Most businesses that engage in telemarketing or fax marketing are aware of the Telephone Consumer Protection Act (TCPA), the federal Do Not Call list (and state Do Not Call lists in many states), and the importance of complying with their requirements when marketing their goods or services. But did you know that federal law limits the ways in which almost anyone can place calls or send text messages to residential and wireless telephone numbers even when they are not engaged in marketing? The Federal Communications Commission (FCC) recently issued a Declaratory Ruling clarifying several provisions of the TCPA. Review of the FCC’s order emphasizes the importance, and the difficulty, of complying with this law when using automatic dialing equipment—which may include any smartphone—or artificial or prerecorded voice messages.
What the TCPA Prohibits
In general and subject to limited exemptions, the TCPA and the FCC’s implementing regulations prohibit:
- Making any marketing call to a telephone number included in the national Do Not Call database or to any residential telephone customer who has requested to be placed on the calling party’s do not call list
- Initiating any non-emergency call using an automated telephone dialing system or an artificial or prerecorded voice to (i) any emergency telephone line, (ii) the telephone line of any guest room or patient room of a hospital, health care facility, elderly home or similar establishment, or (iii) any telephone number assigned to a wireless service or any service for which the called party is charged for the call, in each case, without the prior express consent of the called party (which must be written consent if the call is for a marketing purpose)
- Initiating any commercial marketing call to a residential line using an artificial or prerecorded voice without the prior express written consent of the called party
- Sending an unsolicited fax advertisement to anyone with whom the sender does not have an established business relationship or who has requested not to receive fax advertisements from the sender
- Sending any fax advertisement (solicited or unsolicited) to anyone without including on the first page a notice advising the recipient how to opt out of receiving any further fax advertisements from the sender
- Using an automatic telephone dialing system in such a way that two or more lines of a multi-line business are engaged simultaneously
- Disconnecting an unanswered telemarketing call prior to at least 15 seconds or four rings
- Abandoning more than 3% of telemarketing calls that are answered live by a person
- “Spoofing” the Caller ID of any call with the intent to defraud, cause harm, or wrongfully obtain anything of value
- Dialing any telephone number for the purpose of determining whether the line is a fax or voice line
The FCC’s Declaratory Ruling
The focus of the FCC’s recent Declaratory Ruling is on calls to wireless numbers using automated telephone dialing systems or artificial or prerecorded voice messages and calls to residential lines using artificial or prerecorded voice messages, which the FCC referred to collectively as “robocalls.” Alongside the increasing use of wireless phones, robocalls have become pervasive. One source estimates that approximately 1.45 billion robocalls were placed in the United States in December 2015. According to the source, more robocalls were placed to Atlanta residents in December than to residents of any other city, and the Atlanta 404 and 678 area codes were two of the three most robocalled area codes in America. And this count includes only voice calls, not text messages, which are also covered by the TCPA.
Text Messages as Calls
The FCC ruled in 2003 that Short Message Service (SMS) text messages are “calls” for purposes of the TCPA. In its recent order, it clarified that ruling, holding that any text message that is sent to a North American telephone number is a TCPA “call,” even if it originates as an email and is converted to a text message by an intermediate function.
Autodialers – Every Smartphone May Be an Autodialer
The first issue addressed in the FCC’s order, and possibly its most important aspect, is its clarification of what it means to “make a call … using any automated telephone dialing system,” or “ATDS.” The statute defines an ATDS 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.” Citing dictionary definitions, the FCC ruled that the term “capacity” does not refer only to the capability of a device at the time that a call is made, but to the potential capability of using the device to dial stored or produced numbers randomly or in sequence, even if doing so would require the use of additional software or equipment to enable that capability. The only example the FCC provided of a device that can make a telephone call but is not at least potentially an ATDS was a rotary dial telephone. And as long as a device has the “capacity” to be an ATDS, it is irrelevant whether its autodialing function is used for a particular call; a manually dialed call using an ATDS is subject to the same rules as an autodialed call.
Software (“apps”) is available for smartphones that enables them to store telephone numbers and dial them. A dissenting commissioner pointed out that the FCC’s reasoning dictates the conclusion that every smartphone is an ATDS. The majority did not disagree, but only stated that it was not aware of smartphone users being sued by their friends and families or the companies with which they do business for calling them or sending them texts. And because it doesn’t matter whether the autodialing capability of an ATDS is used for a particular call, potentially (and somewhat absurdly) any call or text message using a smartphone to a wireless number requires the prior express consent of the called party.
The FCC also ruled that any Internet-based service that places calls or sends text messages to North American telephone numbers is an ATDS. Whether the user of the service or the service provider is the calling party who must have obtained the consent of the called party depends upon the totality of the circumstances. In most cases the user of the service is considered the calling party, but the service provider may also need the requisite consent if it controls part of the content of the call or text message or chooses some of the recipients.
Consent of the Called Party
The FCC also addressed how a caller may obtain the consent of the called party. Although written consent is required for robocalls that contain or link to advertising or constitute telemarketing, the FCC confirmed that no particular method of consent is required for non-marketing robocalls. In most cases, the fact that someone provides a wireless number as a contact number in connection with a relationship with another party constitutes consent to receive non-marketing robocalls to that number. A robocaller may obtain the consent of called parties through an intermediary, such as the organizer of a group, but the caller is liable for a violation if the intermediary did not actually obtain the consent of a called party. And the fact that someone is listed in the contact database of someone else who has provided consent does not constitute consent to receive robocalls.
Can I Include a Consent Requirement in My Terms of Service?
