Telemarketing Is Easier Than You Think
For years, I’ve been having the same conversation about telephone marketing. People say: I know it’s effective, but I don’t think it’s worth the risk. And I can understand where they’re coming from. Unlike an email advertisement, a call or text message doesn’t need to be misleading. For the most part, an unsolicited call or text violates the TCPA. And the threat of a class action lawsuit can be harrowing.
But the truth is that we live in a very different world today than we did even five years ago. Recent FCC rulings and case law have largely done away with consent—as most people understand that term.
In fact, consumers that freely provide their phone numbers are deemed to have provided their consent to be called or messaged. And what’s more—marketers are free to call or text phone numbers provided by third parties. In other words, consent provided to one company is transferable to another.
To understand how we got to this point, I’ve provided some brief history. But if you don’t care about the history, here are the main takeaways:
1. You are free to call or text any phone number that a consumer provides—so long as that consumer doesn’t include an instruction not to contact.
2. If you have no revocation procedure, you just need to respond right away to any reasonable request to revoke consent.
3. If you have a revocation procedure it must be clearly-defined and easy-to-use—or you need to get consent from the recipient to use a different revocation procedure.
4. You can buy or obtain call lists from another company—so long as you can prove that consumers freely provided their phone number to that company.
Interested in knowing more about telephone marketing and TCPA regulation? Email me at [email protected]
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The Telephone Consumer Protection Act (TCPA) was signed into law on December 20, 1991, by President George Bush Sr. Like many consumer protection laws, the TCPA was designed to balance the concerns of consumers and legitimate advertisers. In fact, the law itself recognizes that more than 30,000 businesses at that time engaged in telemarketing, resulting in total sales across the United States of $435 billion.[1] The TCPA’s plain language prohibits advertising calls absent a consumer’s “prior express consent.”[2]
If “prior express consent” means anything, it probably requires a marketer to obtain a recipient’s clear consent before advertising to her by phone. But in truth, Congress never intended a strict interpretation of “prior” consent. The House and Senate Reports that accompany the TCPA state that consent can be communicated orally and almost contemporaneously.[3]
Just one year after the law’s passage, the FCC turned consent on its head—ruling that “persons who knowingly release their phone numbers … absent instructions to the contrary” have consented to be called.[4] In other words, the standard was no longer “express consent”—it was express refusal.
During the 1990s, telemarketing became so rampant that the FTC opened the National Do Not Call Registry. Nevertheless, the FCC continued to stress the importance of “permit[ting] legitimate telemarketing practices.”[5]
The only deviation was in 2012 when the FCC issued an order requiring prior express consent for nearly all advertising calls.[6] The agency offered two justifications for this enhanced requirement. First, it noted that complaints about unwanted calls had not abated since the Do Not Call Registry’s institution.[7] And second, it wanted to make its rules consistent with the FTC’s telemarketing rules.[8] But the order also suggests it was motivated by the widespread proliferation of cell phones and SMS. Faced with a new and unprecedented technology, the FCC had what may be considered a kneejerk reaction.
The courts, however, continued to apply a very lax interpretation of consent—one that was much more akin to that recommended by Congress and by earlier FCC opinions. In Baird v. Sabre, Inc., a customer supplied her cell phone number to Hawaiian Airlines when she booked a flight.[9] The airline then supplied her number to Sabre, a telemarketer advertising travel notification services.[10] Some time later, the customer received a text advertisement from Sabre, and sued Sabre.[11] The Court dismissed the case because merely providing one’s cell phone number constitutes consent—even though the customer had provided her phone number to Hawaiian—not Sabre.[12]
Baird is a lower court case that courts in other jurisdictions have no obligation to follow. But the courts of appeal have reached similar conclusions on opposite sides of the country.
For example, in Murphy v. DCI Biologicals Orlando, LLC, et al., the plaintiff entered his cell phone number on a form when donating blood.[13] The form did not seek consent to advertise or warn about advertisements—it did not even require that one provide a cell phone number.[14] The court still held that the plaintiff had expressly consented to receive autodialed calls and text advertisements.[15]
Consent to call was addressed most recently last year in Van Patten v. Vertical Fitness Group, LLC, another court of appeals decision.[16] In that case, Van Patten had provided his cell phone number to a gym when initiating his membership.[17] He then cancelled his membership.[18] And then—three years after he cancelled—he received texts from a third party encouraging him to reactivate his membership.[19] Like the 11th Circuit Court of Appeals in Murphy, the Ninth Circuit Court of Appeals found that he had consented to receive the texts simply because he had supplied his number to the gym several years earlier.[20]
At the same these cases were decided, the FCC issued another ruling (in 2015) on telephone marketing. This time, the agency took a much more lenient view of consent, emphasizing the importance of “commercial freedoms of speech and trade”[21] and “the legitimate business interests of telemarketers.”
