United States: TCPA Requirements FAQ

The federal Telephone Consumer Protection Act (TCPA; 47 U.S.C. § 227) and its implementing regulations (47 C.F.R. § 64.1200) regulate the use of automatic telephone dialing systems (ATDS) and artificial or prerecorded voices ("prerecorded messages") in telephone communications. Generally speaking, the TCPA prohibits using an ATDS or prerecorded message to contact cell phones, and prerecorded telemarketing messages to contact residential phones, unless the recipient has provided and not revoked "consent" to receive the call/text.

This FAQ provides an overview of the TCPA's requirements. Because every type of calling campaign raises different concerns and the TCPA is significantly more complicated than can be presented here, M&S recommends that businesses consult with an experienced TCPA attorney before conducting any type of calling campaign.

What is an ATDS?

An ATDS is "equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers." The FCC has held that a predictive dialer also constitutes an ATDS. When determining whether a system is an ATDS, the FCC and courts often focus on whether it has "the capacity to dial numbers without human intervention." For example, if a representative must click to dial each number, then the system may not be an ATDS because human intervention is required for dialing each number.

In 2015, the FCC held that "the capacity of an autodialer is not limited to its current configuration but also includes its potential functionalities." If autodialing features can be activated or deactivated within the system, or if autodialing features can be added through software changes or updates, the FCC considered such features as part of the system's capacity and, therefore, relevant when determining whether the system is an ATDS. On March 16, 2018, the U.S. Court of Appeals for the D.C. Circuit vacated the FCC's potential functionalities test. The Court noted several conflicting views the FCC has taken, and had specific concerns that the overbreadth of the Agency's interpretation could result in the common smartphone being considered an ATDS. Since the D.C. Circuit's decision, courts have generally only considered current capacities, including capacities that can be easily activated, akin to "flipping a switch."

The FCC clarified in June 2020 that a peer-to-peer texting platform, where each message is initiated by a person, is not an ATDS. The logic of its clarification, that a platform that "is not capable of dialing such numbers without a person actively and affirmatively manually dialing each one" is not an ATDS, would apply to similar voice click-to-dial systems as well. Although not binding on courts, the FCC's position is very persuasive and aligns with court precedents.

What Is the Definition of an ATDS after the Facebook v. Duguid Ruling?

On April 1, 2021, the Supreme Court issued its highly anticipated ATDS ruling in Facebook, Inc., v. Noah Duguid, et al. The Supreme Court unanimously held that "To qualify as an automatic telephone dialing system under the Telephone Consumer Protection Act, a device must have the capacity either to store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator."

Facebook successfully argued for this narrow definition of an ATDS, that a dialing system must use a random or sequential number generator to store or produce numbers. Duguid's broader ATDS definition, that an ATDS must only be capable of producing numbers from a stored list, was rejected by the Court. Had the Court followed Duguid's interpretation, nearly any modern dialing equipment would have been within the definition of the ATDS interpretation.

Though it resolved the circuit split over the definition of an ATDS, the Court's ruling did not tie up all loose ends. Plaintiffs are using ambiguous language in footnote 7 of Facebook and potential flexibility under the term "capacity" to keep many TCPA cases alive. While courts resolve these loose ends, companies using dialer technology should consult with counsel to understand risk mitigation strategies for dialing under this new framework.

What Consent is Required for Telemarketing Calls?

Telemarketing or advertising calls made using an ATDS or prerecorded voice (which includes a synthesized voice) to cell phones, or by prerecorded voice to residential lines, require prior express written consent (PEWC). Both the FCC and courts have made it clear that these terms are to be construed broadly and that a sale need not occur during the telephone call for it to be a telemarketing call or a call that introduces an advertisement. Likewise, dual-purpose calls (i.e., calls made for both non-solicitation and solicitation purposes) are considered telemarketing calls under the TCPA. If a call is motivated in part by the desire to achieve a future sale, the call is likely to be deemed a telemarketing call regardless of whether the sale takes place during the initial call, a future call, or a subsequent in-person meeting/transaction.

PEWC means an agreement, in writing, bearing the signature of the person called that clearly and conspicuously discloses that the person authorizes the seller to deliver or cause to be delivered telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice to a specified telephone number. Furthermore, the person must be informed they are not required to sign the agreement, or agree to enter into such an agreement, as a condition of purchasing any property, goods, or services.

Although the agreement must be in writing and include the call recipient's signature, it does not need to be in a particular form or format because the FCC recognized, pursuant to the E-SIGN Act, consent obtained via an "email, Web site form, text message, telephone keypress, or voice recording" is sufficient so long as the other requirements (e.g., mandatory disclosures, identification of the phone number, clear authorization by the person providing consent) are met.

What Consent is Required for Non-Telemarketing Calls?

Non-telemarketing calls/texts to cell phones made using an ATDS or prerecorded voice require prior express consent (PEC). The term "prior express consent" is not defined under the TCPA or FCC regulations. However, in 1992, the FCC addressed the issue of PEC in the context of calling wireless numbers by stating:

The FCC's broad language in discussing the express consent consumers provide by releasing their telephone numbers is important. The FCC could have limited the scope of the express consent to the specific purpose(s) for which the consumer provided his/her number (e.g., to be contacted when an item is ready to be picked up); however, the only limits placed on this method of obtaining PEC were:

1) the call recipient must have provided the number to the business directly or via an intermediary (i.e., capturing it via caller ID or from a third party is not sufficient);

2) there is no express consent if the call recipient provided "instructions to the contrary" (i.e., indicated that he/she doesn't want to be contacted at that number);

3) the call must be for "normal business communications;" and

4) the call must be closely related to the purpose for which consent was given.

