New Telephone Consumer Protection Act (TCPA) Rules Restrict Text Messages, Autodialed Calls, and Prerecorded Calls
Passed by Congress in 1991, the TCPA imposes restrictions on, among other things, marketing calls and text messages that use automated dialing systems or prerecorded/artificial voices. In 2012, the Federal Communications Commission (FCC) unveiled new rules under the TCPA, which become effective on October 16, 2013. According to the FCC, the revisions are intended to (1) strengthen the protections for consumers from unwanted telemarketing calls and (2) make the FCC’s rules consistent with the Federal Trade Commission’s analogous Telemarketing Sales Rule.
The New Rules
Retailers will now be required to obtain prior express written consent for all autodialed or prerecorded telemarketing calls. To obtain this consent, the consumer must (1) receive a clear and conspicuous disclosure of the consequences of providing the consent and (2) agree unambiguously to receive such calls at a designated telephone number. The FCC has confirmed that compliance with the E-SIGN Act—including consent via email, website form, text message, telephone key press, or voice recording—will satisfy the new requirements. The consent must be obtained without any requirement, direct or indirect, that the agreement be executed as a condition for the purchase of any good or service. Where any question arises, the seller will bear the burden of demonstrating that the written consent was sufficient.
Consistent with this heightened written consent requirement, the FCC rules also abolish the “established business relationship” exception. The FCC previously allowed telemarketing calls when the seller had prior business dealings with a consumer, based on the view that the consumer in that circumstance impliedly consented to be contacted.
The new FCC rules add additional requirements for prerecorded or “robocalls,” requiring an interactive opt-out mechanism that is announced at the outset of the call and is available throughout the call. Moreover, the new FCC rules tighten the current limits on “abandoned” calls during the course of an advertising campaign. “Abandoned” calls are those initiated by predictive dialers that are then disconnected when an operator is unavailable to take the call.
Retailers should review their current marketing policies and practices with respect to promotional calls and text messages sent to customers. The unavailability of the “business relationship exception” will be of particular importance to retailers as many have traditionally relied on this exception because of their ongoing interactions with customers at stores and through loyalty, warranty, or other programs. Because the TCPA provides a private right of action and offers significant statutory penalties, retailers that fail to make the necessary changes in response to the new FCC rules face a risk of individual and class action litigation.