Eric Pritchard is a partner in Kleinbard Bell & Brecker LLP, Philadelphia. The firm focuses on acquisition and succession strategies.
One of the nation’s largest residential security providers recently agreed to settle a large consumer class action lawsuit alleging violations of the Telephone Consumer Protection Act (TCPA) for telemarketing calls made on its behalf using automated dialing equipment—so-called robo-calls.
The class action complaint was filed on behalf of a very large class—persons who, from Jan. 1 2007 to Jan. 30 2012, received either pre-recorded messages, or telemarketing calls to their cell phones. Recent changes by the Federal Communications Commission to its TCPA regulations, imposing stricter consent and opt-out requirements, also make it even harder for companies to know what’s allowed and what isn’t. And mistakes are expensive—the TCPA provides for damages from $500 to $1,500 for each phone call that violate the statute.
For residential phone lines, the TCPA prohibits any telephone call using an artificial or prerecorded voice to deliver a message to a residential phone unless the caller has the prior express consent of, or an established business relationship with, the called party. The law exempts noncommercial (informational) calls or calls made for emergency purposes. For cell phones, the TCPA prohibits calls—including text messages—using an autodialer or an artificial or prerecorded voice unless the caller has the prior “express consent” of the called party. The law exempts emergency calls, but does not exempt calls made for noncommercial (e.g., debt collection) calls. It also does not exempt calls where the caller has an established business relationship with the called party.
The FCC’s recent changes to its regulations tightened opt-out and consent requirements under the TCPA, as well as imposed new restrictions on the number of dropped or abandoned calls permitted. As of Nov. 15 2012, these calls must amount to no more than three percent of all calls per campaign (the old rule allowed three percent over a 30-day period, aggregated over all campaigns).
As of Jan. 14 2013, all prerecorded telemarketing messages must include an automated, interactive mechanism permitting the called party to immediately opt out of receiving calls. The mechanism must be announced at the beginning of the message, be accessible throughout the duration of the call and, when invoked, automatically add the called party’s number to the do-not-call list and immediately end the call. Prerecorded telemarketing messages left on voice mail must include a toll-free number connecting to an automated opt-out mechanism.
Later this year, stricter consent requirements for calls to both cell phones and residential lines go into effect. As of Oct. 16 2013, companies must secure prior express consent in writing from consumers before initiating prerecorded or autodialed telemarketing calls to cell phones. For calls to residential lines, the new regulations eliminate the exemption for established business relationships and add a written consent requirement for telemarketing calls. (No consent is required for informational, emergency or non-telemarketing calls.)
What constitutes an autodialer, whether specific calls are informational or commercial (or a hybrid of the two) and when consumers have—and have not—been given prior express consent have all been litigated with costly results. Don’t let the robots get you in trouble, because they don’t pay, but you will.
Eric Pritchard co-chairs the electronic security group at Kleinbard Bell & Brecker LLP. Pritchard focuses his practice on the electronic security industry with an emphasis on acquisitions. This column does not constitute legal advice; contact an attorney with specific questions.