The TCPA Requirements FAQ

The federal Telephone Consumer Protection Act (TCPA; 47 U.S.C. § 227) and its implementing regulations (47 C.F.R. § 64.1200) regulate the use of automatic telephone dialing systems (“ATDS”) and artificial or prerecorded voices (“prerecorded messages”) in telephone communications. Generally speaking, the TCPA prohibits using an ATDS or prerecorded message to contact cell phones, and prerecorded telemarketing messages to contact residential phones, unless the recipient has provided and not revoked “consent” to receive the call/text.

This FAQ provides an overview of the TCPA’s requirements.* Because every type of calling campaign raises different concerns and the TCPA is significantly more complicated than can be presented here, Mac Murray & Shuster LLP (M&S) recommends that businesses consult with an experienced ‘ before conducting any type of calling campaign.

What is an ATDS?

An ATDS is “equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers.”^[1]The FCC has held that a predictive dialer also constitutes an ATDS. When determining whether a system is an ATDS, the FCC and courts often focus on whether it has “the capacity to dial numbers without human intervention.” For example, if a representative must click to dial each number, then the system may not be an ATDS because human intervention is required for dialing each number.

In 2015, the FCC held that “the capacity of an auto dialer is not limited to its current configuration but also includes its potential functionalities.” If auto dialing features can be activated or deactivated within the system, or if auto dialing features can be added through software changes or updates, the FCC considers such features as part of the system’s capacity and, therefore, relevant when determining whether the system is an ATDS. The FCC has acknowledged, however, that “there are outer limits to the capacity of equipment to be an [ATDS].” Thus, “there must be more than a theoretical potential that the equipment could be modified to satisfy the [ATDS] definition.”

Although the FCC did not establish a bright line test for what is considered potential capacity (which is relevant to the ATDS determination) and theoretical capacity (which is not), the effort and cost necessary to modify equipment to give it the requisite capacities is relevant when making this determination.^[8]

What consent is required for telemarketing calls?

Telemarketing or advertising calls made using an ATDS require prior express written consent (“PEWC”). Both the FCC and courts have made it clear that these terms are to be construed broadly and that a sale need not occur during the telephone call for it to be a telemarketing call or a call that introduces an advertisement. Likewise, dual-purpose calls (i.e. calls made for both non-solicitation and solicitation purposes) are considered telemarketing calls under the TCPA. If a call is motivated in part by the desire to achieve a future sale, the call is likely to be deemed a telemarketing call regardless of whether the sale takes place during the initial call, a future call, or a subsequent in-person meeting/transaction.

PEWC means an agreement, in writing, bearing the signature of the person called that clearly and conspicuously discloses that the person authorizes the seller to deliver or cause to be delivered telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice to a specified telephone number. Furthermore, the person must be informed they are not required to sign the agreement, or agree to enter into such an agreement, as a condition of purchasing any property, goods, or services.

Although the agreement must be in writing and include the call recipient’s signature, it does not need to be in a particular form or format because the FCC recognized, pursuant to the E-SIGN Act, consent obtained via an “email, Web site form, text message, telephone keypress, or voice recording” is sufficient so long as the other requirements (e.g. mandatory disclosures, identification of the phone number, clear authorization by the person providing consent, etc.) are met.^[9]

What consent is required for non-telemarketing calls?

Non-telemarketing calls/texts to cell phones made using an ATDS require prior express consent (“PEC”). The term “prior express consent” is not defined under the TCPA or FCC regulations, however, in 1992, the FCC addressed the issue of PEC in the context of calling wireless numbers by stating:

Persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary. […] However, if a caller’s number is “captured” by a Caller ID or an ANI device without notice to the residential telephone subscriber, the caller cannot be considered to have given an invitation or permission to receive auto dialer or prerecorded voice message calls.

