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New Telephone Consumer Protection Act (TCPA) Rules Restrict Text Messages, Autodialed Calls, and Prerecorded Calls

Background

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. 

Practical Implications

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. 

Copyright © 2022 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume III, Number 273
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About this Author

Gregory Parks, privacy and cybersecurity lawyer, Morgan Lewis
Partner

Gregory T. Parks counsels and defends retail companies and other consumer facing clients in matters related to privacy and cybersecurity, class actions and Attorney General actions, consumer protection laws, loyalty and gift card programs, retail operations, payment mechanisms, product liability, waste management, shoplifting prevention, compliance, antitrust, and commercial disputes. If it is important to a retail company, Greg makes it his business to know it. He handles all phases of litigation, trial, and appeal work arising from these and other areas. Greg is the co...

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Anne Marie Estevez, labor and employment lawyer, Morgan Lewis
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Anne Marie Estevez defends clients in complex, class, and collective action employment, Americans with Disabilities Act (ADA), public accessibility, and consumer class action cases in US federal and state court. Fluent in Spanish, she represents a broad range of US and international clients in employment and labor-based cases nationally, from wage and hour to discrimination to trade secrets litigation. Anne Marie also counsels employers nationally in these areas, negotiates high-level executive contracts and terminations, and handles due diligence for complex employment...

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Joseph Duffy, litigation attorney, Morgan Lewis
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A nationally recognized litigator, Joseph Duffy defends class actions in US federal and state courts. As co-head of the litigation practice’s Retail Industry Initiative, he focuses on the unique challenges facing retail companies, representing retailers in consumer class actions, contract disputes, and compliance and privacy matters. He also litigates class actions for financial services companies involving lending practices, foreclosure activity, and debt collection. Joseph earned recognition as a Class Actions and Mass Torts “Powerhouse” in BTI’s Litigation Outlook...

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Ezra Church, Litigation Lawyer, Morgan Lewis
Partner

Ezra D. Church focuses his practice on class action lawsuits and complex commercial and product-related litigation, with particular emphasis on the unique issues facing retail, ecommerce, and other consumer-facing companies. Ezra also focuses on privacy and data security matters, and regularly advises and represents clients in connection with these issues.

215.963.5710
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