FCC to Clarify Scope of TCPA
Regulating On Demand Texts
On January 22, 2014, the Federal Communications Commission (FCC or the Commission) released a public notice seeking comment on a petition for declaratory ruling filed by the Retail Industry Leaders Association (RILA) on December 30, 2013. RILA requests in their petition that the FCC clarify that the Telephone Consumer Protection Act (TCPA) does not require “prior express written consent” for one-time text messages that respond to consumer-initiated requests for text offers, otherwise known as on demand texts. Comments were due February 21, 2014, and reply comments are due March 10, 2014.
In their petition, RILA states that the Commission could not have intended for the consent rules to apply to telemarketers’ one-time text message responses to on demand texts. The consent rules state that it is unlawful to “initiate, or cause to be initiated” any telemarketing/solicitation call to a wireless number using an automatic telephone system or a prerecorded voice absent the prior express written consent of that specific consumer. Instead, RILA states that because the consumer, as opposed to the telemarketer, initiates on demand texts, such messaging is “more akin to informational texts,” which the FCC has previously concluded are not covered by the consent rules.
Background
Congress passed the TCPA into law in 1991, and the FCC is empowered to issue regulations implementing the act. The TCPA establishes limitations on the use of unsolicited telemarketing calls, faxes, prerecorded/autodialed calls, as well as text messages, so long as they are sent using an automatic telephone dialing system (ATDS). Also, the TCPA requires telemarketers to receive “prior express consent” from consumers for such calls and text messages. Furthermore, the TCPA allows individual consumers to file lawsuits and collect damages for receiving such unsolicited calls and text messages.
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In June 2012, the Commission adopted a new interpretation of the “prior express consent” requirement for telemarketing calls that went into effect on October 16, 2013. This new interpretation requires a signed, written agreement where the consumer specifically consents to receiving telemarketing calls and/or text messages sent by telemarketers by automated systems, artificial callers, and prerecorded voices. The Commission’s new interpretation of the prior express requirement obviates the “pre-existing business relationship” exemption from the TCPA’s consent rules. The old exemption allowed telemarketers to contact consumers without their consent via ATDS. Now companies no longer enjoy that exemption.
Application of the New Consent Standard
Instead, as of October 16, 2013, telemarketers must obtain clear and unambiguous consumer consent in order to call or text consumers via ATDS. Specifically, prior express written consent requires:
1) A signature in a manner that complies with the E-Sign Act or state law including email, website form, text message, telephone key press, or voice recording;
2) A clear and conspicuous disclosure that the consumer will receive future texts on behalf of a specific advertiser;
3) A clear and conspicuous disclosure that the consumer’s consent is not a condition of purchase; and
4) A clear and conspicuous disclosure that the consumer must designate a phone number at which to be reached (that is not prepopulated by the advertiser in an online form).
When a dispute arises, the telemarketer bears the burden of proof to demonstrate (1) that a clear and conspicuous disclosure was obtained, and (2) that the consumer unambiguously consented to receiving telemarketing calls to the specific number provided to the telemarketer. Also, the telemarketer must ensure that the consent is timely, as the statute of limitations limits the validity of the consumer’s consent to four years.
If the telemarketer is unable to provide evidence of valid, timely consumer consent, the TCPA provides for both actual and statutory damages ranging from $500.00 to $1,500.00 per unsolicited message. Courts will consider whether the telemarketer “willfully” or “knowingly” violated the TCPA in determining the final amount of statutory damages to award. However, in class action suits, plaintiffs only need to demonstrate that the calls or text messages at issue were delivered unsolicited via an ATDS in order to collect statutory damages.
How to Obtain Consent under the New Rules
The issue now becomes how a prepaid service provider can obtain consent if it cannot send customers an SMS text message requesting consent. Such providers have three options. First, providers may seek consumer consent through SMS recharge/ purchase receipts since these messages are usually not delivered via an ATDS, nor are they considered prohibited promotional/ advertising messages. Second, prepaid service providers that have customer email addresses could send those customers emails pointing the customers to web-based TCPA-compliant forms. Finally, providers could implement an IVR protocol that asks customers to opt-in via a telephone key press.
Important Takeaways
It appears that in light of the Commission’s current interpretation of the TCPA, if the agency grants RILA’s petition, it would be extremely narrow in scope. The current consent rules explicitly state that a prior business relationship exemption is no longer applicable. Thus, if the Commission permits an exception for on demand texts, sent in response to consumer-initiated requests for texts, then that exception would have to be a narrow reinstatement of the now obsolete exemption. All other forms of previous contact between the provider and consumer would still be exempt.
It remains to be seen how the Commission will ultimately respond to RILA’s petition. However, due to the possibly narrow scope of a grant of RILA’s petition, providers should continue to strive to gain sufficient evidence of prior express written consent before initiating calls or text messages via ATDS. •
Jonathan S. Marashlian is the Managing Partner at Marashlian & Donahue, LLC, The CommLaw Group, a Washington, DC-area law firm specializing in federal and state telecom and technology matters. Marashlian is the winner of two 2013 Lexology/International Law Office (ILO) Client Choice Awards, named overall winner in the Telecommunications Law-US category; his firm was named Leading Customer Service Law Firm of the Year and Best Communications Law Firm in the US by ACQ Awards. Marashlian was assisted by Keenan Adamchak, Law Clerk and a 2014 Juris Doctor candidate, currently attending the George Washington University Law School.
Disclaimer: This article is intended for informational purposes only and is not for the purpose of providing legal advice. You should not act upon the information in this article without seeking professional counsel.
