Compliance Deadline Alert: FCC Changes in Express Consent Standards to Take Effect on October 16, 2013

Effective October 16, 2013, two key provisions of the Federal Communications Commission’s (“FCC”) Telephone Consumer Protection Act (“TCPA”) are set to take effect.

First, one prior exception from liability under the TCPA for phone calls or text messages using an automatic telephone dialing system (“robocalls”) or a prerecorded message was for those calls or messages that were made with the recipient’s “prior express consent.” Under the new interpretation from the FCC of the prior consent exception, with limited exceptions, a business can invoke the prior express consent exception for autodialed or prerecorded calls to a cell phone or for prerecorded telemarketing calls to a residential line only if the called party has physically or electronically signed an agreement that clearly authorizes calls or texts to be made to their phone number by that particular sender. The burden is placed on the business to retain these consent records for at least four years.

Second, the other significant change to the TCPA rules is the elimination of the “established business relationship” (“EBR”) exception for prerecorded telemarketing calls to residences. Previously, businesses may have been able to avoid TCPA liability for prerecorded telemarketing calls that otherwise were prohibited by claiming that they had an EBR with the consumer by virtue of a previous purchase or other business interactions. The new regulations eliminate the EBR exception. Consequently, businesses are now required to obtain prior written consent for all prerecorded telemarketing to residential phone numbers – even those that are for previous customers. These consent records must also be kept for at least four years.

Notably, these changes areandnbsp;in addition toandnbsp;the modifications to the rule that went into effect on January 14, 2013. Since that time the rule has required that prerecorded telemarketing messages that could be answered by a live person must include an automated opt-out mechanism. This opt-out option must be announced at the outset of the call, made available throughout the duration of the call, automatically add the called party’s number to the caller’s do-not-call list and must immediately disconnect the call. For prerecorded telemarketing calls that are answered by an answering machine or voicemail, businesses must now ensure that the message contains a toll-free number that the consumer can call to be connected to an automated opt-out system.

In sum, the new changes in effect on October 16, 2013, will:

• Require prior express written consentandnbsp;for telemarketing calls made to cell phones using an automatic telephone dialing system or a prerecorded message, but maintain the prior express consent requirement for non-telemarketing calls to cell phones;
• Require prior express written consentandnbsp;for telemarketing calls made to residential landlines using a prerecorded message; and
• Eliminate the EBR exception to the obligation to obtain consent for telemarketing calls made to residential landlines using a prerecorded message.

What Constitutes “Express Consent”?

The TCPA defines “prior express written consent” as a signed written agreement that contains a “clear and conspicuous” disclosure to the consumer that by signing the agreement, he or she authorizes the seller to call or text a designated phone number for telemarking purposes using an automatic telephone dialing system or an artificial or prerecorded voice. The agreement must also include a notice that the person signing is not required to sign the agreement “as a condition of purchasing any property, goods, or services.”

The required signature from a consumer may be obtained electronically by email, website form, text message, telephone keypress, or voice recording.

What Should Your Business Do?

The FCC, state Attorneys General, and private plaintiffs have the right to enforce consent requirements. Thus, compliance with these rules is very important. Prior to October 16, 2013, businesses should assess their calling and text messaging practices to first determine if they engage in telemarketing calls. The term “telemarketing” is defined as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.” Then, the business should determine the source of the numbers it calls and whether prior written consent exists for each number. Based on this assessment, businesses should adjust accordingly in order to comply with the impending change to the FCC’s rules as well as in an attempt to avoid potential liability to the extent possible.