Legal Alert: New TCPA Rules Take Effect for Telemarketing Calls

by Eversheds Sutherland (US) LLP
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Significant regulatory changes are taking effect under the Telephone Consumer Protection Act (TCPA) on October 16, 2013, due to a revision of the Federal Communications Commission’s (FCC) TCPA rule. The amended rule will now require that consent be in writing for autodialed or prerecorded telemarketing calls to cell phones. The amended rule also eliminates the exception for prerecorded telemarketing calls to landlines where there is an established business relationship. Instead, under the new rule, written consent will be required for prerecorded telemarketing calls to landlines.

The FCC’s TCPA Rule and Revision

The TCPA regulates certain telemarketing and informational calls, texts, and faxes that are made using an automatic dialer or prerecorded message.1 The FCC adopted a rule under the TCPA that generally prohibits making telephone calls to cell phones using an automatic dialer or prerecorded message without the “prior express consent” of the party receiving the call. This rule applies to both telemarketing calls and non-telemarketing calls such as debt collection calls or informational calls. The rule also prohibits telemarketing calls to landlines using a prerecorded message without prior express consent, except that prior express consent has not been required where the caller has an established business relationship with the call recipient.2 The rule does not apply to non-telemarketing calls to landlines, or to calls that are manually dialed using an in-person caller.

The amended rule taking effect on October 16, 2013 will now require “prior express written consent” for many telemarketing calls.3 Specifically, “prior express written consent” will be required for autodialed or prerecorded calls or texts to cell phones. The new “prior express written consent” requirement will also apply to prerecorded telemarketing calls to landlines, and there is no longer any exception for established business relationships.  For non-telemarketing calls to cell phones, the standard remains “prior express consent” and does not introduce the requirement that the consent be in writing. As before, the new rule does not cover non-telemarketing calls to landlines and calls that are manually dialed using a live operator.

For purposes of the new rule, the term “prior express written consent” means an agreement in writing, with a “signature” that “clearly authorizes” the seller to make telemarketing calls or texts using an autodialer or prerecorded voice. The agreement must contain the specific telephone number or numbers to which calls can be made, and the person giving consent cannot be required to give consent as a condition of purchase.  Significantly, consent obtained pursuant to the E–SIGN Act satisfies the requirement of the revised rule.4 Therefore, consent obtained via an email, a website form, a text message, a telephone keypress, or a voice recording is sufficient under the new rule.

Developments in TCPA Class Action Settlements

The TCPA provides a private right of action and continues to spawn class action litigation and settlements. The TCPA provides for minimum statutory damages of $500 per violation without any total damages cap in a class action.5 There have been a number of large TCPA settlements in recent months. At the end of September, Bank of America agreed to settle a putative class action under the TCPA for a reported amount of $32 million, which was reported as the largest TCPA settlement to date.6 Another pending settlement this year includes a class action against Papa John’s, in which the parties announced a $16.5 million settlement in May.

With the new FCC rules and ongoing litigation risk, companies will need to adopt procedures to obtain written consent where appropriate and to maintain adequate records of the specific details of that consent.


1 47 U.S.C. § 227.

2 47 C.F.R. § 64.1200.

3 47 C.F.R. § 64.1200; see also Federal Register, Vol. 77, No. 112.

4 Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 (2000).

5 47 U.S.C. § 227(b)(3) (A court may award up to $1500 per violation for willful or knowing violations.).

6 The settlement resolved several pending cases, including Rose v Bank of America, No. 11-CV-2390 (N.D. Cal.).

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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