Have a Phone? Have a Customer? Your Company May Be a Target for TCPA Litigation November 18, 2014
Today’s Presenters Monica S. Desai Amy L. Brown Leader – Class Action & Partner, Communications Multijurisdictional Practice Washington DC Washington DC +1 202 457 7535 +1 202 626 6707 monica.desai@squirepb.com amy.brown@squirepb.com Philip M. Oliss Paul Besozzi Leader – Cleveland Litigation Team Partner, Communications Cleveland, OH Washington DC +1 216 479 8448 +1 202 457 5292 philip.oliss@squirepb.com paul.besozzi@squirepb.com squirepattonboggs.com 2
Background on the TCPA
Telephone Consumer Protection Act (TCPA) The Telephone Consumer Protection Act (TCPA) was enacted in 1991 to stop harassing and unwanted phone calls to consumers. The TCPA imposes restrictions on calls to cellphones using an “automatic telephone dialing system” (ATDS) or artificial or prerecorded voice message, and places certain restrictions on residential calls. The Federal Communications Commission (FCC) is the Federal agency in charge of implementing the TCPA. There has been a sharp increase in the number of lawsuits alleging violations of the TCPA. 1714 TCPA lawsuits filed year-to-date 70% year over year increases in lawsuits Covered entities must be vigilant to avoid liability and manage risk in this environment. squirepattonboggs.com 4
Key Areas of Controversy More than 30 petitions pending at the FCC – clarification and rulemaking requests on a wide range of issues: Calls related to participation in clinical trials Messages related to fraud alerts Clarification re opting into a campaign Whether certain software triggers the TCPA Reassigned numbers KEY ISSUES WE ARE DISCUSSING TODAY What dialing systems are subject to the TCPA? What constitutes prior express consent? squirepattonboggs.com 5
TCPA Statutory Language The TCPA prohibits certain calls made to wireless numbers using an ATDS or an artificial or prerecorded voice. Specifically, it provides: It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States — to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call … 47 U.S.C. § 227(b)(1)(A); 47 C.F.R. § 64.1200(a)(1). squirepattonboggs.com 6
What is an Autodialer Under the TCPA, an ATDS is “equipment which has the capacity – to store or produce telephone numbers to be called, using a random or sequential number generator; AND to dial such numbers.” 47 U.S.C. § 227(a)(1)(emphasis added). The FCC has consistently stated that the basic function of an autodialer is “the capacity to dial numbers without human intervention.” Under the TCPA, it is the calling system’s “capacity” that is relevant to an autodialer determination. However, “capacity” is not defined in the statute, nor in the FCC’s rules. (present vs. future ability). squirepattonboggs.com 7
Key Areas of Controversy What is capacity? Are “predictive dialers” automatically an ATDS under the statute? What about “preview dialers”? squirepattonboggs.com 8
TCPA Statutory Language The TCPA provides a defense to calls made to wireless numbers using an ATDS or an artificial or prerecorded voice, if the call is made with the prior express consent of the called party: It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call. 47 U.S.C. § 227(b)(1)(A); 47 C.F.R. § 64.1200(a)(1). squirepattonboggs.com 9
Who is the “Called Party”? "Called Party" is not defined under the TCPA. In the case of reassigned numbers, this is highly controversial, and hotly litigated. Federal courts have come up with four different interpretations of the term. Four FCC petitions on this issue alone, and numerous comments. squirepattonboggs.com 10
October 30, 2014: FCC Fax Advertisements Order Opt out notices for facsimile advertisements must meet each of the following elements: Located on the first page of the fax advertisement Clear and conspicuous State that the recipient may make a request to the sender not to send any future ads and that failure to comply within 30 days, with such a request is unlawful Contain a domestic contact telephone number and a fax number for the recipient to transmit an opt-out request Six-month window for petitioners to comply (until April 30, 2015). Substantial compliance is not sufficient Other similarly situated parties may seek waivers, and are encouraged to do so by April 15 squirepattonboggs.com 11
Prior Express Written Consent for Telemarketing
TCPA Rules – Prior Express Written Consent Beginning October 16, 2013, the FCC required companies to obtain “ prior express written consent ” before making a telemarketing call to a wireless number using an autodialer or an artificial or prerecorded voice, or to a residential line using an artificial or prerecorded voice. Under these rules, callers will no longer be able to rely on an established business relationship (EBR) to avoid obtaining consent. Note: EBR previously applied to calls to residential lines but had never applied to calls to wireless numbers. squirepattonboggs.com 13
Applicability Wireless and Residential Calls: The new written consent rules apply to wireless and landline telemarketing calls to residential customers. Voice Calls and Text Messages: Because the FCC and certain courts consider text messages to be “calls” under the TCPA, the rules also apply equally to calls and texts. squirepattonboggs.com 14
Exemption for Prerecorded Informational Calls The rules do NOT change requirements for non-telemarketing, informational calls. Purely informational, non-telemarketing calls to residential lines: No consent needed. Purely informational, non-telemarketing calls to wireless lines: Need either prior oral or written consent. Examples of “informational calls”: debt collection calls, airline notification calls, bank account fraud alerts, school and university notifications, research or survey calls, and wireless usage notifications. squirepattonboggs.com 15
COMPLIANCE: Prior Express Written Consent and Other TCPA Requirements
What Does “Prior Express Written Consent” Mean? Required Elements of “Prior Express Written Consent”: There must be a written agreement, Signed by the person receiving the call, With a “ clear and conspicuous disclosure ” of consequences of consent Unambiguously authorizes the seller to make telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice. Includes the telephone number to which the authorization pertains. Notes that the person is not required to sign the agreement as a condition of purchasing any property, goods or services. squirepattonboggs.com 17
What Does “Signed” Mean? The signature on the written consent may be electronic or digital, as well as in ink. For example a person may “sign” the consent via a website form, email, keypad touch, or voice recording. squirepattonboggs.com 18
What Constitutes “Clear and Conspicuous Disclosure?” “Clear and conspicuous disclosure” means a separate and distinguishable notice that a reasonable consumer would see and understand. Features of a “clear and conspicuous disclosure” : the requisite disclosure should be printed in a type size that a consumer can readily notice and understand; it should contrast with the background of the rest of the document; it should not be buried on the back or bottom of the document; and it should not be inserted with unrelated information that a person would think is unimportant to read. squirepattonboggs.com 19
Where Should a Disclosure be Made? All of the information required to establish unambiguous prior express written consent by a person can be disclosed using any method through which you can obtain and keep a record of that consent, e.g., in an online call to action. squirepattonboggs.com 20
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