How to Do Telemarketing Without Getting Sued
The Federal Communication Commission's (FCC's) heightened focus on "robocalling" in telemarketing has become fertile ground for class action lawsuits, with many marketers and advertising agencies wary of liability. Under the Telephone Consumer Protection Act of 1991 (TCPA), individuals have had to provide express consent to receive certain types of calls from marketers and have the right to tell companies to stop calling. The FCC set strict requirements in order to prevent consumers from receiving unwanted calls. Violations of the statute can lead to penalties between $500 and $1500 per call.
The TCPA is explicit that no person may initiate a prerecorded or autodialed telephone call to any residential line to deliver a message without the prior express written consent of the called party, unless:
- For emergency purposes
- Not for a commercial purpose
- A commercial purpose but does not include or introduce an advertisement or constitute telemarketing
- Made by, or on behalf of, a tax-exempt nonprofit organization
- Delivers a health care message under HIPAA
The Amended Rules
In 2013, the FCC amended the TCPA rules, making them even more stringent. The FCC sought to further restrict automated telephone dialing system (ATDS) telemarketing calls, primarily by forcing marketers to obtain prior express written consent for any of these types of calls to both wireless numbers and residential landlines. Under the FCC's previous interpretation, consent to such calls could be oral or written, but the FCC recognized that telemarketers could use an ATDS to call a wireless number which a customer had provided as his or her "primary" contact number (without violating the TCPA). Additionally, the FCC eliminated the established business relationship exemption.
Express Prior Written Consent
How does an agency or marketer obtain express prior written consent in order to comply with the amended statute? The FCC's guidelines stipulate that:
- The written agreement must contain clear and conspicuous disclosure informing the consumer that the agreement authorizes a company to initiate telemarketing calls (or texts) using an ATDS or artificial or prerecorded voice.
- The written agreement must identify the specific phone number that the company is authorized to call or text for marketing purposes.
- The written agreement must be signed by the consumer; electronic signatures complying with the E-sign act suffice.
Last year, the ridesharing company Lyft was sued in a class action lawsuit over text messages generated by a mobile application. In advance of requesting a ride, a user must download the application and enter a phone number, as well as invite friends and family to download the application. The plaintiffs claimed that Lyft had violated the TCPA because the texts constituted unsolicited advertisements, since Lyft paid $25 per person referred who downloaded the application.
Walgreens was also recently sued in a class action lawsuit, settling the case for $11 million, after plaintiffs claimed that they had been "robocalled" when the pharmacy used their phone numbers to alert them for prescription refills. This matter truly underscores how hungry plaintiffs' attorneys are leveraging (arguably even exploiting) this statute. Additional lawsuits filed have involved DIRECTV, Toyota, Rite Aid Corp., and sports teams including the Los Angeles Clippers.
What Constitutes "Consent"?
What constitutes consent is a gray area. There are some decisions that would support the finding that a consumer provides "consent" when a reply email includes a cell phone number. The argument is that, by providing a cell phone number, the consumer is consenting to its use for return calls. Still, marketers and agencies should obtain consent from consumers in the following ways:
- Obtain written consent for automated marketing calls
- Always check the "Do Not Call" Registry
- Maintain a record of consent for your company
- Offer an opt-out and make certain that the options are TCPA compliant
Avoiding TCPA Lawsuits
Agencies need to be aware that if they will be using any kind of list, prior express written consent is necessity. Marketers and advertisers should consult attorneys versed in the nuances of the TCPA, telemarketing and online marketing practices to ensure compliance.
Mona Z. Hanna is a Partner in Irvine, CA, and Kristen Peters is a Senior Associate in New York, at Michelman & Robinson, LLP. Ms. Hanna can be reached at email@example.com; Ms. Peters can be reached at firstname.lastname@example.org.