Passed into law by congress in 1991 and overseen by the Federal Communications Commission (FCC), the Telephone Consumer Protection Act (TCPA) is the primary federal law governing telephone solicitations, including all manner of telephone, fax, and text message solicitations.
As we continue into 2023, the Telephone Consumer Protection Act (TCPA) is a crucial regulation for businesses that engage in telemarketing, text messaging, and pre-recorded calls. TCPA litigation remains prevalent, and compliance is more critical than ever.
Businesses must verify the accuracy of their consumer data and be aware that TCPA requirements apply even in cases of reassigned, ported, or wrong numbers. Vigilant consumer verification is essential in this context.
Here are some updated statistics to consider:
TCPA regulations apply to all companies, regardless of size, and extend to businesses operating call centers outside the US if they contact US consumers. In addition, business-to-business (B2B) calls are also subject to TCPA restrictions.
Text messages are subject to the same TCPA rules as phone calls, as reaffirmed by the FCC's 2015 Omnibus Declaratory Ruling and Order and the Supreme Court's decision in Facebook v. Duguid. The prohibition on using autodialers to send text messages still applies to devices considered autodialers.
It is crucial to understand the differences between the TCPA and the National Do Not Call (DNC) Registry, the implications of calling reassigned numbers and ported wireless numbers, and the potential penalties for TCPA violations.
In recent years, the FCC has announced plans for a reassigned number database and a new safe harbor rule for reassigned numbers, though the implementation is still pending. In addition, the ported wireless numbers safe harbor remains in effect, providing a 15-day window for companies to call numbers ported from wireline to wireless services, as long as the number is not on the DNC Registry or the company's internal Do Not Call list.
Understanding the concept of prior express consent is vital for businesses, as is being aware consumers can revoke consent at any time and by any reasonable means. Furthermore, it is essential to be mindful of the tricks employed by unscrupulous TCPA litigators and professional plaintiffs to induce costly TCPA violations. By staying informed and up-to-date on TCPA regulations, businesses can minimize their exposure to litigation and better protect themselves and their consumers.
Businesses must stay vigilant in compliance efforts to mitigate the risk of costly TCPA litigation. Here are some additional tips and recommendations to help your business maintain compliance:
By proactively addressing TCPA compliance, your business can reduce the likelihood of costly litigation, protect your brand reputation, and foster positive relationships with consumers.
Dual-Purpose Phone Lines
Sometimes referred to as “mixed-use” lines. Litigators will use one phone number for both business and personal purposes, potentially entrapping marketers who believe they are making calls to a business line when, in fact, it is a personal line for TCPA purposes.
Waiting to Receive Multiple Calls Before Threatening Litigation
Because TCPA fines are levied on a per-violation basis, litigators can juice their numbers by intentionally allowing a company to call them multiple times before they take action against the company.
Bullying for an Out-of-Court Settlement
Litigators will ambush defendants by threatening litigation with the intent of forcing an out-of-court settlement.
Taking Advantage of Reassigned Numbers
Litigators and serial plaintiffs will purchase multiple cell phones with the intent of manufacturing claims using phone numbers they know have been reassigned from their original owner.
Personally Targeting Corporate Officers in Lawsuits
By naming corporate officers and owners rather than merely the company itself, a litigator can apply additional pressure on a defendant.
Litigators and their professional plaintiff accomplices will give consent for their numbers to be called. But rather than answering when called, they will call back from a different cell phone number for which they have not given consent, and talk just enough to identify themselves before hanging up, thus baiting agents into calling back without consent.
Litigators will often target companies with particular, perceived vulnerabilities. Among the sorts of targets for unscrupulous litigators are the following:
The text of the Telephone Consumer Protection Act (TCPA) defines an Automatic Telephone Dialing System (ATDS)—colloquially known as an autodialer—as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Of course, it is not clear how that relatively vague definition written in 1991 applies to the wide panoply of dialing technology available today. Unfortunately, Federal Communications Commission (FCC) rulemaking and case law have not resolved this and instead have created circumstances where the definition of what constitutes an autodialer varies from jurisdiction to jurisdiction.
