Record Fines and Restrictive Rules: Agencies Take on the TCPA

August 21, 2023

Recent agency activity — from imposing hefty fines to issuing new rules — demonstrates the FCC and FTC’s continued focus on the Telephone Consumer Protection Act (TCPA) and Telemarketing Sales Rule (TSR), and underscores the importance of ensuring compliance with those laws.

The Federal Communications Commission (FCC) recently issued a record-breaking $300 million fine for a robocall scheme that involved calls placed without the requisite consent and calls to individuals on the National Do Not Call Registry. The FCC also recently proposed rules and the Federal Trade Commission (FTC) issued guidance that would significantly impact how companies address consent and revocation for calls and text messages.

Steep TCPA Penalties Continue: FCC Fines Auto Warranty Robocallers $299 Million

On Aug. 3, 2023, the FCC issued a nearly $300 million fine against an international network of companies for illegal robocalls regarding auto warranties. This was the largest penalty the FCC has ever issued over unwanted calls.

The fine comes on the heels of the FCC’s investigation to cut off the auto warranty robocall scheme that allegedly involved prerecorded voice calls to cell phones, telemarketing calls without written consent and calls to numbers on the National Do Not Call Registry, among other violations of the TCPA. According to the FCC, the scheme involved more than 5 billion robocalls to more than 500 million phone numbers over a period of three months in 2021. In July 2022, the FCC told all U.S.-based voice providers to stop carrying specified traffic related to the auto warranty scam robocalls, an effort that resulted in a 99% drop in the volume of such calls from June 2022 to December 2022.

This record-breaking fine — approved by a unanimous commission — demonstrates the FCC’s ongoing commitment to investigate and penalize violators of the TCPA.

FTC Guidance Limiting Consent Obtained Via Third Parties, Including Lead Generators

In May 2023, the FTC updated its TSR compliance guidance regarding consent for prerecorded telemarketing calls. The TSR prohibits outbound telemarketing calls that deliver a prerecorded message unless the seller has obtained the call recipient’s prior signed, written agreement to receive such calls from the seller. The FTC recently updated its guidance to clarify that the “TSR requires the seller to obtain permission directly from the recipient of the call” and that a “seller cannot rely on third-parties to obtain permission.”

This updated guidance means the FTC does not view consent obtained by lead generators or other third parties as compliant with the TSR. Given that obtaining consent through lead generators and other third parties is common, many businesses may be required to rethink their practices for obtaining consent. It remains to be seen whether courts will uphold the FTC’s guidance.

The FTC is not alone in addressing this industry practice. On April 7, 2023, the FCC’s Further Notice of Proposed Rulemaking requested comments on whether the TCPA should ban the practice of obtaining a single consumer consent as grounds for delivering calls and text messages from multiple marketers. With this heightened scrutiny, now is a good time for businesses to revisit their practices for obtaining consent.

FCC’s Notice of Proposed Rulemaking Addresses Revocation of Consent

On June 9, 2023, the FCC issued a Notice of Proposed Rule Making (NPRM) that could significantly impact revocation of consent under the TCPA.

The FCC proposed amending its regulations to state that consumers may revoke consent through “any reasonable means,” which may include requests made by text message, voice mail or email to any phone number or email address where the consumer can “reasonably expect to reach the caller.” Although the FCC has stated that this rule would merely codify its existing guidance, the rule change may open the door for arguments by plaintiffs that revocation of consent should be viewed more expansively. For instance, it may allow plaintiffs to advance (typically unsuccessful) arguments that texting words other than “STOP” revokes consent for text messages, or that sending a letter to a branch office revokes consent for calls.

In addition, the FCC proposed amending its rules to state that callers must honor company-specific do-not-call and revocation-of-consent requests within 24 hours. The rules currently do not provide a specific time frame for honoring revocation-of-consent requests, and require do-not-call requests to be honored within 30 days for telemarketing calls or exempted artificial and prerecorded voice calls to residential phone numbers. This rule would significantly accelerate the time period in which do-not-call and revocation requests must be honored and may create compliance challenges.

The FCC’s proposed rules also addressed the circumstances when an additional text message may be sent after a person opts out. First, the rules would codify FCC guidance that callers may send a one-time text message confirming a consumer’s opt-out request. Second, the FCC proposed a rule that would allow senders to ask for clarification in that one-time text message regarding the scope of the revocation request (e.g., whether the revocation applies to marketing messages only, or also to informational messages). Senders, however, would be required to stop all further calls and text messages if the consumer did not respond to the clarifying confirmation text message. If this rule is adopted, businesses may want to revisit their opt-out confirmation text messages to determine whether there is an opportunity to seek clarification from consumers regarding which text messages the consumer no longer wants to receive.

This rule is not yet in effect; comments on the proposed rulemaking were recently due on Aug. 14, 2023.

Given the agencies’ new and proposed rules and continued focus on TCPA enforcement, now would be a good time for businesses to revisit their TCPA compliance policies and procedures.