Class-action risk increases for most companies under the Telephone Consumer Protection Act (“TCPA”) following the July 10, 2015 release of the omnibus Declaratory Ruling and Order (“Order”) by the Federal Communications Commission (“FCC”). For some businesses, the Order also presents opportunities. Here are its key holdings:
Many types of automated calling equipment, including many kinds that are controllable by software, may qualify as an “automatic telephone dialing system,” or “autodialer,” meaning that they generally cannot be used to call or text mobile phones without the called party’s prior express consent (which in some cases must be in a signed writing). Under the Order, virtually any equipment that could be modified to dial “without human intervention” could qualify as an autodialer, including smartphones, even if the equipment is not presently capable of doing so. For example, if your company uses a system to text or dial numbers from a static list (such as a list of your users’ own cell phone numbers) or a rules-based dynamic list (such as a list of users who have requested updates under certain conditions), that system may fall under the Order’s definition of an autodialer, necessitating your compliance with the FCC’s autodialer consent requirements. In the Order, the FCC moves further away from the statutory definition of the covered equipment, which is “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.” Paving the way for more class-action litigation, the Order provides little detail regarding the “human intervention” threshold but makes clear that the FCC intends for the term to be construed on a case-by-case basis in a way that advances the goal of fighting unwanted communications.
App providers that play a minimal role in sending calls/texts for their users are not per se liable for unwanted communications, but other app providers are. To determine whether the app provider should be considered the initiator of the call/text (and thus responsible for obtaining consent) the FCC will look to the totality of the facts and circumstances surrounding the placing of a particular call/text to determine (1) who took the steps necessary to physically place the call/text and (2) whether another person or entity was so involved in placing the call/text as to be deemed to have initiated it, “considering the goals and purposes of the TCPA.” The FCC would consider, for example, whether the app provider controlled the content, timing, or recipients of the calls/texts. The Order provides further detail on this analysis.
Simply being on an acquaintance’s phone contact list does not amount to consent to receive robocalls or texts from third-party applications downloaded by the acquaintance.
Callers are liable for robocalls and texts to reassigned wireless numbers when the current subscriber to or customary user of the number has not consented, subject to a limited, one-call exception for cases in which the caller (or text sender) does not have actual or constructive knowledge of the reassignment. After that, the caller could be liable, even when the caller lacks actual knowledge of the reassignment. The Order identifies measures that businesses can take to avoid unintentionally calling reassigned numbers, and though the FCC recognizes that these measures are not foolproof, it provides no safe harbor for businesses that implement the measures.
Certain marketing-related, one-time “on demand” text messages sent in reply to a consumer request are considered informational instead of telemarketing/advertising and thus do not require “prior express written consent” (e.g., a text-for-coupon program that immediately sends a single SMS containing a coupon in response to a consumer’s texted request for one). To qualify for this exemption, the message must (1) actually be requested by the consumer; (2) be a one-time-only message sent immediately in response to a specific consumer request; and (3) contain only the information requested by the consumer and no other marketing or advertising information. The message still requires prior express consent.
Consumers may revoke consent at any time and through any reasonable means. For example, a business must accept verbal opt-out requests made through its telephone customer service lines and in its brick-and-mortar stores, and it cannot require consumers to text STOP as the sole means of opting-out of text messages.
The FCC grants a grace period for obtaining new opt-ins from certain consumers in accordance with the FCC requirements that took effect October 16, 2013. Under this grace period, if prior to October 16, 2013, you received a consumer’s written opt-in consent to receive text messages or robocalls, but you did so in a manner that does not comply with the “prior express written consent” formalities that took effect on October 16, 2013, you can rely on that consent for that consumer until October 7, 2015. Beginning on October 8, 2015, the older opt-in will no longer be valid for calls/texts that require “prior express written consent” (e.g., autodialed calls/texts or artificial or prerecorded calls to mobile phones, if any of them constitute telemarketing or introduce an advertisement). If prior to October 16, 2013, you did get a consumer’s opt-in consent in a manner that complies with the “prior express written consent” standard that took effect on October 16, 2013, the Order does not affect the continued validity of that consent. Opt-ins received on or after October 16, 2013 remain subject to the new rules.
No consent is required for certain free, “pro-consumer” financial- and healthcare-related messages, such as fraud alerts, doctor appointment reminders and prescription notifications, subject to strict conditions and limitations to protect consumer privacy.
Collect-call service providers can make up to three robocalls without consent to establish a billing relationship under limited circumstances.
The FCC doesn’t prohibit carriers or Voice over Internet Protocol (VoIP) providers from implementing consumer-initiated call-blocking technology that can help consumers stop unwanted robocalls.
Consent is required for Internet-to-phone text messages (e.g., text messages generated by sending an email to firstname.lastname@example.org).
Text messages are “calls” subject to the TCPA (as the FCC previously determined).
The Order is effective immediately. Each Commissioner filed a separate statement:
- Chairman Wheeler Statement
- Commissioner Clyburn Statement
- Commissioner Rosenworcel Statement (dissenting in part)
- Commissioner Pai Statement (dissenting)
- Commissioner O’Rielly Statement (dissenting in part)