FCC Issues a Plethora of Rulings That Will Likely Bring More Lawsuits Under the Telephone Consumer Protection Act (TCPA)
The Telephone Consumer Protection Act (TCPA) regulates when businesses can call residential landlines, and call or text cell phones for marketing as well as for debt collection and informational calls. There is no safe harbor in the law: A single call prohibited by the law entitles the called party to statutory damages. Although the statutory damages are not huge ($500 per call, or $1,500 for a willful violative call), where the dollars really stack up are in class actions. Major banks, retailers, travel companies, and fitness centers have all entered into multi-million dollar settlements in class action lawsuits in the past several years under the TCPA.
The Federal Communications Commission (FCC) issues regulations and orders interpreting and clarifying the TCPA. On June 18, 2015, the five-member commission issued rulings at a contentious meeting that will affect how businesses handle consumer consent to calls. The FCC will publish written orders on these rulings. Below are the most significant FCC rulings from the June 18 meeting:
Revoking consent: In order to call or text a cell phone using an automatic telephone dialing system (ATDS) or prerecorded or artificial voice (i.e. a robocall or robotext), a business must obtain the consumer’s prior express consent. That consent must be in writing if the business is going to transmit marketing messages. Courts have been split on whether a consumer can revoke consent, and if so, whether written revocation is necessary. The FCC ruled that in the case of robocalls or robotexts, consumers do have the right to revoke consent. Revocation can be accomplished in “any reasonable way” and “at any time.” This means consumers cannot be required to fill out a revocation-of-consent form. They can simply tell a caller that they revoke consent, and that revocation must be honored.
Reassigned numbers: With all of the cell phones and landlines out there, phone numbers are frequently recycled. This leads to the situation where a consumer provides express consent to a business to call a particular number, and then the number is reassigned to a different phone. There was great uncertainty when a business can be liable under the TCPA for continuing to call that reassigned phone number. The FCC stated that if a phone number has been reassigned, companies must stop calling the number after one call.
Third party consent: A new situation has arisen with cell phone apps where a person downloads an app, and the app then accesses the contacts in the person’s phone. From that information, a company then robocalls or robotexts all of the person’s contacts. The FCC ruled that this violates the TCPA. The company does not have consent from the person’s contacts to robocall or robotext them. However, if there is human intervention, meaning the person who downloads the app must press “yes” to give the app permission to contact the person, then it would not be a robocall or robotext and would not violate the TCPA.
Affirming the definition of ATDS. An ATDS is defined in the TCPA as a technology “with the capacity” to dial random or sequential phone numbers. The FCC confirmed that robocallers cannot avoid TCPA liability by changing technology design or by calling from a list of phone numbers, rather than by random or sequential dialing.
Texts. The FCC confirmed, as cases have held, that text messages are regulated by the same TCPA provisions that apply to cell phone calls. The FCC ruled that equipment used to robotext via the Internet is an ATDS and therefore requires consent.
Fraud alerts. The FCC ruled that free calls or texts to consumers’ cell phones to alert them of possible bank account fraud, remind them to refill their medications, or other similar financial or health care alerts are allowed without prior express consent. However, these alerts must be free from any marketing or debt collection content. Also, consumers must have the ability to opt out of these calls and texts at any time.
Prohibiting more than one call to a reassigned phone number, allowing revocation of consent by any reasonable means (not just written), and strengthening the interpretation of an ATDS will likely lead to more lawsuits. Unfortunately, the FCC did not provide businesses with any protection from strict liability. Regarding revocation, it will be important for businesses to make sure they have policies in place to note a consumer’s revocation of consent and immediately halt calling or texting that phone number. Also, it will be essential for businesses to implement a mechanism to note when a phone number has been reassigned to immediately stop all calls and texts to that phone number. Additionally, businesses will need to reevaluate their calling technology to determine if it fits within this broadened definition of an ATDS.
The clarification about fraud and health care alerts is the only positive for businesses in the FCC rulings. However, it will be important for businesses who issue these alerts to avoid having any marketing information during the call, even offering free services.
For more information about the TCPA or to discuss liability or insurance coverage for TCPA claims, please contact Sarah R. Anchors at (602) 229-5788/sarah.anchors@quarles.com, or your Quarles & Brady attorney.