Much of the conflict regarding the definition of an autodialer revolves around interpreting the TCPA’s use of the word “capacity.” The FCC’s most recent major overhaul of the TCPA is its 2015 TCPA Omnibus Declaratory Ruling and Order. In that document, it interpreted “capacity” in a broad sense, determining that equipment without the “’present ability’ to dial randomly or sequentially” could still qualify as an autodialer if it had “potential functionalities” to do so. This interpretation essentially meant that any device that could potentially dial numbers from a list might be considered an autodialer and thus subject to the TCPA’s regulations on the use of an ATDS.
In 2018, the D.C. Circuit Court issued a decision in ACA International, et al. v. FCC, et al. that struck down the FCC’s broad definition of autodialer, paving the way for the creation of a more reasonable standard. Noting that the 2015 Order’s interpretation of “capacity” essentially had the effect of designating every smartphone as an ATDS, the court vacated that interpretation. This ruling, fortunately, eliminated the overly broad autodialer definition but unfortunately did not offer another definition as a clear replacement, leaving it up to individual courts to interpret the meaning of “capacity” in the TCPA’s definition of ATDS. Two subsequent circuit court decisions have created two conflicting definitions of what exactly is an autodialer.
Three months after the ACA Int’l decision, the Third Circuit Court issued a ruling in Dominguez v. Yahoo that set forth one of the multiple forking paths of what constitutes an autodialer. Following the D.C. Circuit vacating the FCC Order’s interpretation, the Third Circuit determined that its decision was required to interpret the TCPA’s definition of ATDS. The Third Circuit determined that, based on the facts of the case, there was “a genuine dispute of fact as to whether [Yahoo's system] had the present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.” This created the precedent that an autodialer must have the present capacity to both generate and dial numbers either randomly or sequentially.
Three months after the Third Circuit’s Dominguez decision, the Ninth Circuit reached a decision in Marks v. Crunch San Diego, LLC that offered a much more broad interpretation of what “capacity” means in the TCPA’s definition of an autodialer. The Ninth Circuit acknowledged the Dominguez decision but pointedly declined to follow it. Instead, the court found that the TCPA’s statutory definition of an autodialer was ambiguous and “the term ‘automatic telephone dialing system’ means equipment which has the capacity — (1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator — and to dial such numbers automatically (even if the system must be turned on or triggered by a person).” According to this precedent, an ATDS is any device that has the capacity to automatically dial numbers that are stored in a list.
In early 2020, two new rulings in cases in two different circuits set potential precedents for a third definition of what constitutes an ATDS. In Glasser v. Hilton Grand Vacations Company, LLC, the Eleventh Circuit interpreted a key clause (“to store or produce telephone numbers to be called, using a random or sequential number generator”) in the TCPA’s definition of an ATDS such that the phrase “using a random or sequential number generator” modifies both “produce” and “store”. This essentially means that, in the Eleventh Circuit, dialers are only subject to the TCPA’s restrictions on the use of autodialers if they are dialing phone numbers that are randomly or sequentially generated. This interprets the ATDS definition even more narrowly than the Third Circuit’s Dominguez decision. Less than a month later, the Seventh Circuit issued a decision in Gadelhak v. AT&T Services that reached the same conclusion as the Glasser court, extending that narrow ATDS definition to another jurisdiction.
In March 2020, two different district courts in two different circuits handed down rulings in two different Telephone Consumer Protection Act (TCPA) cases that rejected a common argument that would have essentially rendered any computer-based dialer as an Automatic Telephone Dialing System (ATDS). These cases—Decapua v. Metro. Prop. & Cas. Ins. Co. and Hagood v. Portfolio Recovery Assocs.—generally followed the definitions set forth by the Gadelhak and Glasser decisions.
