Telemarketing: FCC Order Compounds Risk For Customer Calls

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U.S. businesses continue to face an onslaught of class action litigation arising out of phone calls to their customers. Over a three year period, companies have agreed to pay in excess of $200,000,000 to settle lawsuits brought under the federal Telephone Consumer Protection Act (TCPA). These TCPA lawsuits have not typically involved companies involved in deceptive or fraudulent practices. Rather, the TCPA lawsuits have targeted pharmacies notifying patients that prescriptions are ready, banks alerting customers to account information, and similar legitimate business conduct.

The TCPA sets forth a complex labyrinth of requirements applicable to telephone calls and text messages. These requirements are more demanding for telemarketing calls, meaning calls that concern the commercial availability of goods or services or calls that encourage the purchase of goods or services. Subject to limited exceptions, auto-dialed and prerecorded telemarketing calls to cell phones are prohibited unless the caller has received the prior written approval of the called party to make the call. Prerecorded telemarketing calls to residential lines are similarly prohibited unless prior written approval is obtained, with limited exceptions.

Companies hit with the onslaught of TCPA litigation have typically conducted business in good faith compliance with TCPA requirements. Nonetheless, lawsuits have attacked unknowing and accidental violations. For example, ABC Pharmacy may have on file Jane Doe’s consent to make calls to Jane’s phone number. Jane subsequently moves and her phone number is reassigned to Johnny Rotten. ABC Pharmacy attempts to contact Jane at the phone number on file to provide a prerecorded refill reminder. ABC Pharmacy instead reaches Johnny. Johnny files suit under the TCPA against ABC Pharmacy for unauthorized, prerecorded calls.  

Because of the proliferation of TCPA lawsuits, business groups sought relief from the FCC and filed numerous petitions requesting reasonable guidelines to govern telemarketing calls. Unfortunately, on July 10, 2015, the FCC released a Declaratory Ruling and Order (FCC 15-72) that set forth unrealistic standards and created heightened business exposure to litigation.

“[H]ow could any retail business possibly comply? Would they have to record and review every single conversation between customers and employees? Would a harried cashier at McDonald’s have to be trained in the nuances of customer consent for TCPA purposes? What exactly would constitute revocation in such circumstances? Could a customer simply walk up to a McDonald’s counter, provide his contact information and a summary “I’m not lovin’ it,” and put the onus on the company?”

The FCC Order is currently subject to multiple court challenges. For more information, please contact John Darrow at 312/840-7003 or jdarrow@burkelaw.com 

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