Big Changes Coming For Telemarketing Rules

Over the last couple of decades, technology has advanced at a rate that’s often left laws and regulations behind. The rise of faxes, cell phones, and smart phones – and their use by companies as a marketing tool – has required a robust response from Congress that has, at times, been somewhat slow-paced. The current body of laws regulating contact between companies and consumers, the Telephone Consumer Protection Act, was first enforced in 1991 – more than twenty years ago. Since then it’s been updated to govern the use of voice mails, text messages, and other advancements in technology, but Federal Communications Commission (FCC) guidelines have tended to offer a marketer-friendly interpretation of what’s allowed.

Broadly speaking, companies require a consumer’s permission before they are allowed to initiate contact for marketing purposes.

Beginning October 2013, however, updated FCC rules look set to change the landscape significantly. For consumers, it’s a very good thing.

The TCPA’s consumer protections are aimed at preventing companies from bothering individuals through use of their personal telephone numbers. As such, contact for marketing purposes is heavily regulated, with automated dialers, artificial callers, prerecorded messages, and unapproved text messages all generally prohibited. To define whether calls and texts are appropriate, the TCPA relies on the concept of ‘prior express consent.’ Broadly speaking, companies require a consumer’s permission before they are allowed to initiate contact for marketing purposes, and if consent is withdrawn, communications must stop.

It is the FCC’s current understanding of what constitutes ‘consent’ that tends to favor companies.

Since 1992 the commission has taken a marketer-friendly stance. Any individual who knowingly gave their contact details to a business was said to have effectively given consent for communication, unless they specified that they wanted to opt-out. As such, phone numbers provided following a company’s request for contact details or as part of a form were often enough to justify calls and messages. Consumers who had registered to receive email or text promotions via cell phone had also ‘given consent’ under FCC interpretation of the TCPA.

Now, why does it matter if the FCC defines consent so broadly?

The TCPA permits any harmed ‘person or entity’ to bring action to recover costs in the form of statutory penalties of $500 per violation, escalating to $1500 for a willful violation. Because no actual injury needs be proved – just that a call was made by an automated dialer or without consent – proof of lack of ‘consent’ is a major factor in legal cases accusing companies of TCPA violations. And, since the $500 - $1500 penalty applies to each and every text or call, companies can face hefty fines if a court rules against them. Simply put, if the FCC agrees with a business that a consumer consented by simply filling out a form with their contact details, the business can escape the penalties, and continue their marketing practices.

Consent – and how it’s defined – matters. On June 11, 2012, new FCC guidelines , due to begin October 16, 2013, were published. The FCC has now changed its tactics and a new, consumer-friendly interpretation of the TCPA will take effect.

This changes the playing field considerably.

The new rules define ‘express consent’ far more strictly. Signed, written agreements, in which consumers specifically consent to receive calls or messages, will be required. Consent must be unambiguous, following an opt-in approach that reverses the FCC’s previous policy. Consent cannot be a condition of purchase, and when it is given, a specific phone number must be provided, and not auto-filled on a form. The new regulations also remove a previous exemption for having an ‘established business relationship.’ Whereas companies had previously been able to argue that an existing customer was a valid target for marketing, they can no longer use the fact an individual has purchased something as justification for cold calls.

Responsibility for legality will now fall solely on businesses’ shoulders – and consent can only been granted in a clear, written agreement kept on record. This should make most TCPA-violation cases pretty open and shut. If businesses have never sought your agreement to receive calls or messages, they cannot contact you.

These changes will come into effect and be enforceable starting October 16, 2013 – and businesses are strongly advised to begin enacting policies to comply well before this date, or face the consequences.