Q&A with Cori Loomis
Changes to telephone act offer consumers relief, businesses risk
Q: With the proliferation of mobile devices, businesses are using cellphone calls and text messaging as a way to contact consumers for advertising and debt collection purposes. Being bombarded by texts and calls on a mobile device can be particularly frustrating for consumers. In response, the Federal Communications Commission (FCC) has tightened rules under the Telephone Consumer Protection Act (TCPA) that will be helpful to consumers, but pose a litigation risk for businesses. Can you explain the act?
A: The TCPA imposes a series of restrictions on telemarketing solicitations and other outbound communications, including voice calls and fax transmissions. Two provisions, in particular, have become problematic for businesses as more consumers rely on wireless telephones. First, the TCPA prohibits callers from using an automatic telephone dialing system (auto-dialer) or a prerecorded or artificial voice message (robocall) to call wireless telephone numbers without prior written consent.
Q: What recent development will assist consumers with annoying calls and texts, but pose a risk for businesses?
A: For more than a decade, the FCC interpreted the “prior express consent” requirement in a manner that was easy to comply with for telemarketers or debt collectors. The FCC took the position that consumers who knowingly gave their phone numbers to a business had, in effect, given their invitation or permission to be called at the number given. In 2012, the FCC changed its position. The new interpretation requires a signed, written agreement in which the consumer specifically consents to receiving telemarketing or debt collection calls or text messages via automated systems, artificial callers and prerecorded voices on a cellphone or residential line. This new requirement goes into effect Oct. 16.
Q: What is the additional risk for businesses?
A: The TCPA presents risks to businesses across numerous industry sectors — health care, retail, commercial banking, debt collection services, marketing, etc. Any business that interacts with consumers over mobile devices will need to evaluate their strategies and ensure that they have “prior express consent” or risk a hefty $1,500 per call or message penalty. In addition, because violations of the TCPA are easy to establish, there has been a proliferation of class action lawsuits in this area.
Q: What signs may tip off a consumer to a potential violation of the act?
A: Signs that a debt collector or telemarketer may be violating the TCPA include: the consumer is receiving calls or texts on his/her mobile device; when the consumer answers the phone, there is a pause before being connected with the operator, which may signal the use of an auto-dialer; the consumer is receiving prerecorded messages or robotic calls; and the consumer didn't grant express consent to receive prerecorded or auto-dialed calls or has expressly withdrawn such consent.
PAULA BURKES, BUSINESS WRITER