New FCC rules requiring express written consent now in effect

If you’re a for-profit company that engages in or relies on telemarketing, BEWARE! Rule revisions adopted by the FCC nearly two years ago have recently taken effect. Those revisions, adopted pursuant to the Telephone Consumer Protection Act (TCPA) impose significantly tighter restrictions on certain telemarketing activities. Since the number of potentially expensive TCPA-based law suits targeting telemarketers continues to grow, everyone involved in such activities should pay close attention to the revised requirements.

The TCPA, enacted more than two decades ago, is Congress’s effort to protect consumers from unsolicited telephone and fax advertising. The particular TCPA-based rules at issue here involve: (1) autodialed or pre-recorded telemarketing calls to cell phones; and (2) telemarketing calls, to any residential line, using an artificial or prerecorded voice. Historically, both types of call have been permitted under certain limited circumstances. The new rules tighten up those limited circumstances considerably.

First things first. What is “telemarketing?”, you ask. The FCC defines it (in Section 64.1200(f) of the rules) as

the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

Some telemarketing calls, often referred to as “robocalls”, are made using automatic dialing equipment (autodialers); some may include prerecorded or artificial voices. With few exceptions, all telemarketing calls require some form of consent on the part of the party being called.

Telemarketing to cell phones and prior express WRITTEN consent.  Prior to October 16, 2013, if you wanted to deliver a telemarketing call or text to a cell phone using an autodialer or prerecorded/artificial voices, the FCC’s rules required you only to have “prior express consent” from the party called. (That’s the the same level of consent required for non-telemarketing calls.) As of October 16, though, “prior express written consent” is now required for any such telemarketing calls to cell phones.

The FCC’s insistence on written consent is a major change. Just what is “prior express written consent”?  It’s a written (naturally) agreement that:

  • contains the signature of the person to be called;
  • includes the specific phone number to which the person authorizes calls; and
  • explicitly authorizes the use of an autodialer and/or artificial/pre-recorded voice to deliver telemarketing calls or text messages to the consumer.

In addition, the written agreement must contain a “clear and conspicuous disclosure” informing the person signing that he or she is not required either to sign the agreement (directly or indirectly), or to agree to enter into such an agreement as a condition of purchasing any property, goods, or services.

While a handwritten signature can fulfill the requirements of the new rule, any electronic or digital form of signature recognized under state or federal law will also do the trick – so signatures may be obtained via email, website form, text message, telephone keypress, or voice recording.

It is important that written agreements be properly drafted to protect those who engage in or utilize telemarketing. In any litigation alleging a violation of the TCPA, the telemarketer bears the burden of proving that a clear and conspicuous disclosure was provided and that unambiguous consent was obtained. Once a written document reflecting such disclosure and consent is in hand, telemarketers should be sure to retain copies in order to demonstrate consent should the need arise.

Calls to residential numbers and the loss of the established business relationship exemption to the consent requirement.Since 1992 the FCC has permitted prerecorded telemarketing calls to residential lines without the need for additional consent provided that the caller had an established business relationship (EBR) with the consumer. However, in 2008, the Federal Trade Commission – which shares jurisdiction over such things with the FCC – eliminated its own EBR safe harbor. Now, to conform its approach to the FTC’s Telemarketing Sales Rule, the FCC has amended its corresponding rule to require prior express written consent for prerecorded telemarketing calls to residential lines even where the telemarketer and called party have an EBR. The term “prior express written consent” here requires the same components described in the preceding section.

What about previously obtained consent?Because the new FCC rules impose new requirements on these types of telemarketing calls, any consent previously given by a consumer may have to be revised to meet the new standards if the telemarketer wishes to continue making such calls to that consumer.  Ironically, telemarketers will have to be careful not to violate the new rules in the process of contacting consumers to obtain new consents.

The penalties for noncompliance.The FCC can impose monetary forfeitures of up to $16,000 for each violation of its TCPA rules (with a statutory maximum of $122,500 for any single continuing violation). Perhaps more ominously, the TCPA also provides a private right of action for consumers to sue in state or federal courts. In other words, each and every person on the receiving end of a telemarketing call for which the telemarketer cannot demonstrate “prior express written consent” can sue for actual monetary damages or statutory damages of $500 per call (and up to $1,500 per call for “willful” violations). And don’t think that such suits are unlikely: class action suits alleging hundreds or thousands of violations (with aggregate claims easily in the six or seven figures) are something of a “growth industry” among some enterprising plaintiff’s attorneys.

Anyone engaging in or utilizing telemarketing practices should review their procedures and documentation to confirm that they are in full compliance with all governmental rules.  Failure to do so could be bad news in the event of FCC enforcement action and civil litigation. Review of those procedures and documentation with counsel could also prove to be helpful.