The FCC’s broad language in discussing the express consent consumers provide by releasing their telephone numbers is important. The FCC could have limited the scope of the express consent to the specific purpose(s) for which the consumer provided his/her number (e.g. to be contacted when an item is ready to be picked up); however, the only limits placed on this method of obtaining PEC were: (1) the call recipient must have provided the number to the business directly or via an intermediary (i.e. capturing it via caller ID or from a third party is not sufficient); (2) there is no express consent if the call recipient provided “instructions to the contrary” (i.e. indicated that he/she doesn’t want to be contacted at that number); (3) the call must be for “normal business communications;”^[11]and (4) the call must be closely related to the purpose for which consent was given. As recently as 2015 the FCC reiterated its PEC standard.

What are special considerations for prerecorded messages?

The TCPA requires that a caller have PEWC before calling a consumer’s wireless or landline number using a PRM for telemarketing purposes.^[12]All telemarketing prerecorded messages must include multiple identity and purpose disclosures, provide a phone number for Do Not Call requests and an automated interactive voice or key-press operated opt-out mechanism. Lastly, while the TCPA may not heavily regulate non-telemarketing prerecorded messages beyond ATDS requirements, several states restrict the use of prerecorded messages and automatic dialing and announcing devices.

Who must comply with Do Not Call laws?

In 2003, the Federal Trade Commission and FCC jointly issued rules that together created the National Do Not Call Registry (“DNC Registry”). Callers are generally prohibited from calling consumer numbers listed on the DNC Registry for telemarketing purposes.

Telemarketers must download and scrub against the DNC Registry at least every 31 days unless an exemption applies.In order to call a consumer on the DNC Registry, the telemarketer must have either (a) PEWC from the consumer or (b) an Established Business Relationship (“EBR”) with the consumer. The term EBR includes business relationships where the consumer has entered into a transaction with the seller within the previous 18 months (“Transactional EBR”) or inquired about the seller’s goods/services within the previous 3 months (“Inquiry EBR”). Federal DNC laws do not apply to business-to-business calls (except the sale of non durable office or cleaning supplies). Individual states may have more restrictive requirements.

Businesses that conduct telemarketing must also maintain an internal company-specific DNC list. In fact, no business may initiate any telemarketing call without having “instituted procedures for maintaining a list of persons who request not to receive telemarketing calls made by or on behalf of that [business].” Those procedures must include, at a minimum, a written DNC policy that complies with legal requirements and training of personnel in the use of the DNC list.

Although the DNC regulations only require that company-specific DNC requests be honored for 5 years, many companies choose to honor the requests indefinitely for customer service purposes. Calls to consumers that previously made a company-specific DNC request are prohibited even if the seller has an EBR with the consumer or the consumer provided PEWC for such calls prior to making a DNC request.

What are the penalties for non-compliance?

The FCC can seek up to $16,000 per violation, but the real penalty for noncompliance comes from private plaintiff class actions. The TCPA permits private individuals who received calls/text in violation to seek up to $500 per communication ($1,500 for willful or knowing violations). In the past several years the number of TCPA cases filed in federal courts has increased dramatically and settlements have reached over $75 million.

I want to initiate a calling campaign. What should I do?

Before conducting a calling or texting campaign, seek the advice of skilled TCPA counsel. The TCPA and other state and federal teleservices regulations form a complicated structure that requires specific knowledge and business acumen to successfully navigate.

*Disclaimer: This article is intended to provide a general overview of a topic area and is not legal advice. If you need legal advice, please contact anMac Murray & Shusterattorney to schedule a consultation.

Josh Stevens is a Senior Associate at Mac Murray & Shuster LLP, focusing his practice on helping clients achieve business goals while understanding and complying with federal and state consumer protection laws. As former in-house counsel, Josh brings a critical client perspective to his legal practice, and has substantial experience in representing clients across a range of proactive and responsive matters, including developing compliance programs, obtaining required licensing, responding to consumer complaints, and negotiating with regulators to bring concerns to resolution. He is accredited as a Customer Engagement Compliance Professional (CECP) through the Professional Association for Customer Engagement (PACE).