In House - The FindLaw Corporate Counsel Blog

Do You Use Telemarketing or Text Messaging? New Rules to Follow

It just cost Bank of America a record $32 million in a settlement. An Illinois attorney recently was ordered to pay $4.2 million under this law. And other large businesses, such as DirecTV and Dish Network have pending litigation in related matters.

What is it? The Telephone Consumer Protection Act and the FCC's regulations authorized by the statute, violations of which carry a penalty of between $500 and $1,500 per unsolicited call, text, or fax. And next week, starting on October 16, 2013, the rules become even more strict.

Are Your Communications Covered by the Rules?

The new rules cover telemarketing, autodialed, and prerecorded calls, while existing rules target text messages and faxes.

Does your company engage in telemarketing? If the call made to offer or market products or services to consumers, it counts, while purely informational and non-commercial calls, such as severe weather and other emergency alert calls, are not covered by the law, even if they use auto-dialers or recorded messages.

The final rule published in the Federal Register lists other semi-exempt businesses as well, including "debt collection calls, airline notification calls, bank account fraud alerts, school and university notifications, research or survey calls, and wireless usage notifications," not made for purposes of selling goods or services, won't require any consent for landlines, but do require either written or oral consent (under existing rules) for calls to cell phones.

Get Express Written Consent

The final rule states that the prior express written consent must be obtained before making calls to autodialed or prerecorded telemarketing calls to cell phones, while landlines require express written consent for prerecorded calls only.

Your company also cannot make consent a condition to purchasing goods or services. The best practice, to avoid getting sued, is a separate, clear, optional document that may be signed either by hand, or via legally-acceptable electronic means.

Automated Opt-Out Mechanism Required

Get ready to have your company reprogram the autodialers. Even consensual calls will now require a message and automated method to opt-out of future calls, at the beginning of the call.

No More "Established Business Relationship" Defense

Until October 15, you can point to a preexisting business relationship as an out, but as part of the FCC's requirement of express written consent, they are eliminating that particular exception. If you want to make commercial calls using an auto-dialer or a prerecorded message to existing customers, your company will have to obtain express written consent, just as you will for all future customers.

And although this seems economically unfeasible, if your company can staff a call center with live operators, which dial numbers manually, unsolicited telemarketing may still be possible.

Prepare or Pay

As we mentioned before, the penalty is between $500 and $1,500 per communication, and if recent caselaw is any indicator, courts don't seem particularly willing to reduce million-dollar judgments, even when they are draconian.

One poorly-planned campaign could cost your company hundreds of millions of dollars. Help your marketing folks plan accordingly.

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