Transcript FCC Reform of the TCPA

The Telephone Consumer Protection Act:
New Developments and Issues to Watch
Mark W. Brennan, Partner
September 26, 2014
Overview
• Overview of the TCPA
• FCC Developments
• FCC Issues to Watch
• What You Can Do
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Overview of the TCPA
• Congress enacted the TCPA in 1991 specifically to curb
aggressive telemarketing practices:
– Using automatic dialing equipment to make
unsolicited calls to random or sequential telephone
numbers
– Calling sequential telephone numbers in a way that
ties up a block of telephone numbers and creates
public safety risks
– Concerns about telemarketers shifting calling costs to
wireless consumers
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Overview of the TCPA (cont’d)
• Imposes a number of restrictions on telemarketing
calls, faxes, and other outbound communications.
– Some restrictions apply to non-telemarketing calls
– Implemented by the Federal Communications
Commission (“FCC”)
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Overview of the TCPA (cont’d)
Two increasingly problematic provisions:
1) No autodialed or prerecorded or artificial voice calls to
wireless telephone numbers, absent an emergency or
“prior express consent.”
– Applies regardless of content
– The FCC and some courts have determined that this
applies to text or short message service (“SMS”)
messages
– New FCC rules
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Overview of the TCPA (cont’d)
2) No prerecorded or artificial voice calls to residential
telephone numbers without “prior express written consent.”
• Exceptions:
– Not a solicitation or telemarketing
– Not made for a commercial purpose
– Emergency calls
– By or on behalf of a tax-exempt nonprofit organization
– Healthcare calls subject to HIPAA
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Overview of the TCPA (cont’d)
• The TCPA defines an autodialer (“automatic telephone
dialing system”) as “equipment which has the capacity—
– (A) to store or produce telephone numbers to be
called, using a random or sequential number
generator; and
– (B) to dial such numbers.”
• The application of this definition is a key unsettled issue
in today’s TCPA landscape.
• The FCC has taken the position that (at least some)
predictive dialers are autodialers (more on this later).
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Overview of the TCPA (cont’d)
Wireless rules increasingly important, particularly when serving younger Americans.
50
45.4
45
Children with
wireless service only
40
Percentages of adults and
children living in households
with only wireless telephone
service or no telephone
35
Percent
38.0
30
25
Adults with
wireless service only
20
15
10
Adults with no
telephone service
5
Children with no telephone service
0
Jan-Jun
2003
Jan-Jun
2005
Jan-Jun
2007
Jan-Jun
2009
Jan-Jun
2011
Jan-Jun
2013
NOTE: Adults are aged 18 and over; children are under age 18.
SOURCE: CDC/NCHS, National Health Interview Survey.
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Overview of the TCPA (cont’d)
TCPA Violations Can Be Costly
• Minimum statutory damages of $500 per call.
• Statutory damages of $1,500 per call for knowing or
willful violations.
• Class actions allowed, with no cap on damages or
de minimis exception:
– 1,000 calls = at least $500,000, potentially $1.5 million
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Overview of the TCPA (cont’d)
Hogan Lovells has been deeply engaged in this area:
• Cross-practice TCPA Working Group.
• Represent clients in court and before the FCC, Federal
Trade Commission, Congress, and state agencies.
• Secured dismissals and nominal settlements for clients
in TCPA actions.
• Worked with the FCC to clarify TCPA rules.
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FCC Developments
• Recent decisions
– GroupMe
• A consumer’s “prior express consent” may be obtained
through and conveyed by an intermediary
• However, parties remain liable for TCPA violations if, in fact,
intermediaries do not obtain “prior express consent”
• The burden remains on the caller if there is any dispute over
whether consent was obtained
– Cargo Airline Association
• First-of-its-kind exemption
• Free-to-end-user voice calls and text messages for nontelemarketing package delivery notifications
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FCC Developments (cont’d)
• More than 45 parties have filed petitions
asking the FCC to clarify issues:
–
–
–
–
–
–
Autodialer definition
Which party is the “caller”
Disclosure rules
The status of reassigned wireless numbers
Vicarious liability for TCPA violations
Applicability of fax opt-out notice requirements
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Santander Consumer USA
• Filed: July 10, 2014
• Issue: whether and how “prior express consent” for
non-telemarketing calls can be revoked
• Proposals:
– FCC should clarify that “prior express consent” to receive
non-telemarketing calls and texts to cellular phones using
ATDS and/or prerecorded voice messages cannot be
revoked
– If there is a right to revoke, the FCC should confirm that
the caller may designate methods for consumers to
revoke, including in writing, by email, by text message, by
fax, or as prescribed by the FCC
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ACA International
• Filed: Jan. 31, 2014
• Petition for Rulemaking asking the FCC to
– confirm that not all predictive dialers are autodialers;
– confirm that “capacity” under TCPA means present
ability;
– clarify that “prior express consent” attaches to the
debtor, not the specific telephone number supplied by
the debtor when the debt was incurred; and
– establish a safe harbor for autodialed “wrong number”
non-telemarketing calls to wireless phones
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United Healthcare Services, Inc.
• Filed: Jan. 16, 2014
• Issue: liability for calls to reassigned wireless telephone
numbers for which the caller had obtained “prior express
consent”
• Proposals:
– “prior express consent of the called party” encompasses
non-telemarketing, informational calls until the caller learns
that the telephone number has been reassigned
– “called party” encompasses both the consenting party and
the new subscriber to a reassigned number
– good faith exception
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Professional Association for Customer
Engagement
• Filed: Oct. 18, 2013
• Preview dialing and autodialer definition
– An autodialer must have the “capacity to dial
numbers without human intervention”
– The “capacity” of a system means what that
system can do at the time the call is placed,
without additional modification
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FCC Issues to Watch
•
•
•
•
What does “autodialer” mean?
Will there be a TCPA rulemaking?
Will there be more industry-specific exemptions?
What rules will apply to “solicited” fax
advertisements?
• To what extent does the TCPA apply to mobile
device applications, mobile financial services, and
other new technologies and services?
• How will the FCC apply its new “prior express
written consent” requirements?
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What You Can Do
• Assessing your existing data
– What level of consent can you demonstrate?
– Have you obtained additional consents under the new rules?
• Reviewing intake and account forms, calling scripts,
and other consent channels
– Are the disclosures adequate?
– Are the telephone number types specified?
– Is your privacy policy sufficient?
• Analyzing the available opt-out mechanisms
• Reviewing calling policies and manuals
• Preparing training modules for employees
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What You Can Do (cont’d)
• Analyzing vendor agreements for TCPA compliance and
adequate protection (including vicarious liability issues)
• Assessing call monitoring and recording compliance
issues
• Evaluating management of customer number changes
• Ensuring adequate record retention
• Obtaining insurance
• Monitoring TCPA litigation developments and pending
FCC proceedings for filings and decisions of interest
• Aggressively and intelligently defending against TCPA
lawsuits
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Mark Brennan
Partner
[email protected]
T +1 202 637 6409
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