e.g., James G. Snell and Carlos P. Mino, Telephone Consumer Protection Act Cases Are on the Rise, Class Action Litig. Report (Feb. 22, 2013).

4. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, FCC Report and Order, CG Docket No. 02-278 (Feb. 15, 2012) ("2012 Report and Order").

5. 47 U.S.C. § 227(b)(1)(A)(iii),(B)(emphasis added).

6. 47 U.S.C. § 227(a)(4).

7. 47 U.S.C. § 227(a)(1).

8. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 7 FCC Rcd 8752, 8769 ¶ 31 (Oct. 16, 1992) ("1992 TCPA Order") ("[P]ersons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.  Hence, telemarketers will not violate [the] rules by calling a number which was provided as one at which the called party wishes to be reached.").

9. See 2012 Report and Order 68 ("Once our written consent rules become effective, however, an entity will no longer be able to rely on non-written forms of express consent to make autodialed or prerecorded voice telemarketing calls, and thus could be liable for making such calls absent prior written consent.").  However, non-telemarketing calls are unaffected by the revised regulations.  See id. 28 ("[W]hile we revise our consent rules to require prior express written consent for autodialed or prerecorded telemarketing calls, we maintain the existing rules for non-telemarketing, informational calls.") (emphasis in original).

10. See id. 33, Appendix A, at 34.

11. Last spring, a federal court in Wisconsin took a broad view of the meaning of capacity and held that calls placed using a "preview" dialer were made with an ATDS because the dialer also had the capacity to dial in "predictive" mode.  See Nelson v. Santander Consumer USA, Inc., No. 11-cv-307-bbc, 2013 U.S. Dist. LEXIS 40799 (W.D. Wis. Mar. 8, 2013).  Subsequently, that decision was vacated by a joint stipulation of the parties and the case was dismissed with prejudice.  More recently, a federal court in Alabama took a much more narrow view of "capacity" and found that a dialing system must have the present capacity, at the time the calls were made, to operate as an autodialer for it to be an ATDS.  See Hunt v. 21st Mortgage Corp., No. 2:12-CV-2697-WMA, 2013 WL 5230061 (N.D. Ala. Sept. 17, 2013).

12. See GroupMe, Inc. Petition for Declaratory Ruling (Mar. 1, 2012) (asking the FCC to clarify the meaning of ATDS under the TCPA and to narrow the scope of the term "capacity" to encompass only equipment that "at the time of use" could employ the functionalities described in the TCPA without being altered); PACE Petition for Reconsideration (July 11, 2012) (arguing the FCC should narrow the meaning of "capacity" to focus on the capacity of the equipment at the time of the call.")

13. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Rcd 14014, 14098 ¶ 142 (July 3, 2003).

14. See 1992 TCPA Order, 7 FCC Rcd at 8770-71 34; later codified at 47 C.F.R. § 64.1200(a)(2)(iv).

15. 47 C.F.R. § 64.1200(f)(4).

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Seamus C. Duffy
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