The Telephone Consumer Protection (TCPA Compliance ) Act is the cornerstone of federal regulations on telephone solicitations. It sets restrictions for calling, maintaining Do Not Call lists, and offering automated opt-out options.
Private rights of action under the Telephone Consumer Protection Act allow consumers to pursue seemingly minor and technical violations through legal action, making an understanding of this law critical for businesses hoping to remain compliant.
TCPA Origins
The Telephone Consumer Protection Act (TCPA) limits which phone calls, faxes and texts businesses may send consumers. It also sets limits on automatic dialing systems as well as artificial or prerecorded voice messages used by businesses. Consumers who feel their rights have been violated may file complaints with the Federal Communications Commission.
Congress originally passed the Telephone Consumer Protection Act in 1991 in an effort to preserve “normal, expected or desired communications between businesses and their customers.” Unfortunately, over time this law has become an active source of litigation.
As one example, the TCPA’s prohibition of calling equipment that automatically or sequentially dials numbers was originally interpreted to exclude preset lists of telephone numbers used by autodialers; however, later the Federal Communications Commission (FCC) decided that such equipment falls within its statute, leading to an upsurge in litigation brought under TCPA claims due to cell phones becoming the dominant form of communication.
Courts have also broadened the TCPA’s scope to encompass certain valuable, expected interactions between businesses and their customers, such as order confirmations, shipping/delivery status updates, prescription refill notifications, appointment reminders, security alerts, customer surveys, loyalty program notifications and employment communications. Furthermore, corporate officers may now face personal liability for violating this act; thus increasing risks to small businesses while potentially impeding communication capabilities between themselves and consumers. These developments increase risks significantly while potentially having adverse impacts on communication abilities between them and consumers.
TCPA Exemptions
The Telephone Consumer Protection Act was originally intended to limit unwanted telemarketing calls and faxes; however, since its passage into law in 1991 it has been used broadly to include communications that should have been expected between businesses and customers, such as order confirmations, shipping status updates, prescription refill notifications, appointment reminders, security alerts alerts customer surveys employment communications collections calls loyalty program communications etc.
At the core of many Telephone Consumer Protection Act lawsuits is defining an ATDS (automatic telephone dialing system). Courts have differing views as to whether this definition only encompasses equipment that randomly or sequentially generates numbers, or includes automated systems using pre-set lists of phone numbers as part of its scope.
FCC Order addresses this issue head on and establishes that utility companies may presume consumers who provide their wireless or landline residential telephone number have provided prior express consent for certain prerecorded voice and text messages pertaining to utility service that “closely relate” to them. This narrowly tailored relief balances core consumer protections of the Telephone Consumer Protection Act with important informational calls being preserved for customers.
Mayer Brown offers expert TCPA attorneys who can guide your company through its complex rules to avoid liability risks associated with the Telephone Consumer Protection Act of 1991 (TCPA). Reach out now for guidance and representation!
TCPA Compliance Penalties
Since its passage, the Telephone Consumer Protection Act (TCPA) has become one of the most litigated consumer protection laws. Plaintiff attorneys often leverage this uncapped statutory damages scheme to secure massive settlements and verdicts against businesses who violated it; furthermore, its per-violation penalty structure and long statutory lookback period make the TCPA particularly punitive law.
However, some of the largest verdicts for violations of the Telephone Consumer Protection Act (TCPA) often involve triple damages; one example was when a satellite TV provider was ordered to pay $61 million for violating ATDS regulations of TCPA. Many cases arise due to unclear laws; for instance the requirement of prior express written consent can often be misunderstood and lead to accidental violations; inaccurate marketing lists also often lead to violations due to misguided guidance from third-parties or internal data inaccuracies resulting in multiple violations with associated fines attached TCPA fines TCPA violations leading to multiple violations and expensive fines.
In addition to financial penalties, violations of the Trade Competition and Protection Act can cause irreparable harm and result in lost market share for companies. Legal defense costs and time required to address violations divert resources away from core activities that need attention, hindering productivity and innovation. Negative perceptions associated with TCPA violations often remain long after cases have been resolved and cause irreparable harm that costs companies dearly in lost market share.
TCPA Compliance
Companies violating Telephone Consumer Protection Act regulations risk incurring costly fines and class action lawsuits that not only damage financially but also damage brand reputation. Businesses should take great care to remain compliant with TCPA rules as laws change; compliance requires constant vigilance. Furthermore, organizations may want to consult legal advice as changes occur so as to shape their compliance policies accordingly.
Courts have increasingly applied the Telephone Consumer Protection Act (TCPA) broadly, including to expected communications between businesses and consumers such as order confirmations, shipping/delivery status updates, prescription refill reminders, appointment notifications, security alerts, customer surveys, loyalty program communications, employment communications, collections calls and promotional messages. Furthermore, its private right of action and uncapped statutory damages has provided plaintiff lawyers with incentive to pursue technical violations without evidence of actual injury to businesses.
Businesses should make TCPA compliance a top priority to maintain strong consumer relationships and avoid costly penalties and reputational damage by showing respect for consumer privacy and contact preferences. Furthermore, an omnichannel contact center helps businesses establish trust by offering consistent information across channels.
