FCC Makes Important Changes to TCPA Rules

Congress enacted the Telephone Consumer Protection Act in 1991. The law was designed to restrict the activities of telemarketers in making unsolicited calls. The law provides the right for call recipients to file individual lawsuits and collect damages against telemarketers for violations.

Plaintiff attorneys are fans of the TCPA. The statute provides for strict liability. A violation is easy to document, and the statute provides for actual or statutory damages from $500 to $1,500 for each violation. Courts have regularly authorized class action lawsuits, and plaintiff attorneys have reached multi-million dollar settlements, the largest of which is $32.5 million against a major banking institution.

The law provides authority for the Federal Communications Commission to enact rules. The rules adopted by the FCC originally prohibited making telephone calls to cell phones using an automated dialer or pre-recorded message without “prior express consent” of the recipient. The rule applied to both telemarketing calls and non-telemarketing calls such as informational calls. The rule also prohibited telemarketing calls to landlines using a pre-recorded message without prior express consent, but that was not required when a caller had an established business relationship with the call recipient.

Effective October 16, 2013, the FCC amended its rules. Dealers should understand these important changes.

• Prior express written consent is now required for auto-dialed or pre-recorded calls or texts to cell phones.
  
• Prior express written consent is now required for all pre-recorded calls to landlines, but it appears that pre-recorded calls for informational purposes that do not constitute telemarketing or contain advertisements may be made.
  
• The established business relationship exception, which allowed telemarketing calls using a pre-recorded message without prior express consent to landlines, has been eliminated.
  

The consumer must sign the prior express written consent, specifically indicate the business that is permitted to call, and include the telephone number for which the consent is given. The consent must disclose that the consumer is agreeing to receive telemarketing calls that use an automatic telephone dialing system or that are pre-recorded. Significantly, the rules require that the written agreement must be obtained “without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service.”

Why must dealers be concerned? Most dealers do not use pre-recorded messages in telemarketing calls. However, dealer business development centers often use automatic telephone dialing systems to make outgoing business solicitation calls. Some dealers may use pre-recorded messages to advise customers of service appointments or the status of their vehicle in for service.  Although these pre-recorded messages may be made to residential landlines, they may not be made to cell phones under the amended TCPA rules. 

The following chart describes what a dealer may do under the amended rules. If a category is labeled “No”, a call should not be made without prior express written consent.

                        *Businesses must still check and comply with the Do-Not-Call Rule

Today, many people only have cell phones. Therefore, the dealership personnel sometimes may not know whether they are dialing a cell phone or a landline. Because of that, telemarketing calls to cell phones may lead to liability. A dealer may not make a telemarketing call, using an auto dialing system, to a cell phone unless the customer has given prior express written consent.

Under the rules, text messages are subject to the same requirements as calls. Texts that are created by a method other than being manually punched, even when informational, can be problematic. Therefore, a dealer should consider getting prior express written consent for texts as well as for calls.