As recently as 2015, the FCC reiterated its PEC standard.

What are Special Considerations for Prerecorded Messages?

The TCPA requires that a caller have PEWC before calling a consumer's wireless or landline number using a PRM for telemarketing purposes. All telemarketing prerecorded messages must include multiple identity and purpose disclosures, provide a phone number for Do Not Call requests and an automated interactive voice or key-press operated opt-out mechanism. Lastly, while the TCPA may not heavily regulate non-telemarketing prerecorded messages beyond ATDS requirements, several states restrict the use of prerecorded messages and automatic dialing and announcing devices.

What About Ringless Voicemail?

At least one court has held that systems that deposit a prerecorded voicemail into a consumer's voicemail box without ringing the consumer's handset are making calls subject to the TCPA's consent requirements.

What are Special Considerations for Prerecorded Messages?

The TCPA requires that a caller have PEWC before calling a consumer's wireless or landline number using a prerecorded voice for telemarketing purposes. All telemarketing prerecorded messages must include multiple identity and purpose disclosures, provide a phone number for Do Not Call requests, and an automated interactive voice or key-press operated opt-out mechanism. Lastly, while the TCPA may not heavily regulate non-telemarketing prerecorded messages beyond ATDS requirements, several states restrict the use of prerecorded messages and automatic dialing and announcing devices.

Who Must Comply with Do Not Call Laws?

In 2003, the Federal Trade Commission and FCC jointly issued rules that together created the National Do Not Call Registry (DNC Registry). Callers are generally prohibited from calling consumer numbers listed on the DNC Registry for telemarketing purposes. Telemarketers must download and scrub against the DNC Registry at least every 31 days unless an exemption applies. The two exemptions are when the caller has (a) written consent from the consumer, or (b) an Established Business Relationship (EBR) with the consumer. The term EBR includes business relationships where the consumer engaged in a transaction with the seller within the previous 18 months ("Transactional EBR") or inquired about the seller's goods/services within the previous 3 months ("Inquiry EBR"). Federal DNC laws do not apply to business-to-business calls (except the sale of nondurable office or cleaning supplies). Individual states may have more restrictive requirements.

Businesses that conduct telemarketing must also maintain an internal company-specific DNC list. In fact, no business may initiate any telemarketing call without having "instituted procedures for maintaining a list of persons who request not to receive telemarketing calls made by or on behalf of that [business]." Those procedures must include, at a minimum, a written DNC policy that complies with legal requirements and training of personnel in the use of the DNC list. Although the DNC regulations only require that company-specific DNC requests be honored for 5 years, many companies choose to honor the requests indefinitely for customer service purposes. Calls to consumers that previously made a company-specific DNC request are prohibited even if the seller has an EBR with the consumer or the consumer provided written consent for such calls prior to making a DNC request.

What are the Penalties for Noncompliance?

The FCC can seek up to $16,000 per violation ($26,000 per intentional violation), but the greater practical risk of noncompliance comes from private plaintiff class actions. The TCPA permits private individuals who received calls/texts in violation to seek up to $500 per communication ($1,500 for willful or knowing violations) in statutory damages. A cottage industry of professional plaintiffs and class action attorneys has developed in response to the potential for statutory damages. In the past several years, the number of TCPA cases filed in federal courts has increased dramatically and judgments have reached over $925 million.

Is STIR/SHAKEN Part of the TCPA?

STIR/SHAKEN is a set of technical standards to facilitate call authentication. At a high level, STIR/SHAKEN allows an originating carrier to cryptographically sign a call with a rating that demonstrates the carrier's confidence that the person making the call has the right to use the caller ID associated with the call. The terminating carrier can then decrypt the signature and determine how the call should be dispositioned based upon the rating. Call authentication is not part of the TCPA, but has been mandated by the TRACED Act and FCC regulations. Over time, STIR/SHAKEN should help call recipients have more confidence that the caller is calling on behalf of the person or entity shown on their caller ID. For more information on STIR/SHAKEN, please view our webinar and blogs on the topic.

What is Florida's Do Not Call Act and How Is It Related to the TCPA?

On July 1, 2021, Florida's amended Do Not Call statute went into effect. The new law requires the called party's prior express written consent before any person may make a telephonic solicitation call using an automated system for the selection or dialing of telephone numbers, or the playing of a recorded message when a connection is completed to a number called. This definition is much broader than the TCPA's ATDS definition and may pose challenges for businesses using equipment that is not considered an ATDS under the TCPA.

As with the TCPA, the amended Do Not Call law provides a private right of action for actual damages or $500 penalty per violation (trebled to $1,500 if willful), whichever is greater, plus attorneys' fees and costs.

I Want to Initiate a Calling Campaign. What Should I Do?

Before conducting a calling or texting campaign, seek the advice of skilled TCPA counsel. The TCPA and other state and federal teleservices regulations form a complicated structure that requires specific knowledge and business acumen to successfully navigate.

Updated July 11, 2021.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.