Introduction to TCPA
The Telephone Consumer Protection Act (TCPA) is a U.S. law that restricts telemarketing calls, auto-dialed calls, prerecorded calls, text messages and unsolicited faxes. The Federal Communications Commission (FCC) first adopted rules implementing the TCPA in 1992. Although it was originally intended to regulate the growing number of unwanted calls and faxes, today the TCPA and accompanying FCC regulations apply to all forms of consumer and commercial communication via automatic telephone dialing systems, or "autodialers," and artificial or prerecorded voice messages, including AI-generated recorded messages. It also affects the use of automatic texting systems for callers to reach individuals via SMS text messaging . These regulations provide important privacy protections to consumers and, consequently, must be observed by companies communicating with their customers via telephone or SMS text message. Businesses failing to follow the TCPA may face severe penalties, including hefty damages awards.
The TCPA prohibits any individual or entity from making any non-emergency call without prior express written consent with a specific purpose of marketing or telemarketing to an emergency line, hospital, emergency medical services provider, or operator of the emergency line. This restriction applies to international calls as well.
What are TCPA Opt-Out Requirements?
The Telephone Consumer Protection Act (TCPA) of 1991 is a federal law that prohibits certain types of commercial communications that annoy, scare, or coerce consumers into responding or taking action. The TCPA specifies a number of requirements organizations must follow when reaching out to consumers. As part of those requirements, companies are legally obligated to provide persons who are contacted with a clear opportunity to opt out of the messages. In other words, consent is not enough to send marketing communications and solicitations. Even if you have obtained permission to call or text a consumer, you are required by law to give them the option to no longer receive such communication. TCPA opt-out requirements include: Organizations must include opt-in, opt-outs or stop or unsubscribe commands in their solicitations, automated messages, contest announcements and new releases.
Best Practices for TCPA
Businesses should adopt the following best practices to ensure compliance with the TCPA’s opt-out requirements:
Maintain appropriate and thorough record keeping systems to document consent. Documenting consent is important for a number of reasons. First, it provides evidence that the sender believed it had consent to send a communication – if consent is not documented, it will be difficult to prove it existed if challenged. Second, documentation of consent proves helpful in evaluating your defense against a TCPA action (or solicitation). For example, if records provide the date of a customer’s consent (as required by the FCC regulations) it would be prudent to amend other records (e.g., noting when the last call was made). Third, documenting consent is also advisable because to succeed on a claim for relief, a private litigant under the TCPA must demonstrate (among other things) that the plaintiff is "a person who received" a prohibited text message. If records cannot be maintained, it may be possible for a customer to claim, for example, that they never provided consent to receive any such calls.
If adopting an automated method for processing opt-outs, businesses must ensure it is designed so that (1) it is secure, (2) it is user-friendly, (3) it does not rely solely on voice recognition technology, and (4) it takes into account the service or product sold and how the consumer may have opted into the service or product.
Adopt and implement internal do-not-call policies to track and implement opt-outs.
Implement a written written do-not-call policy.
Develop a process by which a business will comply with an opt-out request.
Consequences of Not Following TCPA
Failure to abide by the opt-out requirements of the TCPA can lead to legal and financial repercussions, including fines, increased litigation, and reputational damage. In particular, failure to honor an opt-out request can lead to statutory penalties of $500 per call and up to $1,500 per call for "willful or knowing" violations. The financial consequences are particularly dire when the violation is a multiple-party robocall. In such cases, businesses can easily rack up $1,000 or more in statutory damages for the first few calls and then millions, or tens of millions, of dollars in total liability for subsequent calls.
For example, Meyer v. Portfolio Recovery Associates, LLC, 707 F.3d 1036 (9th Cir. 2012), provides a cautionary tale for all businesses attempting to comply with the TCPA. That case involved a law firm’s unsolicited fax advertisement offering legal services for the settlement of either credit card debt or motor vehicle accident claims. The law firm sent a mass fax advertisement to thousands of recipients, but failed to maintain a proper do-not-fax list or to honor opt-out requests properly .
The court upheld the district court’s award of statutory damages totaling just under $20 million — $500 for each of the 37,000 faxes sent. Although the district court reduced the STAA award to approximately $4.3 million, the appellate court upheld the lower court’s imposition of $4.3 million in equitable relief. This case should set an example for all businesses about the high stakes associated with "willful" violations of the STAA.
