By J. Bradford Currier, Marc Martin, and Marty Stern
In response to “thousands” of complaints from consumers, the Federal Communications Commission unanimously adopted a Report and Order requiring telemarketers to obtain a person’s prior express written consent before placing a call using an autodialer or artificial/prerecorded voice (a practice known as “robocalling”). The FCC exempted certain “informational” robocalls, such as debt collection inquiries, airline delay information, and fraud detection calls from banks, from the new rules. The new rules are designed to make the FCC’s regulations under the Telephone Consumer Protection Act (“TCPA”) more consistent with the recently amended telemarketing rules issued by the Federal Trade Commission.
The robocalling regulations seek to protect consumers from unwanted telemarketing robocalls in four key ways:
(1) Prior Express Written Consent Requirement
Under the new rules, telemarketers must receive a consumer’s “prior express written consent” before making any robocall to a wireless number or residential line. Before consenting, the consumer must receive a “clear and conspicuous disclosure” of the consequences of providing consent and “unambiguously” agree to receive telemarketing calls at a designated telephone number. Telemarketers may not require robocall consent as a condition of purchasing any good or service. In the event of a dispute concerning consent, the telemarketer will bear the burden of showing that the required disclosure was provided and that it obtained sufficient written consent. Telemarketers may receive the required written consent through an electronic signature in compliance with state law or the federal E-SIGN Act, which allows agreements to be made through email, website form, text message, telephone key press, and other methods. Telemarketers will be required to comply with the written consent requirements within a year of the publication of the federal Office of Management and Budget's approval of the new rules in the Federal Register.
Critically, the FCC carved out a number of exceptions to the express written consent requirement, including for emergency calls, service calls from a customer’s carrier if the customer is not charged, and health-care related calls regulated under the federal Health Insurance Portability and Accountability Act. Additionally, the Report and Order stated that the prior written consent requirement only applies to telemarketing calls and the FCC was “leav[ing] undisturbed the regulatory framework for certain categories of calls.” Specifically, solicitations from tax-exempt charitable organizations, political messages, and school-closing notifications would not require prior express written consent. This exemption for political messages is particularly important in a presidential election year because robocalls are becoming an increasingly common technique by political candidates and parties – there will be no relief this year. In addition, informational calls such as debt collection calls, airline delay notifications, bank account fraud alerts, survey inquiries, and wireless usage warnings to the extent that these communications do not include advertisements or telemarketing messages were also excluded from the new requirements. The informational call exception represented a major victory for a broad cross-section of industry stakeholders, including credit card companies, financial services firms and airlines, who commented that companies should not need to receive prior express written consent before providing critical financial and travel information to consumers.
(2) Eliminating the “Established Business Relationship” Exemption
Under existing FCC rules, telemarketers could normally place robocalls to residential landlines without prior consent when the telemarketer had an “established business relationship” with the consumer, usually based on the consumer’s previous purchases of the telemarketer’s goods or services. The Report and Order eliminated this exception, stating that telemarketers often misused this exemption to send frequent robocalls offering unrelated and unwanted services. The FCC stated that the electronic signature provisions of the new regulations would lessen any new compliance costs caused by the elimination of the established business relationship exception. Additionally, the Report and Order noted that the FTC eliminated the established business relationship exception for telemarketers under its jurisdiction in 2008, meaning that many telemarketers had already adapted their practices to comply with the new regulations.
(3) Establishing an Opt-Out Mechanism
Previously, customers who wished to opt-out of receiving robocalls had to dial a telephone number provided by the telemarketer to register his or her request. Many consumers complained that the call back system was burdensome and ineffective. Under the new regulations, all telemarketing robocalls must provide “an interactive opt-out mechanism” that is announced at the outset of the call and available throughout the recorded message. If the consumer selects the opt-out mechanism, the telemarketer must automatically add the consumer’s number to the telemarketer’s internal “do-not-call” list and immediately disconnect the call. Additionally, if the robocall is received by an answering machine or voicemail service, the message must contain a toll-free number that allows the consumer to call back and connect directly to the opt-out mechanism. The Report and Order did not prescribe a particular opt-out mechanism to be used by telemarketers. Telemarketers will be required to provide an opt-out mechanism within 90 days of the publication of the OMB's approval of the new rules in the Federal Register.
(4) Limiting Abandoned Calls Through Predictive Dialers
Telemarketers often use “predictive dialer” technologies, which initiate the next phone call while the telemarketer is on the phone with another consumer. If the telemarketer is unable to take the subsequent call, the consumer usually experiences a hang-up or “dead air.” The FCC’s rules limit the amount of these abandoned calls and requires telemarketers to employ technologies ensuring that no more than three percent of all calls result in abandonment. However, the FCC’s rules did not include a clear timeframe for measuring the rate of abandoned calls. The revised rules now calculate the abandonment rate during a “single calling campaign” over a 30-day period. The Report and Order adopted the FTC’s definition of calling campaign as “the offer of the same good or service for the same seller,” even if the telemarketer uses different scripts containing different wording in support of the same campaign. The FCC stated that the 30-day period would provide a reasonable assessment of the abandonment rate and would take into account fluctuations caused by time of day, operator availability, and number of phone lines used by the telemarketer. The revised abandonment rate measurement rules will become effective within 30 days of the publication of the OMB's approval of the new rules in the Federal Register. Interested parties will then have an opportunity to file petitions for reconsideration under a timeframe that will be announced by the FCC.