Companies that use telemarketing campaigns must be ready for changes to “prior express consent” requirements that go into effect on October 16, 2013. The new rules were issued by the Federal Communications Commission (FCC) under the Telephone Consumer Protection Act (TCPA). Beginning October 16, companies must obtain “prior express written consent” before making a telemarketing call to a wireless number (either consumer or business) using an automated dialing system or an artificial or prerecorded voice, or before calling a residential line using such a voice to deliver the message.” Further, the FCC interprets text messages to be “calls” under the TCPA, so prior express written consent is required for both calls and texts. The new FCC rules can be found here.
“Prior express written consent” means that there must be a written agreement, signed by the person receiving the call or text, with a “clear and conspicuous disclosure” that specifically authorizes the seller to send telemarketing communications using an automatic telephone dialing system or an artificial or prerecorded voice. Also, the disclosure must specifically note that the person is not required to sign the agreement as a condition of purchasing any property, goods or services. The person consenting to receive telemarketing communications must also provide authorization for the specific telephone number that may be contacted. As a result of these changes, typical industry “opt-in” language to receive telemarketing messages will not be sufficient for TCPA compliance.
The signature on the agreement may be electronic or digital. A person may “sign” the consent by various methods, including a website form, email, keypad touch, or voice recording. Companies should be careful to clearly identify the authorized calling party in the agreement. If any question regarding consent arises, the burden is on the company to demonstrate that clear and conspicuous disclosure was provided and that unambiguous consent was obtained.
Before the new rules, a company conducting a telemarketing campaign could rely on a “prior established business relationship” for some pre-recorded “robocalls” for telemarketing to residential lines. That exception has been eliminated in the new rules. Companies now need explicit signed consent even from their current customers.
Certain categories of calls placed to residential lines still do not require any form of prior express consent, including non-telemarketing informational calls and political and nonprofit entity calls. Autodialed or prerecorded calls that wireless carriers make to their customers free of charge also do not require any form of prior express consent. However, the existing prior express consent requirements for other non-telemarketing calls to wireless numbers remain.
Violations of the TCPA and the new consent rule may expose companies to hefty damages. Under the TCPA, a consumer may seek statutory damages ranging from $500 to $1,500 for each, individual non-complying robocall or SMS message, and there is no cap on total damages. This new, more restrictive rule likely will spawn even more consumer class actions against telemarketers, especially on top of the recent FCC ruling that a seller can be vicariously liable under the TCPA for calls made by third-party telemarketers (discussed in a recent Bloomberg BNA article written by authors of this Client Alert).
Finally, even if the requisite prior consent is obtained, it should not be considered irrevocable. A Federal appellate court in Philadelphia recently ruled, the first such court to do so, that a consumer may revoke prior express consent and there is no time limit on when the consumer is able to do so.
In light of these changes, and evolving judicial application of the new requirements, all companies employing their own or third-party telemarketing resources should carefully examine their practices and procedures to ensure TCPA compliance and avoid potential exposure to unwanted litigation.
If you have questions about the TCPA or telemarketing legal issues, including compliance strategies, please contact us.