Mon, 01/22/2018 - 05:33
Telemarketers beware. The TCPA continues as the statute of choice among plaintiffs and class action attorneys. With damages ranging from $500 to $1,500 per violation and telemarketing campaigns generating large call volumes, class action settlements can cost businesses millions. It’s nothing new. Many of the problems that were inherent of the TCPA in 2017 are still with us as we move forward into what we expect to be a better year for businesses and telemarketing in particular.
According to a recent study by the Institute for Legal Reform, between July of 2015 and December 2016, over 3,000 TCPA cases were filed. TCPA litigation has led to increasingly large multi-million dollar settlements. A few recent victims include: Caribbean Cruise Line - $76 Million, Uber - $20 Million, and the Tampa Bay Buccaneers - $19.5 million.
Here are the important issues that the telemarketing industry needs to watch in 2018 which will have the greatest impact on the TCPA and the future of telemarketing.
1. FCC’s TCPA Omnibus Declaratory Order of 2015 Court Decision
Varying court interpretations of provisions in the TCPA have made it increasing difficult for defendants in an anti-business environment. In 2015 the FCC issued an order that attempted to provide guidance to the courts for the application of regulations addressed in TCPA lawsuits. Unfortunately, what it did was cause more confusion which resulted in several businesses filing an appeal to the FCC’s 2015 Order.
At present, TCPA lawsuits are the most frequent type of class action lawsuits. The telemarketing industry anxiously awaits for the court to clarity several key issues of TCPA which include the following:
- Definition of an Autodialer. Under the current FCC definition, a modified smartphone could be considered an autodialer. The FCC needs to recognize the technological gap between reality and the current capabilities of autodialer technology.
- Revocation of Consent. The FCC ruled that consumers can revoke consent at any time and by any reasonable means. The problem is that the courts are left to determine whether a consumer used a reasonable means to revoke consent without any consistent regulatory standards to follow.
- Reassigned Cellphone Numbers. The FCC created the “one-call exemption” which allows businesses to call reassigned numbers once without liability, but only once regardless of whether the call was answered or not. It is an arbitrary rule that leaves businesses exposed to unwarranted TCPA lawsuits.
Though, the United States Court of Appeals heard final arguments back in 2016, the court has yet to issue its ruling. Expect a decision later this year.
2. Third-Party Liability Issues
The courts have held that when a business hires a third-party to make calls or texts on their behalf that the hiring business could be held liable for their actions. In such cases, the telemarketer is considered to be an agent of the company, making the hiring business liable for their TCPA violations.
Most business that conduct telemarketing campaigns hire third-party telemarketing companies to make calls on their behalf. Due to the close nature of the relationship and the possible TCPA lawsuits that it could bring about, it is best for hiring businesses to keep tight rein on their third-party partners. Have a compliance strategy in place before the first call is made. Commit the scope of the relationship in writing and proactively manage their adherence to avoid TCPA violations.
3. FCC Leadership Changes
Chairman Ajit Pai recently assumed leaders of the FCC. Unlike his predecessor, Chairman Tom Wheeler, Mr. Pai has been pro-business. His guidance of the FCC will likely shift it towards a more business-friendly regulatory environment.
“The common thread here is that in practice the TCPA has strayed far from its original purpose
and the FCC has the power to fix that.” – Ajit Pai
In the past, Mr. Pai has been vocal in his opinion of the FCC’s Omnibus Order of 2015. In discussing the “one-call” rule for reassigned phone numbers, he has instead expressed his support of the “expected-recipient approach.” He believes that approach would shield good telemarketers from liability so long as they stop calling as soon as they learn that a number is wrong.
Under Mr. Pai’s leadership of the FCC, expect changes that will attempt to reduce the number of TCPA lawsuits by limiting the reach of the FCC into the courts.
4. FCC Call Blocking
Last year, the FCC announced their approval of new rules that allow phone companies to proactively block calls believed to be illegal robocalls.
The new rules authorize phone companies to block robocalls from telephone numbers that:
- Do not or cannot make outgoing calls such as government numbers that are known to not make any outbound calls
- Reside on a "do not originate" list by the number's subscriber
- Purport to be from invalid numbers, like those with area codes that don't exist, from numbers that have not been assigned to a provider, and from numbers allocated to a provider but not currently in use
In the coming months we should see announcements from the phone companies touting their new robocall blocking applications.
5. VoIP Technology and the TCPA
VoIP technology allows phone calls to be made over the Internet by routing calls to different numbers or to a single cellphone number. The TCPA does not specifically address VoIP because the technology did not exist in 1991 when the TCPA was enacted.
Few courts have addressed the issue of VoIP serviced numbers that are connected to cellphones. The TCPA specifically prohibit autodialed calls and texts to wireless phones without prior consent ("express" for non-marketing and "written" for marketing). Some courts have treated VoIP lines similar to wireless lines under the TCPA and held marketers liable for autodialing VoIP Lines where the recipient was charged for the call.
As VoIP usages becomes increasingly common, the issue is more likely to be addressed by the FCC.
You have read just a few of the problems with the TCPA that need to be addressed if there is to be a better relationship between marketers, consumers, regulators, and the courts. While we don’t expect 2018 will bring final resolution to every problem, some leadership and guidance from the FCC would go a long way. There needs to be an effort to relieve the courts of unnecessary litigation and TCPA class-action profiteers. The focus of TCPA regulatory enforcement should be on intentional violators and not on marketers who make honest mistakes or who are unlucky enough to contact someone looking to profit from a lawsuit.
The best way to avoid becoming the next defendant in a costly TCPA class action is to use services like Wireless IDSM and Litigator Scrub®*. Our compliance services will identify:
- Wireless Data in Real-time
- Wireless vs. Landline numbers prior to dialing
- Reassigned wireless numbers
- Serial class action litigators hidden in your calling data
To learn more about these and other compliance solutions that are perfect for your business, sign up for a complimentary strategy session with one of our team members or contact us at email@example.com or call us at 866-DNC-LIST (362-5478).
*Litigator Scrub® is winner of the 2017 PACE Technovation Award for API Enterprise EditionSM with Litigator Scrub and TCPA Reassigned IDSM.