Further, in Golan v. FreeEats.com, Inc., 629 F.3d 1040 (10th Cir. 2010), the court upheld a $12.8 million damages award against FreeEats.com, Inc., which sent 8,301 autodialed, prerecorded calls without consent to every cell phone number in a database that purportedly listed only cell phone numbers for which consent had been obtained. The court held that the TCPA’s private right of action permitted recovery for more than one TCPA violation per call, notwithstanding the fact that each individual autodialed, prerecorded call that FreeEats.com placed resulted in only one TCPA violation.
Consumer Rights with TCPA
Consumers have rights under the TCPA to opt out of unwanted calls, texts and faxes. It is important that these rights are exercised the right way.
Many marketing companies may tell you that you can opt out of telephone calls or text ads by simply calling a telephone number or sending an email to an address. However, know this: There are specific legal requirements under the TCPA that must be followed. If a company does not comply, you may be entitled to TCPA damages of $500 per call and up to $1500 per call if the company willfully and knowingly violated their TCPA obligations. TCPA dialing systems and call centers are now being created that mimic consumers voices, respond during calls and can even make up answers to questions if none are available. When you demand to be placed on a "do not call list" be certain to ask for the actual legal name of the company that is calling you. Do not accept aliases or fictitious business names. If you ask a company to cease and desist contacting you, you must email them the following: "Please retain all records to show that I am on your companies "do not call" list. In the future if I receive any phone calls from anyone representing your companies I will seek the maximum allowable damages under the Telephone Consumer Protection Act as my retention of counsel is already set up." For a "do not call" request to be effective, written notice should be sent by certified mail, return receipt requested, because the TCPA suggests that telemarketers cannot call you if they know not to. The payment of the certified mail and receipt may result in evidence that the company received your written notification. This TCPA law applies to consumers, businesses and other organizations.
Upcoming Trends with TCPA
Potential Future Trends in TCPA Regulations: Looking Ahead
While technological advancements have led to an increase of telemarketing communications, regulators and legislators are paying close attention to consumer complaints and are often quick to respond by requiring companies to further update their practices in line with existing TCPA requirements. The combination of the rapid changes in technology and the stringent compliance requirements that have been put in place make it difficult for companies to project future trends. One potential trend that we may expect to see in the not-too-distant future is an update to both the TCPA and the FCC’s related rules. Specifically, many predict that the federal Do-Not-Call list will be updated to allow for opt-outs to be completed via text message or through social media. Federal law currently requires telemarketers to stop calling any individual who has opted out of receiving messages "without unreasonable delay" after a consumer informs the caller to do so. While there is no specific time window, courts have held that 30 days is an appropriate timeline. Unlike standard phone calls which can be clearly recorded and tracked internally, it is more difficult to manage "hard" opt-out requests via text message. Adding this new functionality to the DNC List and/or the TCPA regulations altogether will reflect the prevalence and increased popularity of text messaging as an effective mode of communication among consumers. Another area for potential updates is the current TCPA regulations on notices and do-not-call requests. The opt-out requirement under the TCPA applies only to prerecorded telemarketing messages. These callers are required to provide notice of the prohibition against making further prerecorded calls after receiving an opt-out request. Many states have implemented additional requirements specific to prerecorded calls , requiring separate consent for prerecorded calls that are distinctive from consent to receive live calls. Consumer preferences are continually evolving with a demand for an ability to engage with a company or brand in their own preferred mode of communication. As the use of artificial intelligence becomes more commercially viable, we may start to see more apparent regulatory movement in this space to keep pace with technology. As the technology used by marketers continues to develop, so too will regulatory requirements. While the FCC Telco DNC has stayed the same since 2004 (and the regulatory scheme has not had a significant update since 2008) advancements have increased consumer communications. It is foreseeable that the FCC will revise its Telco DNC regulations to align with changes to technology. This will allow consumers to opt out of calls even when they may be directed to another number before reaching the intended live operator. For example, some may suggest that there be a standardized opt-out process for telemarketers using a selected "do not call" identifier. This would be used to stop calls to a requested telephone number by any telemarketer rather than forcing a consumer to identify each and every telemarketer and their numbers to which unwanted calls are being directed.