Using Text Messages in Promotions and Contests? – $8,500,000 Settlement Provides Reminder to Make Sure You are Aware of TCPA Obligations

In the last few days, the trade press has been full of stories about a settlement of a lawsuit brought against a large broadcaster for alleged violations of the Telephone Consumer Protection Act (“TCPA”). Given that the settlement was for $8.5 million, it has commanded lots of attention. While much of this attention seems to suggest that this is a new obligation, we wrote about this issue last year, warning broadcasters of the potential for big liability if they did not pay attention to the requirements of the rules. The rules prohibit “telemarketing” calls or texts using an “autodialer” unless the recipient has explicitly consented to receive such messages.  In the recent decision, the broadcaster allegedly responded to texts sent to enter a contest with reply texts containing advertising messages unrelated to the contest. 

While TCPA rules are written by the FCC, this is one of those few rules where a violation can not only bring penalties from the FCC, but also there is a “private right of action” by people who receive unwanted calls or texts – i.e. they can sue a broadcaster who contacts them in a manner that violates the act.   And there are law firms that specialize in this litigation, even putting together groups of plaintiffs to bring actions against alleged violators – seeking damages including statutory damages (meaning that no real injury needs to be proven).  So just what does the TCPA cover? Here is what Josh Bercu, an attorney in my firm, wrote last August:

The TCPA is a law that restricts businesses and organizations from making calls and texts to consumers’ residential and wireless phones without having first received very specific permission from the recipient. Sending texts to broadcast station viewers or listeners who are contained in a station’s loyal listener or loyal viewer clubs can lead to liability if the proper releases are not obtained, and collecting text addresses from contest participants and adding them to station databases can similarly be problematic.   Because violations of the TCPA can result in civil liability of $500 to $1500 per call or text plus FCC fines, and as there have been a number of law firms around the country that have been active in filing class action suits against businesses to collect those potentially very high per-call damages, broadcasters need to ensure that their practices comply with the TCPA and the FCC’s rules which implement the Act.  While the recent Order provided some specific relief in limited circumstances to businesses, it leaves many well-intentioned companies, including broadcasters, at risk as they try to contact their viewers and listeners. Below we address some commonly asked questions about how the TCPA may apply to broadcasters.

The TCPA applies to text messages as well as phone calls.   The TCPA applies to both telemarketing and non-telemarketing calls and text messages. The TCPA and FCC rules require that callers obtain prior express written consent to make a telemarketing call using an “autodialer” or prerecorded message. The TCPA and FCC rules also require prior express consent (oral or written) for all non-telemarketing calls (and text messages) made to wireless numbers using an “autodialer” or prerecorded message. (Non-telemarketing calls using an “autodialer” or prerecorded message to residential lines, e.g. calls from charities or political campaigns, do not require prior express consent.) The Order makes clear that these restrictions also apply to texts that originate with an online interaction with a website or app, and end up with a text being sent to a consumer.

An “autodialer” includes most automated response technologies.   The Order reaffirms a very broad definition of “autodialer” that sweeps in most calling and text messaging equipment. According to the FCC, an “autodialer” is dialing equipment that generally has the capacity to store or produce, and dial random or sequential numbers, even if such equipment is not presently used for that purpose or requires some modification to do so. Unless you are manually dialing numbers, your dialing equipment may very well be an autodialer. Sending the same text to all the text numbers stored in a station’s database, unless done manually, is also likely the use of an “autodialer.”

The burden is on the broadcaster to establish that appropriate consent was obtained before a call or message. For non-telemarketing calls and text messages to wireless numbers, the consent can be oral or written, and there are no specific requirements for what the consent must say. In fact, in certain circumstances, a consumer providing you his or her wireless number may indicate consent. However, the burden is on the broadcaster to prove it had consent to make the call or send the message in the event a consumer complains. So, it is safest if, when you gather telephone numbers with the intent of using them for station marketing purposes, you make explicit what kinds of messages that you can send to people who have provided their numbers.

For telemarketing messages, under a new rule that became effective October 16, 2013, to obtain valid prior express written consent, at the time that you seek consent, you must disclose that that consent is not a condition of any transaction that is being done and that, by providing their consent, the consumer is acknowledging that they may receive telemarketing calls done with autodialer equipment.   Again, the burden is on you to prove that you had prior express written consent if a consumer complains.

Consent that you received in the past may not still be valid. All consents, even those that were obtained prior to the adoption of the current rules, must satisfy the disclosure requirements of the new rule. If you plan to keep making and sending telemarketing calls and texts to consumers, make sure to obtain new written consents that satisfy the disclosure requirements.

Even getting consent does not eliminate all worries. The Order sets up two challenges for even the most well-intentioned broadcaster. First, the Order concludes that consumers can revoke their consent using any reasonable method, including orally or in writing. A consumer-initiated call or direct response to a text saying that they want to be removed from a database would likely be deemed be a “reasonable method” of revoking consent, as likely would a note on a website’s “Contact Us” form. Therefore, broadcasters should establish internal mechanisms to ensure that a point person is responsible for removing viewers and listeners from the relevant database when they revoke consent.

Second, the Order clarifies that the TCPA requires the consent of the current subscriber or customary user of the phone, not the intended recipient of the call. Therefore, a broadcaster may incur liability for making calls to reassigned wireless numbers, even if the broadcaster reasonably believed that valid consent had been obtained.   So if a listener or viewer changes their mobile number, and that number is reassigned to someone else, you have to remove the number from your database. The Order allows you one call before liability attaches – even if you do not reach a person, answering machine, or voicemail – to a reassigned number, if you can demonstrate that you did not have knowledge of the reassignment and that you had a reasonable basis to believe you had valid consent to make the call. After that one call, you may be liable for each additional call. The one-call forgiveness does not apply to numbers that are entered incorrectly to a dialing system, however. Therefore, if there was a typo in entering the number into the database, that needs to be corrected. Seemingly, perfection is required on the entry of numbers into any database to be used for commercial texts of autodialed calls.

Direct response texts are allowed, but only if they meet certain conditions.  The Order permits a one-time text message, so long as it is (1) requested by the consumer; (2) is a one-time only message sent immediately in response to a specific consumer request; and (3) contains only the information requested by the consumer with no other marketing or advertising information. This clarification may help broadcasters send texts in response, for instance, to a listener who is trying to win a contest (where entries are made by text) to simply and immediately say whether or not the listener won. But the responsive text could not contain advertising material, nor could the number be saved for future use in a marketing campaign without the explicit consent of the listener.

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Obviously, the TCPA can pose many issues for broadcasters who use text messages to contact their listeners. And, given the ambiguities in the new rules, carefully following these rules should reduce, but may not totally eliminate, any risk of legal actions. The text above identified just some of the pitfalls and issues that arise under the law and the FCC’s rules that have been adopted to implement the Act. So broadcasters need to work with counsel to develop strategies to remain in compliance with these rules – to minimize litigation risks and to avoid potentially big liability.