On July 24, 2019, the House of Representatives unanimously passed the Stopping Bad Robocalls Act (the "Act") by a vote of 429 to 3. The measure, which was originally introduced by Congressman Frank Pallone, Jr. (D-NJ), is crafted to modernize telemarketing restrictions and the use of automated telephone equipment as codified under the Telephone Consumer Protection Act ("TCPA"). The proposed Act will now move on to the Senate for committee conference.
Why is there a need for the new TCPA law?
Proposed Changes to TCPA Law
It should come as no surprise to companies operating in the advertising/marketing/lead generation space that consumers are fed up with unwanted telemarketing calls. In fact, in 2018, the Federal Communications Commission ("FCC") received 232,000 complaints of unsolicited telemarketing calls, an increase of more than 34 percent since 2015. But this statistic may be a bit misleading because, as telemarketers point out, consumers unfortunately often forget that they provided consent to be contacted by telephone before calling foul. Due, in part, to this overreaction, the Act will continue to burden those legitimate companies that call consumers with consent, without fixing any of the problems created by the TCPA.
The proposed new TCPA law will apply to telephone calls and SMS text messages alike and define "called party" to mean the subscriber or customary user of the telephone number. In addition, the Act will:
- require the FCC to report its progress to Congress on the implementation of the reassigned number database;
- direct the FCC to draft regulations that clarify the definition of "automatic telephone dialing system" ("ATDS") within the meaning of the TCPA;
- impose limitations on the scope of the FCC's TCPA law exemptions;
- require the FCC to adopt regulations to ensure that consumers can withdraw consent for calls and text messages sent via an ATDS, or through use of artificial or prerecorded voice;
- require providers of voice services to implement caller authentication technology that is free to consumers;
- with respect to call blocking technology, require the FCC to adopt regulations to assure that callers are provided with "transparency and effective redress options;" and
- expand the statute of limitations period from one year to four years for the FCC and law enforcement agencies to commence actions for robocall violations.
New TCPA Law, Same TCPA Problem
The biggest problem with the current state of TCPA law—and, more importantly, what the Act fails to fix—is that it still remains a strict liability statute. That is, a company alleged to have violated only technical aspects of TCPA law cannot rely on a defense that it acted (i.e., called or texted) in good faith. For instance, let's say that a consumer provides prior express written consent to be contacted, but the company that calls/texts the consumer was inadvertently misidentified (brand name, not corporate or D/B/A name) in the list of parties that might call/text the consumer. In this scenario, this would be a technical (but very real and costly) violation of the law if a consumer were to commence legal action.
In addition, the Act does nothing to prevent professional plaintiffs and their attorneys from abusing the statute by consenting to be contacted using a fake name. This scenario occurs in many federal lawsuits and could easily be prevented if the TCPA definition of "called party" also included the "intended recipient." Were the "called party" definition modified in this way, professional plaintiffs would not have the incentive to use fake names – because as long as the telemarketer could show that it had obtained consent to call the intended recipient, the company would not be liable for a TCPA law violation.
The New TCPA Law and You
Litigation over TCPA law violations continues to increase every year. It is very likely that the Act's regulations, if approved, will lead to even more litigation and enforcement action. As such, for those operating in the marketing industry, it is imperative for businesses to work with knowledgeable counsel prior to engaging in any telemarketing campaign.
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