The revisions generally prohibit the use of an "automatic telephone dialing system" to initiate calls that include an advertisement or constitute telemarketing to any cell phone without prior written consent.
In 2012, the Federal Communications Commission (FCC) revised its regulations under the Telephone Consumer Protection Act ("TCPA"). On October 16, 2013, the final amendments to these regulations requiring prior express written consent for autodialed telemarketing calls to cell phones and prerecorded telemarketing messages will go into effect. These regulations could dramatically affect communications with customers and potential customers.
What Calls Are Affected?
The revisions generally prohibit the use of an "automatic telephone dialing system" to initiate calls that include an advertisement or constitute telemarketing to any cell phone without prior written consent. This includes both phone calls and text messages to cell phones using an automatic telephone dialing system.
The revisions also generally prohibit the delivery of a prerecorded message to a cell or landline that includes an advertisement or constitutes telemarketing unless there is prior express written consent.
What Is an Automatic Telephone Dialing System?
The term "automatic telephone dialing system" has been broadly defined as "equipment that has the capacity to store or produce numbers to be called using a random or sequential number generator and to dial such numbers." This is not limited to predictive dialers, but may also include preview dialers, click-to-call systems or any other technology that can store phone numbers and dial them without human intervention. Those who utilize call center software or a customer management system may be using an automatic telephone dialing system.
What Is Express Written Consent?
"Prior express written consent" requires a written agreement, signed by the party being called, that authorizes the seller to deliver advertisements or telemarketing messages using an automatic telephone dialing system or prerecorded message to the specific number authorized in the agreement. The agreement must include a clear and conspicuous disclosure that the consumer will receive a call via an automatic telephone dialing system and/or prerecorded voice from a specific seller. The agreement must also inform the person that he or she is not required to provide this consent as a condition of purchasing any property, goods or services. The signature can include any electronic or digital form of signature recognized under applicable state or federal law, including any signatures that satisfy the E-SIGN Act. Copies of all written agreements should be kept for a period of five years from the last date that the consent was relied upon to initiate a call.
What If There Is an Existing Business Relationship?
Previously, the regulations provided for an exception to the prior consent requirement for prerecorded telemarketing calls made to consumers with whom the caller had a prior business relationship. The new regulations eliminate that exception. Additionally, there is no existing business relationship exception provided for calls made using an automatic telephone dialing systems.
Are There Any Exceptions?
Yes. The new regulations generally will not apply to calls made for emergency purposes. Additionally, calls made by or on behalf of a tax-exempt, nonprofit organization will generally require only prior express consent instead of prior written consent. A call that delivers a "healthcare" message made by or on behalf of a "covered entity" or "business associate" as defined in the Health Insurance Portability and Accountability Act (HIPAA) is also exempted.
What Are the Penalties for Noncompliance?
The TCPA provides for actual damages or statutory damages that begin at $500 per call and can be increased up to $1,500 per call for willful violations. Claims for TCPA violations are often brought as class action cases.
New Regulations Already in Effect
The revised regulations include additional requirements related to abandoned and dropped call rates and automated opt-out mechanisms for prerecorded telemarketing messages, which are already in effect.
For Further Information
If you have any questions about this Alert, please contact Sandra A. Jeskie, Edward Cramp, Keith Zakarin, Michelle Hon Donovan, any of the attorneys in our Information Technologies and Telecom Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.