As if to forestall any possibility of a coherent trend, another early 2020 ATDS ruling went the other direction, favoring a broad interpretation of the ATDS definition. The Second Circuit found, in Duran v. La Boom Disco, that the texting programs used by the defendant should be regulated as autodialers. Following the Marks precedent, the Court determined that any device that can dial from numbers stored in a list is an ATDS, holding that “an ATDS may call numbers from stored lists, such as those generated, initially, by humans.” The court also found that a human hitting a “send” button to initiate the text campaign is insufficient human intervention to preclude an ATDS designation.
In July 2020, the Sixth Circuit staked a claim to the broader definition of an ATDS. In Allan v. Pa. Higher Ed. Assist. Agency, the court adopted the Marks definition of an autodialer as essentially anything that dials numbers from a list.
As a result of these wildly differing interpretations of the TCPA’s definition of an autodialer, there were multiple competing precedents that courts are following. This led to a confusing circumstance where the definition of what constitutes an ATDS depended entirely on the particular court jurisdiction—including a split within the state of Michigan where one district followed the Dominguez precedent while the other followed the Marks precedent.
On April 1 (April fools Day) 2021, the Supreme Court handed down a ruling in Facebook v. Duguid that finally resolved these disparities in favor of the more narrow, statutory definition. In the court's unanimous opinion, Justice Sonia Sotomayor wrote, ““We hold that a necessary feature of an autodialer under [the TCPA] is the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.” Thus, the autodialer is finally properly defined.
The main provisions of the Telephone Consumer Protection Act (TCPA) are as follows:
TCPA violations can result in penalties of up to $500 per violation, with willful violations trebled up to $1,500 per violation. There is no cap on statutory damages so thousands of violations can result in millions of dollars in penalties.
Businesses that conduct Business-to-Business (B2B) marketing should be aware of the following vulnerabilities specific to their manner of business:
What are the B2B consent requirements?
Marketers can make Business-to-Business (B2B) calls/texts using an Automatic Telephone Dialing System (ATDS) provided they have proper consent. For marketing purposes, you must have express written consent. The written consent may be an e-signature or button press, but it must include the following disclosures:
Yes. These exemptions cause much confusion in the industry, leading to devastating fines and settlements. In the face of these exemptions, the vagueness of whether Business-to-Business (B2B) calls are covered under the Telephone Consumer Protection Act (TPCA) often leads reasonable people to think they are not. before making calls.
B2B marketing calls are normally exempt from Telemarketing Sales Rule (TSR) DNC rules. They are also likely to be exempt from the Federal Communications Commission’s (FCC) DNC rules. However, some federal rules still apply and, as above, some state rules may still apply including laws specific to B2B.
An automated text message is a text message sent to a consumer or consumers through the use of an automated text messaging platform. Regardless of whether the message itself is manually or automatically generated, it is treated as an automated text message if an autodialer platform is used to deliver the message.
The courts have been unanimous in the viewpoint that a call is a text and a text is a call. Automated text messages should be treated exactly like calls placed using an autodialer and the same consent rules should be observed.
Even after the Supreme Court's ruling in Facebook v. Duguid, the TCPA's regulations on automated text messages stand. While SCOTUS's decision to adopt the narrow definition of what constitutes an ATDS may well exclude most (or possibly all) current text messaging systems from being considered autodialers, the restrictions on automatic texting still exist.
The Federal Trade Commission (FTC) exempts all solicitation calls between a marketer and a business except marketing of nondurable office or cleaning supplies. This means most B2B are exempt from national Do Not Call (DNC) laws, but not every state exempts B2B calls under state law. Some jurisdictions require B2B marketers to register and place a bond.
How do I avoid a TCPA lawsuit?
The best practices for avoiding Telephone Consumer Protection Act (TCPA) violations and the attendant lawsuits are as follows:
Vicarious liability is defined as an attachment of responsibility to a party for harm or damages caused by another party in a lawsuit or civil action.
It is a common practice for many businesses to market their products through the use of independent sales forces and lead aggregator websites. While these can be great sources for obtaining fresh leads, they can also be a trap for Telephone Consumer Protection Act (TCPA) litigation.
If your third-party agents violate the TCPA, you can be found vicariously liable for any resulting damages. Examples of possible violations include the third-party agents calling consumers without the proper consent, making calls or texts on your behalf using an Automatic Telephone Dialing System (ATDS) or prerecorded voice, and not honoring opt-out requests.