The FCC also emphasized that a residential or wireless telephone customer cannot be required to consent to receive robocalls as a condition of purchasing goods or services or otherwise doing business with the robocaller. Shortly before the FCC issued its Declaratory Ruling, PayPal revised its User Agreement to state “You consent to receive autodialed or prerecorded calls and text messages from PayPal at any telephone number that you have provided us or that we have otherwise obtained.” The FCC’s Enforcement Bureau sent PayPal a letter advising it that the new User Agreement violated the TCPA. It has also cited other businesses for seeking to impose similar consent requirements as part of their terms of service.
What if the Person Who Provided Consent Changes Phones?
A particular problem for anyone making robocalls to wireless numbers is the difficulty of being certain that the person who consented to receive the calls or texts still has the telephone number to which that consent applies. Some parties argued that the “prior express consent of the called party” should mean the consent of the “intended recipient,” so that consent to receive autodialed or recorded calls to a particular wireless number would remain valid after the wireless number was assigned to a different customer, as long as the caller intended such calls or texts for the customer who had provided the consent. The FCC rejected this argument, ruling that “the ‘called party’ is the subscriber, i.e., the consumer assigned the telephone number dialed and billed for the call, or the non-subscriber customary user of a telephone number included in a family or business calling plan.” Mitigating the basic problem only somewhat, the FCC adopted a “safe harbor” permitting one autodialed or recorded call to a reassigned wireless number as long as the caller had the prior express consent (written consent for marketing) of the previous subscriber or customary user of that number and has no knowledge of the reassignment of the number. Acknowledging that a single call to a reassigned number often will be insufficient to make a caller aware of the reassignment, the FCC said only that it could have interpreted the statute to prohibit even a single autodialed or recorded call to a reassigned number. The FCC also noted that misdialed calls and calls to numbers that were incorrectly entered into a dialing system enjoy no such safe harbor.
The risk associated with autodialed or recorded calls to misdialed or potentially reassigned numbers is enhanced by the FCC’s conclusion that a called party has no good faith obligation to advise the calling party that the number has been reassigned. “[T]he TCPA places no affirmative obligation on a called party to opt out of calls to which he or she never consented.” Even when the content of a call clearly indicates that it is intended for someone else, the FCC’s order almost encourages the called party to wait and sue after receiving several misdirected calls rather than tell the calling party that it has reached a wrong number.
Revocation of Consent
The TCPA provisions concerning fax advertisements include requirements for an opt-out notice and expressly permit someone who has invited or consented to fax advertisements to withdraw consent, but there is no similar provision with respect to autodialed or recorded calls. Some parties and a dissenting commissioner argued that this meant that once consent has been provided for the receipt of robocalls, that consent cannot be revoked. Others argued that the sender should be permitted to establish an exclusive method of revoking consent to receive robocalls, similar to the requirements for withdrawing consent to receive fax advertisements. The FCC rejected both arguments, ruling that residential and wireless customers may revoke their consent to receive robocalls at any time, by “any reasonable means,” including orally. The FCC stated that callers cannot limit in any way the method by which a called party may revoke consent.
The ability of a consumer to revoke consent by any reasonable means raises questions such as whether a national retail chain must honor a “stop robocalling me” request made orally to a cashier at a local store, or a technology company must honor such a request made in the midst of a technical support call. While someone engaged in robocalling cannot limit the methods by which called parties may revoke consent, however, there is no reason that the robocaller cannot publicize one or more simple, readily available ways to revoke consent to receiving its calls, thus potentially reducing the risk of receiving consent revocations by other means and possibly establishing an argument that a method by which someone claims to have revoked consent was unreasonable.
In response to a request by the National Association of Attorneys General, the FCC ruled that there is nothing that prohibits telephone service providers or third parties from offering services that attempt to block robocalls. Any such services must be offered on an opt-in basis with adequate disclosure that they are imperfect and may inadvertently block other calls as well. But the FCC encouraged providers to offer such blocking services and hinted that it could require them to do so in the future. The Federal Trade Commission had previously granted a substantial award to the developer of one such service that works only for customers of some interconnected VoIP providers.
The TCPA authorizes a “person or entity” to sue the calling party for a violation of the robocall or fax advertising prohibitions, authorizes any person who has received more than one call in 12 months from the same entity in violation of the Do Not Call rules to sue that entity, and authorizes states to sue violators of any of the TCPA provisions. The statute provides that private actions may be brought in appropriate state courts and state enforcement actions must be brought in federal courts, but federal courts have held that they also have jurisdiction over private TCPA lawsuits. The plaintiff in a private action may recover the greater of $500 or actual damages for each violation (i.e., each prohibited call or fax), or up to three times that amount if the court determines that the violation was willful, and a state may recover $500 per violation. Some of the FCC’s interpretations of the TCPA are expressly based in part upon the difficulty that a consumer would face in pleading or proving a violation if it interpreted the TCPA differently.
Most private lawsuits for TCPA violations are filed as class actions, and many of them proceed as such, although some courts have ruled that class actions for robocalling violations cannot be certified because of the difficulty of identifying individuals who did not provide prior express consent to receive such calls or texts. Failure to stop robocalling upon request, however, can give rise to substantial liability even without a class action. Yahoo, for example, faces potential liability for damages of over $15,000,000 for sending over 24,000 text messages to a wireless number that had been reassigned to a different customer despite the new customer’s numerous, reasonable requests (including a conference call with representatives of Yahoo and the FCC) that it stop doing so. The trial court in that case initially ruled for Yahoo on the ground that it had not used an ATDS, but the appellate court recently sent the case back for reconsideration based upon the FCC’s ruling concerning what constitutes making a call using an ATDS.
As the FCC repeatedly stated in its order, the TCPA does not prohibit anyone from making any non-marketing call to anyone else without prior consent, as long as the call is not dialed using an ATDS or an artificial or prerecorded voice. And finally, with very limited exceptions, the TCPA expressly permits states to further restrict or prohibit altogether calls that are otherwise permitted by the TCPA.