Telephone Consumer Protection Act: Risk Management For Your Business

This entry was posted on Friday, March 12th, 2021 and is filed under Consumer Protection, Corporate Law, Employment Law.
Q&A with KVK partner GianDominic Vitiello

In 1991, the Telephone Consumer Protection Act (TCPA) was enacted into law. The TCPA restricts telemarketing calls and the use of automatic telephone dialing systems for marketing and solicitations. Steep penalties flow from TCPA violations: $500 per call or text or up to $1500 per call or text if the transmission is deemed willful (or actual damages, if greater). The TCPA is a legal quagmire for every business and it is the duty of any company placing phone calls or sending text message marketing campaigns to be fully informed on TCPA exposure. This article includes some frequently asked questions as conveyed by KVK partner and litigator GianDominic Vitiello during a recent interview.  

The Trend

“Cannabis retailers are receiving demand letters alleging the receipt of unsolicited text messages and related violations of the TCPA.  Many will turn into class action lawsuits.”

GIANDOMINIC VITIELLO

Q – “Is my marketing company responsible for the liability of the text message marketing service?”

A – “This is a question that I receive often. Everyone seems to think ‘well, I’m not the one who sends the text messages. I pay someone to do that. they should be responsible, right?’ Wrong. Liability will flow to a party directly for making the call, or vicariously through an agency relationship. One of the cases that stands for that rule is Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014). In other words, allowing someone to send a text on your behalf still leaves you in the crosshairs. You are responsible and can be held liable.”

“But there are ways of managing this risk, right? I think it starts with having a strong agreement with your marketing vendor. Many businesses that lack a high degree of corporate sophistication enter into agreements with vendors for web or marketing services far too whimsically. You need to have your lawyer review these agreements before you sign them. Why? Because your vendor had a lawyer prepare the agreement in the first place and buried within it is a clause that says that you are ultimately responsible for TCPA violations. I see agreements with representations and warranties regarding the phone numbers in a retail dispensary’s entire patient list. They’ll say things like ‘you represent and warrant that every phone number that you provide to us for marketing has been scrubbed against the Do Not Call List and that you have express written consents on file for every number on this list, and so on.’ Too many operators are signing agreements like this without reading this fine print. ”

“Other risk management tools include indemnity provisions that shift the responsibility and cost of defense onto the vendor. These clauses must be negotiated and included in your written vendor agreement in order to be enforceable. The punchline is that you have to read these agreements, ask questions, and consult with a lawyer on the risks and how to manage them.”

The Laws

Q – “Are there any upcoming events in 2021 to track in order to stay informed about the TCPA?”

A – “Actually, yes. There are some events to track in 2021. Historically, the TCPA has been a sort of popular law. People think it protects them from robocalls and telemarketing so it is tough to envision much reform. ”

“One of the historic pain points for defendants in TCPA matters is the uncertainty surrounding what constitutes an ‘autodialer’ or ATDS. Facebook Inc. v. Duguid was argued on December 8, 2020 and is now pending a decision with the Supreme Court. A decision is expected, though not guaranteed, before the end of the term in June 2021.”

“Under the TCPA, it is “unlawful for any person … to make any call (other than a call made for emergency purposes or made with the express prior consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice … to any … cellular telephone.” 47 U.S.C. § 227(b)(1)(A)(iii). But what is that system, really? Don’t we live in an age where every phone has some automatic dialing capability? After all, when I call my mom, I click her picture. I don’t call her number.”

Facebook Inc. v. Duguid might resolve that question and establish a bright line for what constitutes an autodialer.”

“Another pain point is re-assigned phone numbers or unique instances where consent to receive a marketing message was provided but later withdrawn. These fact patterns are particularly frustrating for companies because there are sometimes no ways for them to track whether a phone number is re-assigned or whether consent needs to be re-sought. I mean, how would you go about determining whether your customer from last year has changed phone numbers. You’d probably call or message them. Well, if that number has been reassigned to someone who has not consented, your inquiry text might be a violation of the TCPA.”

“The Federal Communications Commission Registry of Reassigned Numbers will assist with that. This is a project that was announced at the end of 2018 and is only now set to start registering reassigned numbers on April 15, 2021. The result will be a list that you can scrub your numbers against, similar to the Do Not Call List.”

Manage Risk

Q – “We allow people to opt out of our marketing campaigns, isn’t that enough?”

A – “No. No. No. This is one of those questions that scares me with how often it is asked. You must receive express written consent to send mass text campaigns. This can be done in a number of non-disruptive ways. For example, on the web you can have consent forms, opt in sections, terms of use, etc. In the store you can have consent forms available or iPads with digital consents. Focus on opting-in, not opting-out.”

Q – Can I rely on the Do Not Call Registry?”

A – “No, not for full compliance. Not even close. The Do Not Call Registry is a tool but it is not the end of the story. I definitely recommend scrubbing against the Do Not Call List. It is one part of a more holistic compliance policy. Check out other lists that you can scrub against. Seek written consents, implement some basic safeguards like pulling old phone numbers out of your system after a period of inactivity, there are many little things you can do depending on the business.”

To discuss your exposure, a demand letter, or for assistance with your vendor agreements, please reach Katchko, Vitiello & Karikomi, PC at info@kvklawyers.com.