WHAT IS THE TCPA?
The Telephone Consumer Protection Act of 1991 ("TCPA") is a federal statute, codified at 47 U.S.C. § 227, et seq., enacted to protect consumer privacy against the proliferation of emerging telemarketing technologies that have enabled mass marketers to reach into the homes of consumers like never before. The TCPA, in combination with the implementing rules of the Federal Communications Commission ("FCC"), codified at 47 C.F.R. § 64.1200, et seq., regulate how and when businesses may call, fax or text both residential landlines and cell phones.
The TCPA creates a private right of action granting individuals the ability to file lawsuits and collect statutory damages whenever they receive unsolicited "robocalls" in violation of the statute. In recent years, most claims have come in the form of class action lawsuits, aggregating the claims of hundreds or even thousands of consumers. The TCPA has become a favorite of class action lawyers because the claims are relatively easy to establish and the rewards are lucrative. The statute takes away the hurdle of proving individual damages by providing for automatic statutory damages of $500 for each violation (or up to $1,500 for "willful" violations). These automatic damages provisions make it much easier for a plaintiff to certify a class as it unifies the claims of all class members. Consequently, when a mass marketing campaign causes hundreds or thousands of TCPA violations, a class action lawsuit can quickly aggregate those individual claims into a case potentially worth tens of millions or even hundreds of millions of dollars. Faced with such staggering potential liability, businesses are often eager to settle TCPA class actions in the early stages, even at great cost.
What is a TCPA violation?
The TCPA places restrictions the following types of telecommunications:
- Unsolicited telemarketing calls to residential (or "landline") telephone numbers where the caller delivers a telemarketing message through an artificial or prerecorded voice.
- All unsolicited calls and text messages to cellular telephone numbers that are made through the use of an automatic telephone dialing system ("ATDS" or "autodialer") or that deliver a message through an artificial or prerecorded voice. With some limited exceptions (emergency calls for example), the restrictions on calls to cellular phone numbers apply to all types of calls, not just telemarketing calls. For example, informational and debt collection calls are governed by the TCPA�s cell phone rules.
- Unsolicited advertisements sent by fax machine ("junk faxes").
- Unsolicited telemarketing calls to landline telephone numbers that are listed on the National Do-Not-Call Registry (or "NDNCR").
The above-listed methods of telecommunication are only permitted if the caller abides by certain specific rules, including, but not limited to:
- For any call to any phone number that uses an autodialer or prerecorded voice that delivers a telemarketing message, the caller first obtains the "prior express written consent" of the called party.
- For any call to any cell phone number that uses an autodialer or prerecorded voice that delivers a non-telemarketing message, the caller first obtains the "prior express consent" (oral or written) of the called party.
- All prerecorded telemarketing calls or text messages provide the customer with an automated and easy way to "opt out" of receiving further telemarketing calls or messages.
- For all unsolicited fax advertisements, the recipient of the fax has given prior express invitation or permission for such faxes. Additionally, fax advertisements can be sent to recipients with whom the sender has an "established business relationship" (or "EBR"), so long as the fax number was provided voluntarily by the recipient. Regulations also require that the fax includes specific disclosures well as a specific mechanism to notify and allow the receiving party to "opt out" of receiving future fax advertisements.
- Calls may be made to numbers on the NDNCR when the caller as an established business relationship with the called party or where the called party has given express written consent.
Businesses that intend to use automated technologies to communicate with their customers or other consumers (or that intend to hire marketing firms to do so on their behalf) are well advised to take careful heed of the TCPA regulatory regime. The penalties for violating the statute are punitive and potentially ruinous. But with careful planning and implementation, it is possible to avoid the TCPA pitfalls and utilize the vast power of today�s telecommunications technologies to connect with people.
GLOSSARY OF TCPA TERMINOLOGY
The full FCC definitions for specific TCPA terms can be found at 47 C.F.R. § 64.1200(f).
Adverstisement: "[A]ny material advertising the commercial availability or quality of any property, goods, or services." 47 C.F.R. § 64.1200(f)(1).
Autodialer or Automated Telephone Dialing System (ATDS): Telecommunications equipment that has "the capacity to store or produce telephone numbers to be called using a random or sequential number generator and to dial such numbers." 47 C.F.R. § 64.1200(f)(2). Some courts have applied the definition of ATDS broadly by focusing on the word "capacity." Those courts have ruled that if the equipment has the capacity to store or produce numbers to be called using a random or sequential number generator it is not relevant whether the equipment actually performed such functions in the particular case at issue. See Satterfield v. Simon & Schuster, 569 F.3d 946 (9th Cir. 2009). Other courts have applied a more restrictive definition, asking whether the equipment has the present capacity to perform such automated functions. See Aja de los Santos v. Millward Brown, Inc., No. 13-cv-80670 (S.D. Fla. June 29, 2014).
Established Business Relationship (EBR): A prior or existing relationship between a business and an individual based on the individual�s purchase or transaction with the business within the 18 months preceding the call from the business or based on the individual�s application for products or services from the business within the 3 months preceding the call. 47 C.F.R. § 64.1200(f)(5).
FCC: The Federal Communications Commission; the federal agency empowered to issue rules and regulations to implement the purpose and intent of the TCPA. See https://www.fcc.gov/rulemaking/02-278.
Junk Fax: An unsolicited advertisement sent by fax to any fax machine (including business or personal) without the recipient�s prior express invitation or permission, except that faxes sent to a customer with an established business relationship are permissible so long as the fax also complies with certain specific notice and "opt-out" requirements. See https://www.fcc.gov/guides/fax-advertising.
National Do-Not-Call Registry or NDNCR: Pursuant to TCPA directives, the FCC, together with the Federal Trade Commission (FTC), established a national Do-Not-Call Registry that applies to all telemarketers (with the exception of certain non-profit organizations). Subject to certain exceptions, commercial telemarketers are not allowed to call telephone numbers that are registered by individuals on the NDNCR. See https://www.fcc.gov/encyclopedia/do-not-call-list.
Prior Express Consent: This term is not specifically defined in the statute or the FCC regulations. The FCC and most courts have construed the term to mean any provision (written or oral) of consent to receive calls at a particular phone number. Thus, when a consumer knowingly provides a phone number to a business, they give that business permission to send commercial calls or messages to the phone number provided. But a minority position adopted by some courts holds that the consent only extends to the receipt of autodialed calls to the extent the consumer expressly authorizes such calls. Additionally, under the FCC�s new rules that became effective in October 16, 2013, "prior express written consent" is required for all robocalls that contain marketing, and that term is defined more narrowly.
Prior Express Written Consent: Unlike "prior express consent," this term is specifically defined in the FCC regulations. It means a written agreement between the caller and the receiver of a call or message that clearly authorizes the caller to deliver to the receiver "advertisements or telemarketing messages using an automatic telephone dialing system or an artificial prerecorded voice," that specifies the phone number to be called and bears the "signature" of the person receiving the call. 47 C.F.R. 64.1200(f)(8). Thus, it requires express consent to receiving robocalls and it requires that consent in writing.
Robocall: Generic term that refers to all calls that are facilitated with automated technology, including an autodialer or prerecorded voice.
Signature (for purposes of "prior express written consent"): Includes a traditional written signature as well as "an electronic or digital form of signature, to the extent that such form of signature is recognized as valid under applicable federal law or state contract law." 47 C.F.R. § 64.1200(f)(8) (ii).
Telemarketing: A call or message that is sent "for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services." 47 C.F.R. § 64.1200(f)(12).