The 2015 Ruling contains 138 pages—though what it says about establishing consent can be distilled into the following:
1. There is no specific method for obtaining consent.[22]
2. Persons who knowingly release their numbers have in effect given their invitation or permission to be called.[23]
3. A caller can obtain consent through an intermediary.[24]
4. While persons can revoke consent, they must “clearly express[]” a desire not to receive further messages in order to revoke consent.[25]
While it claims to merely restate prior FCC opinions, there is no doubt that the 2015 Ruling shifted the landscape further in favor of marketers.
Three things might explain this shift. First, advancements in technology meant that fewer industries were randomly dialing numbers to reach consumers. Instead, they simply wanted to contact individuals who had expressed interest in certain types of products or services. Second, the proliferation of class-action lawsuits raised a concern that plaintiffs’ lawyers were manufacturing claims in order to extract big dollar settlements.[26] And lastly, though it might seem cynical, the makeup of the FCC had changed. In 2012, there were only three commissioners on the FCC—Genachowski, McDowell and Clyburn. Of these, only Clyburn was still serving on the FCC in 2015.
After the 2015 Ruling was issued, a number of telemarketers asked the D.C. Court of Appeals to review and clarify it. And in an opinion released just two weeks ago, [27] the Court of Appeals upheld the FCC’s approach to revocation of consent. It emphasized that callers should use “clearly-defined and easy-to-use opt-out methods.”[28] But it also made clear—and this is important—that “contracting parties can select a particular revocation procedure by mutual agreement.”[29] In other words, companies that wish to advertise via call or text can impose any revocation procedure they want—so long as the person they call agrees to revoke in that manner.
It’s hard to predict how the FCC’s thinking on consent will continue to evolve. But I think the best indicator is the dissenting statement in the 2015 Ruling written by the FCC’s current Chairman, Ajit Pai. In that statement, then-Commissioner Pai takes a very dim view of TCPA litigation and excoriates aspects of the plaintiff’s bar:
Some lawyers go to ridiculous lengths to generate new TCPA business. They have asked family members, friends, and significant others to download calling, voicemail, and texting apps in order to sue the companies behind each app. Others have bought cheap, prepaid wireless phones so they can sue any business that calls them by accident. One man in California even hired staff to log every wrong-number call he received, issue demand letters to purported violators, and negotiate settlements. Only after he was the lead plaintiff in over 600 lawsuits did the courts finally agree that he was a “vexatious litigant.”
The 2015 Ruling is considered omnibus because it addressed 21 petitions for rulemaking, clarification or other action. And it’s unlikely the FCC will soon revisit the scope of TCPA consent. If it does, however, all signs point to increasing favor for marketers.
[1] Telephone Consumer Protection Act of 1991, PL 102–243, December 20, 1991, 105 Stat 2394
[2] 47 U.S.C. § 227(b)(1)(A).
[3] H.R. REP. NO. 317, at 13 (1991); S. REP. NO. 178, at 3 (1991), as reprinted in 1991 U.S.C.C.A.N. 1968, 1971.
[4] 1992 TCPA Order, 7 FCC Rcd at 8769, para. 31. The TCPA gave the Federal Communications Commission (FCC) flexibility to implement different rules for calls made over different media and to different recipients.
[5] FCC Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 68 Fed. Reg. 44144, 44145 (July 25, 2003).
[6] See 47 C.F.R. § 64.1200(a)(2).
[7] Id. at 18.
[8] Id. at 18.
[9] 995 F. Supp. 2d 1100, 1100 (C.D. Cal. 2014).
[10] Id.
[11] Id.
[12] Id. at 1106.
[13] 797 F.3d 1302, 1304 (11th Cir. 2015).
[14] Id. at 1306-07.
[15] Id.
[16] 847 F.3d 1037, 1044 (9th Cir. Jan. 30, 2017).
[17] Id.
[18] Id.
[19] Id.
[20] Id. at 1044-46.
[21] https://www.fcc.gov/document/tcpa-omnibus-declaratory-ruling-and-order at ?? 2, 4.
[22] Id. at ? 49.
[23] Id.
[24] Id.
[25] Id. at ? 63.
[26] Id. at ? 6.
[27] ACA Int’l v. Fed. Commc’ns Comm’n, No. 15-1211, 2018 WL 1352922 (D.C. Cir. Mar. 16, 2018). The decision speaks to a number of issues—and consent is the least of them. The most important aspect of the appellate court opinion addresses which calling devices qualify as automatic telephone dialing systems (ATDS). In recent years, the FCC had expanded the scope of ATDS to arguably include any smartphone. The Court of Appeals found that definition to be “unreasonably, and impermissively, expansive.” Id. at *9.
[28] Id. at *18.
[29] Id.