Posted on November 8, 2011 by Mark Brennan

FCC Proposes $2.96 Million Forfeiture for TCPA Violations

The Federal Communications Commission (FCC) has released a Notice of Apparent Liability for Forfeiture (NAL) against Travel Club Marketing, Inc. (Travel Club) in the amount of $2.96 Million for apparent violations of the Telephone Consumer Protection Act (TCPA) and related FCC rules regarding the delivery of prerecorded messages, as well as its Caller ID rules.  This enforcement action serves as a reminder to companies placing autodialed calls or delivering prerecorded messages to ensure that such calls and messages comply with the TCPA and the FCC's rules.

In the NAL, the FCC found that Travel Club had apparently violated the TCPA and the FCC’s TCPA rules by delivering 144 unsolicited, prerecorded messages to 113 cellular telephone numbers.  Under the TCPA and the FCC’s implementing rules, the delivery of prerecorded messages to wireless telephone numbers is prohibited (absent an emergency) unless the caller has obtained “prior express consent” from the called party.  The FCC also found that Travel Club apparently violated the TCPA and related FCC rules by delivering 41 unsolicited, prerecorded advertising messages to the residential telephone lines (e.g., landlines) of 29 consumers.  The calls did not qualify for any of the exemptions to the TCPA restriction against the delivery of prerecorded calls to residential telephone lines.  

In addition, the FCC found in the NAL that Travel Club apparently violated section 64.1601(e) of the FCC’s rules, which requires that telemarketers transmit certain Caller ID information, including information that enables consumers to make do-not-call requests during regular business hours.

The FCC imposed the maximum penalty of $16,000 per call for each of Travel Club’s 185 apparent violations, for a total proposed forfeiture of $2,960,000.  Although the FCC has previously considered $4,500 per message to be an appropriate base amount for delivering an unsolicited, prerecorded message, it noted that it was imposing the maximum penalty because of the number of Travel Club’s “apparent willful, repeated violations” and its “apparent deceptive and evasive conduct.” 

Again, companies should ensure that their calling practices comply with the TCPA and the FCC’s rules, as well as FTC and state requirements.  Otherwise, they risk not only class action litigation, but also potential regulatory enforcement fines that are imposed on a per-call basis.
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Posted on September 27, 2011 by Mark Brennan

New TCPA Reform Bill Introduced in House

Representatives Terry (R-NE) and Towns (D-NY) have introduced legislation intended to modernize the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”) and authorize additional calls to wireless telephone numbers.

The Mobile Informational Call Act of 2011 (H.R. 3035) would revise the TCPA to, inter alia, exempt informational calls (i.e., non-telemarketing calls) from the TCPA’s current restriction on autodialed or artificial/prerecorded calls to wireless telephone numbers. Specifically, it would exempt informational calls made for a commercial purpose, as long as they do not include a solicitation. The bill would continue to restrict autodialed or artificial/prerecorded telemarketing calls to wireless numbers and require prior express consent for such calls, although it would make clear that a person who provides a telephone number as a means of contact evidences prior express consent. 

As currently drafted, the bill does not include a retroactivity provision or other language that would mitigate the potential exposure of companies for prior TCPA violations.

The bill would also narrow the definition of “automatic telephone dialing system” to provide more flexibility for companies to use predictive dialers and other technologies that do not use a random or sequential number generator to produce and dial telephone numbers.

 
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Posted on December 11, 2010 by Mark Brennan

FTC Seeks Comment on Strengthening the Caller ID Provisions of its Telemarketing Sales Rule

On December 7, the Federal Trade Commission (FTC) released an Advance Notice of Proposed Rulemaking (ANPR) seeking comment on how to address telemarketing practices designed to circumvent existing Caller ID rules, and how to make Caller ID a more useful tool for screening unwanted calls. 

The FTC’s Telemarketing Sales Rule (TSR) currently requires telemarketers to provide consumers who use Caller ID services with either the telemarketer’s telephone number or the number of the seller or charitable organization represented by the telemarketer. These rules are designed to encourage accountability and enable the FTC and law enforcement agencies to identify improper telemarketing practices (e.g., calling numbers from the Do Not Call registry). The FTC has initiated numerous enforcement actions in recent years, charging telemarketers with concealing their identities from consumers by using advanced technologies to block, “spoof,” or manipulate the names and numbers that appear on Caller ID. 

