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FCC Tightens up SMS and Telemarketing Regulations

The Federal Communications Commission (“FCC”) has significantly amended its regulations under the Telephone Consumer Protection Act (“TCPA”) which governs the use of pre-recorded calls or calls placed with an automated telephone dialing system.  The TCPA places limits on unsolicited pre-recorded telemarketing calls to landline home telephones, and all autodialed or pre-recorded calls to wireless numbers, emergency numbers, and patient rooms at health care facilities.  These calls are known as “robocalls.”

There is no change to the prior consent requirement for robocalls and texts that are not telemarketing.  These include messages regarding school closings or those containing flight information.  Consumers do not have to provide consent for these calls to a landline home phone. However, verbal or written consent is still required for these types of calls or texts made to a wireless number.

Both the Federal Trade Commission (“FTC”) and the FCC have jurisdiction over telemarketing.  The FTC is charged with enforcing the Telemarketing Sales Rule (“TSR”) but lacks jurisdiction over banks, airlines, insurance companies, and intrastate calls.  The FCC’s regulatory authority is derived from the TCPA and extends to all telemarketers.

The good news is that the FCC’s regulatory changes bring the TCPA into alignment with the FTC’s more stringent TSR.  Therefore, with the exception of banks, credit unions, insurance companies, savings and loans, airlines, and common carriers, marketers already in compliance with the TSR may not be required to modify their marketing practices.

When the FCC’s new rules go into effect, they will impose clearer requirements for how marketers must obtain consent before they may make a pre-recorded or autodialed telemarketing call to wireless numbers (voice or text) and residential lines.  The new rules will require that a consumer must first provide written consent to receive such calls or messages.  As with the TSR, consent obtained in compliance with the E-Sign Act will satisfy the requirements of the FCC’s new rule, as long as consent is clear and not conditioned upon the purchase of goods or services.

The TSR already requires telemarketers to obtain signed written consent from consumers before sending robocalls.  However, the FCC’s current rules permit telemarketers not subject to the FTC’s jurisdiction to avoid obtaining written consent if they place pre-recorded telemarketing calls to residential lines when the caller has an established business relationship with the consumer.  Note that the established business relationship exception does not exist for autodialed calls or pre-recorded calls to wireless numbers, and the new rule does not change that.

Consistent with the FTC’s rules, the new FCC rules will eliminate the established business relationship exemption, requiring all telemarketers to obtain prior written consent for robocalls, with the exception of marketers distributing informational calls to landlines or calls made by non-profits and political organizations.  Marketers will no longer be able to rely on an established business relationship when placing pre-recorded telemarketing calls to residential lines.

Also noteworthy is that the FCC requires pre-recorded telemarketing calls to have an automatic opt-out mechanism available during the call.  This new requirement means that consumers will not have to hang up and make a separate call in order to stop further telemarketing robocalls.    The opt-out mechanism must be announced at the beginning of the call and must be available throughout the call. Additionally, when invoked, the opt-out mechanism must immediately disconnect the call and add the consumer to the marketer’s DNC list.  If a call could be answered by a consumer’s answering machine or voicemail service, the marketing call must still also provide an opt-out method the recipient can use after the call is disconnected.

Further, abandoned call limitations must now be measured on a “per-campaign basis.  The FTC and FCC consider a marketing call “abandoned” when the recipient is not connected to a sales representative within two seconds of the call being answered.  Pursuant to the TSR, sellers and telemarketers must ensure that no more than 3% of answered calls are abandoned in “a single calling campaign” or, if a campaign is longer than thirty days, over a thirty-day period (or portion thereof during which the calling campaign continues).

The FCC’s existing rules measure the abandonment rate over a thirty-day period, but currently have no “per-campaign” limitation.  The FCC now adopts the TSR’s rule for measuring the abandonment rate over each calling campaign.

The FCC will exempt from its consent, the identification, time of day, opt-out and abandoned call requirements all pre-recorded heath care related calls to residential lines that are subject to HIPAA.  This is consistent with the FTC’s approach in the TSR, which also exempts pre-recorded calls subject to HIPAA from its restrictions.

The new rules will be implemented on different time schedules after approval by the Office of Management and Budget and publication in the Federal Register.

Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. Consult with an experienced Internet Marketing and Communications Attorney for assistance interpreting the FCC’s new rules.

 

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Richard B. Newman

Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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3 Comments

  1. This is actually very good to see, as we are seeing more and more people using SMS spamming to promote their products and services. There should be some antiquates and regulations while using sms marketing.

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