When you don’t fully control the strategies that lead generators use to conduct their campaigns, the risk of vicarious liability can be enormous. TCPA violations incurred by independent agents and lead generators acting on behalf of a company will draw that company into any related lawsuits.
No, if you find yourself in this situation, there is no requirement to send notice to consumers.
Approximately 100,000 mobile phone numbers are reassigned by wireless carriers every day. Potentially 20% of data in an average consumer contact list could be made up of reassigned phone numbers. Therefore, theoretically, you could be liable for the maximum Telephone Consumer Protection Act (TCPA) violation of $500 per call or text on up to 20% of your entire campaign.
While the Federal Communications Commission (FCC) has promised to create a comprehensive database of reassigned numbers, none exists currently. Your best defense is to scrub for reassigned numbers and to actively maintain your contact database by asking consumers for updated information.
The Federal Communications Commission (FCC) issued a declaratory ruling in 2020 affirming that peer-to-peer (P2P) texting systems should not be considered automatic telephone dialing systems (ATDS). The Supreme Court's ruling in Facebook v. Duguid also ensures that P2P systems should not be regulated as autodialers.
The Federal Communications Commission (FCC) has held that “written” consent can be obtained on a recorded telephone call, but you must ensure you meet all the requirements of the ESIGN Act or similar state laws regarding electronic signatures.
Yes, but you cannot send a text from an ATDS that says, “Sign up for our marketing program.” That message would be marketing in and of itself, and you would have already violated the Telephone Consumer Protection Act (TCPA). However, you could do a call to action that says, “For automated offers, text DISCOUNT to XYZ number…” When the consumer responds to your offer, request a double opt-in, and get the consumer to agree to the required disclosures. Always ensure full TCPA disclosures are utilized, as well as an opt-out instruction.
Yes. Since they are opting in again, you have consent again.
You do not need consent for the initial automated response if the message is consistent with what your direct response offer has promised. The message must be sent immediately, containing only the requested information and nothing more. Any additional marketing messages would require consent.
It is not legally required to provide customers with instructions on how to opt-out. But it is a very strongly recommended best practice to provide customers with this information. If you don’t do so, it is possible that people will opt out with their own legally sufficient language that is not recognized by your system, leading you to continue to send messages or make calls which now violates the Telephone Consumer Protection Act (TCPA). You need to be able to recognize and honor opt-outs, so always include a simple opt-out instruction (“Reply STOP to Opt-Out” for example).
Yes, you can send one final message confirming the opt-out and offering information on how to opt back in. However, this final message cannot contain any sort of marketing. The Federal Communications Commission (FCC) recommends you send this message no later than 5 minutes after the opt-out occurs.
Yes, opting out of one should result in opting out of both unless you’ve made it clear that there are different requirements. However, you can clarify with the consumer whether they are seeking to opt out of one particular program, or all calls and texts to the number.
Yes, you can have multiple campaigns with their own opt-out requirements, but you should make it very clear to consumers how to do it. For example, text “STOP A” to stop receiving messages from campaign A vs. “STOP B” to stop receiving messages from campaign B. It is also best practice to offer an inclusive opt-out option such as “STOP ALL.”
Purely informational texts follow the same implied consent rules as delivery and service notifications. However, if any part of your informational text could be considered marketing and you are using a device that meets the current standards for what constitutes an automatic telephone dialing system (ATDS), you would need express written consent. Therefore, best practices are to get express written consent even for informational texts.
This specific scenario has not been addressed by the Federal Communications Commission (FCC). In these sorts of circumstances, the FCC looks at a number of factors to determine who is responsible for user-initiated messages such as: Who decides when the text is going to be sent? Is it being used to do an unlawful activity? Are you spoofing? The issue is controlled. In this case, the fact that the consumers are going to be the ones sending the message and are choosing who receives the message makes it seem like the consumer should be responsible. But they are promoting your product, so there could be a vicarious liability issue.
*source- DNC.com Contact Center Compliance*