The ANPR seeks comments on a number of Caller ID issues, including:

  • How widespread is consumer use of Caller ID services?
  • Do consumers use other services, such as call-blocking equipment, to avoid unwanted calls?
  • Would changes to the TSR improve the ability of Caller ID or other services to disclose the source of telemarketing calls or otherwise block calls?
  • Should the Caller ID provisions recognize or anticipate certain developments in telecommunications technologies related to the transmission and use of Caller ID information? 
  • Should the Caller ID provisions specify the characteristics of the phone number that a telemarketer must transmit to a Caller ID service? For example, the FTC could require that the phone number transmitted be one that is listed in publicly available phone directories, be one with an area code and prefix that are associated with the physical location of the telemarketer’s place of business, be one that is answered by a live representative, or be such that an automated service can identify the telemarketer by name.
  • Should the Caller ID provisions allow the use of trade names or product names (instead of the actual name of the seller or telemarketer) in Caller ID displays?
  • Should the FTC further harmonize its Caller ID provisions with the regulations promulgated by the FCC pursuant to the Telephone Consumer Protection Act? 

Comments on the ANPR are due on or before January 28, 2011.

(A special thanks to Aaron George for his assistance in preparing this entry.)

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Posted on June 17, 2010 by Mark Brennan

New FCC Proceeding Seeks Comment on Potential Exemptions to Telemarketing, Autodialer, and Prerecorded Message Restrictions

The Federal Communications Commission (FCC) issued a Public Notice seeking comment on a Petition for Expedited Clarification and Declaratory Ruling (Petition) filed by Global Tel*Link Corporation (Global Tel) regarding its outbound calling practices.  The Petition raises several key issues under the Telephone Consumer Protection Act (TCPA) and related FCC rules, including whether certain calls (e.g., non-telemarketing calls) should be exempt from some of the TCPA’s restrictions on the use of prerecorded messages and autodialers.  Given the broad applicability of the TCPA and the FCC’s rules, this new proceeding could affect any company that places calls using prerecorded messages or autodialers.

The TCPA and the FCC’s rules prohibit, among other things, the use of automatic telephone dialing systems (“autodialers”) or artificial or prerecorded messages when calling, inter alia, telephone numbers assigned to wireless services, absent an emergency or the “prior express consent” of the called party.  Of note, the restriction against placing these calls to mobile phones without prior express consent applies regardless of whether the call is a “telemarketing” call.  The TCPA and the FCC’s rules also make it unlawful to place a non-emergency telephone call to a residential line “using an artificial or prerecorded voice” without the recipient’s “prior express consent” (although there are some exceptions).   

As described in the Petition, Global Tel provides outbound calling services for prison inmates.  For certain outbound calls (e.g., some calls from inmates to mobile phone numbers), Global Tel sets up a billing arrangement with the called party before connecting the called party to the inmate.  For example, when the inmate places a call, Global Tel initiates an “automated interactive voice response notification” to:

  • inform the called party that an inmate is trying to make contact;
  • get consent for the call; and
  • establish the billing arrangement. 

Global Tel then puts the call through. 

Concerned that these inmate calls could expose the company to liability under the TCPA and the FCC’s rules, Global Tel has asked the FCC to exempt the calls from TCPA enforcement.  For example, Global Tel argues that the calls to landline phones serve no commercial purpose, are not an unsolicited advertisement, and include an opt-out mechanism so that called parties can avoid future calls.  Regarding calls to mobile telephone numbers, Global Tel argues, among other things, that it can be presumed that the inmate has dialed a cell phone number because that is the number at which the called party wishes to be reached.  Moreover, the called party may have only a wireless phone (and not a landline phone).  Separately, Global Tel argues that its calls do not involve the use of an autodialer or predictive dialer.

Although the Petition is focused on Global Tel’s situation, the FCC’s decision in this proceeding could affect many companies that rely on the use of prerecorded messages or autodialers as part of their communications strategy.  Nonetheless, the FCC has established a very short comment period for this item – comments will be due just 15 days after the item appears in the Federal Register, and replies are due 25 days after the item appears in the Federal Register.

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