FCC Releases Much-Anticipated TCPA Declaratory Ruling and Order
As we previously reported, the Federal Communications Commission (“FCC” or “Commission”) adopted a significant Declaratory Ruling and Order on June 18, 2015 to clarify aspects of the Telephone Consumer Protection Act (“TCPA”), namely, the use of “automatic telephone dialing systems” and/or artificial or prerecorded voice messages to send telemarketing and informational calls and texts to consumers (“robocalls”). The Order was released and took effect on July 10, 2015, and impacts all businesses that use automated technologies, including text messaging, to communicate with consumers.
As background, the TCPA and the Commission’s implementing rules prohibit (among other things) autodialed and artificial or prerecorded voice calls and texts, unless made for “emergency purposes” (defined as “a situation affecting the health and safety of consumers”) or with the called party’s consent. The consent requirements differ depending on the nature of the call/text (i.e., telemarketing or non-commercial/ informational) and whether it is directed to a landline or cell phone. In summary, telemarketing calls to wireless numbers and residential lines require written consent, informational calls to wireless numbers require prior express consent, but such consent need not be written, and informational calls to residential lines require no consent.
The Declaratory Ruling and Order resolves 21 petitions filed with the FCC to clarify aspects of the TCPA, including calls and texts to phone numbers that have been reassigned, what constitutes consent to receive “robocalls,” and the definition of an “autodialer.” Some highlights of the Order are as follows:
Definition of an “Autodialer”
The Order affirms that an “automatic telephone dialing system” means any technology that has the capacity to store or produce and dial random or sequential numbers, regardless of whether the technology is presently used in that manner (e.g., calls to a set list of consumers), and the term includes predictive dialers. In adopting a broad interpretation, the FCC explained that “parties cannot circumvent the TCPA by dividing ownership of dialing equipment.” Rather, equipment can be deemed an autodialer if the combination of systems enables it to have the capacity to store or produce numbers using a random or sequential number generator and dial such numbers. The definition also encompasses Internet-to-phone text messages to wireless numbers via e-mail or a carrier’s web portal and text messages from messaging apps, so the restrictions on “robocalls” and consent requirements apply. While the FCC acknowledged that “there are outer limits to the capacity of equipment to be an autodialer,” the only clarification offered is “there must be more than a theoretical potential that the equipment could be modified to satisfy the ‘autodialer’ definition.”
Maker/Initiator of a Call or Text
In response to some petitions filed by calling and texting apps, the FCC addressed certain circumstances in which an app (and not an individual user) is deemed the maker or initiator of a call or text and must comply with the TCPA. According to the Order, (1) an app is not the maker or initiator of a text message when an individual uses the service to set up auto-replies to incoming voicemails, and (2) an app is not the maker or initiator of a call when an app user sends an invitational message using the app. By contrast, the Order clarifies that an app is the maker or initiator of text messages that invite consumers who appear in the contact lists of app users to use the app. In addition, the mere fact that an individual’s number appears in an app user’s contact list does not constitute consent from such individual to receive “robocalls” from the app. Thus, express consent must be obtained from such individuals in accordance with the TCPA and Commission rules.
Number Reassignment
If a wireless number has been reassigned to a new subscriber, and a caller makes a “robocall” to such number without knowledge of the reassignment and with a reasonable belief that the call was made with consent, the Order declares that the caller must stop “robocalls” to that number after one call. The Order clarifies that this standard only applies to calls to reassigned numbers where the caller reasonably believed it had consent; misdialed calls and calls where a number is entered incorrectly are not eligible for one additional call, since the caller never had valid consent to place such calls in the first place. If the one call does not provide a caller with actual knowledge of reassignment, then according to the FCC, the caller is deemed to have constructive knowledge, and must cease all further calls. In adopting this standard, the FCC confirmed that the TCPA requires the consent of the new subscriber of a number that has been reassigned, not the intended recipient. This “one call” standard, which does not include any safe harbor, will require businesses to implement processes for determining whether numbers have been reassigned. Merely calling or texting a number one time to confirm may not be sufficient, for example, if no one answers the call or responds to the text, or a voicemail greeting for the called party does not identify the called party by name.
The Order identifies some ways that callers could seek to determine whether a number has been reassigned that do not involve using an autodialer. Those include manually dialing or sending an e-mail to confirm the identity of the called party, checking databases of numbers that have been reassigned, and requiring consumers by contract to notify callers when they have relinquished a number. Nevertheless, the FCC declined to offer a safe harbor for well-intentioned actors who, despite these efforts, might make calls and texts in error. In addition, as some commenters and Commissioners noted, no comprehensive database of reassigned numbers currently exists, and there is no guarantee that all consumers will comply with requests from callers for confirmation about reassigned numbers. In short, callers that choose to use autodialers risk TCPA liability.
Revocation of Consent
The Order confirms that consumers have the right to revoke their consent to receive “robocalls” “at any time” and “through any reasonable means.” Such revocation may be oral or written, and a caller cannot limit the manner in which revocation may occur. The FCC failed to specify what constitutes a “reasonable” means; as an example, and without limitation, the FCC explained that consumers can revoke their consent “by way of a consumer-initiated call, directly in response to a call initiated or made by a caller, or at an in-store bill payment location, among other possibilities.” In light of the many and varied ways that consumers could revoke their consent, businesses that place “robocalls” will need to have processes in place to ensure that all revocations of consent, however made, are recorded and honored. Of course, even with good practices in place, there is still room for error.
One-Time On-Demand Texts
In response to a petition from the Retail Industry Leaders Association, the FCC found that a one-time on-demand text message sent in response to and immediately after a consumer’s request for information does not violate the TCPA or Commission rules, provided that the text only contains the information requested. According to the FCC, such texts do not constitute “telemarketing,” but rather fulfillment of a consumer’s request to receive the text. This determination is consistent with a prior Commission ruling that a one-time text to confirm receipt of a consumer’s opt-out request does not violate the TCPA or Commission rules as long as the text is sent within five minutes of the opt-out request.
Exceptions to the Consent Requirement
The Order provides a few very limited exceptions to the TCPA consent requirement, including free, time-sensitive financial fraud, data breach, and medical alerts from financial institutions and healthcare providers. The Order imposes restrictions on the nature and frequency of such alerts, however, and consumers must still be able to opt-out. Other types of financial and healthcare related calls and texts, such as marketing and debt collection calls and texts, are not similarly exempt.
Robocall-Blocking Technologies
The Order also confirms that carriers and VoIP providers will be allowed to offer robocall-blocking technologies to consumers.
* * *
The Declaratory Ruling and Order is significant for all businesses that make “robocalls” or are contemplating such practices. The intent of the TCPA, and the purported intent of the Order, is to protect consumers from unwanted, harassing calls without impeding legitimate business communications, but aspects of the Order could subject even the most well-intentioned businesses to a risk of FCC enforcement and/or class action lawsuits. The penalties for non-compliance can add up quickly, with statutory damages of $500 per call/text ($1,500 if willful). Businesses should review the full text of the Order to ensure that they understand their obligations and potential liability under the TCPA based on their operations and the services they provide.
For more information, contact Tracy P. Marshall at marshall@khlaw.com or +1 202 434-4234. Follow privacy, advertising, and data security developments and similar topics on Keller and Heckman’s Consumer Protection Connection blog.