Telemarketing

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Over the past couple of months, we have been waving the caution flag in the air while attempting to warn businesses about the potential liability for violations under the TCPA.  In our previous posts, we noted the numerous consumer lawsuits that have been filed against businesses throughout the country, a list which continues to grow on a weekly basis (see our TCPA Update for more recent filings).  On May 19, 2014, the Federal Communications Commission (“FCC”) announced a record $7.5 million fine against Sprint Corp. (“Sprint”) in a settlement for violations of the “Do-Not-Call” law, which should send a clear message to telemarketers that class actions are not the only threat to a telemarketer’s bottom line.  Indeed, the FCC’s statement on the settlement explicitly states:

We expect companies to respect the privacy of consumers who have opted out of marketing calls.  When a consumer tells a company to stop calling or texting with promotional pitches, that request must be honored.  Today’s settlement leaves no question that protecting consumer privacy is a top enforcement priority.

First, a brief refresher of the “Do-Not-Call” law’s history and basic statutory framework may be helpful.  Under 15 U.S.C. § 6151, the “Do-Not-Call Registry Act of 2003” went into effect in 2003, establishing a national registry for consumers to opt out of telemarketing calls for free.  The statute formally ratified the FTC’s do-not-call registry provision of the Telemarketing Sales Rule, 16 C.F.R. § 310.4(b)(1)(iii).  The “Do-Not-Call Implementation Act of 2003,” 15 U.S.C. § 6152 et seq. authorized the FCC to issue do-not-call regulations under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq.  As a result, in June 2003, the FCC supplemented its TCPA rules to also include a national Do-Not-Call list.  As a result, businesses must comply with both FCC and FTC regulations when making telemarketing calls.  Note that the FCC Guide on Unwanted Marketing Calls indicates the law applies only to personal landline and wireless phones—not business phones.  The “Do-Not-Call” law also exempts calls made with express prior written consent, calls made by nonprofit organizations, or calls from a person or organization with an established business relationship. 
Continue Reading Caller Beware: FCC’s Record “Do-Not-Call” Fine Highlights Liability Under TCPA

The Federal Trade Commission (“FTC”) recently announced that it intends to begin review of, and solicit comments on the Telemarketing Sales Rule (“TSR”).  The opportunity to provide comments will be a significant opportunity for marketers to weigh-in on one of the FTC’s main regulatory and enforcement tools.

Despite its focus on telemarketing practices, the TSR’s breadth and impact goes far beyond merely the telephone and the well-known Do Not Call Registry.  The TSR is one of the few methods the FTC can efficiently (although sometimes controversially) adopt rules prohibiting deceptive or abusive practices.  And, it’s the TSR’s broad scope of coverage that has made it a popular enforcement vehicle for the FTC, Consumer Financial Protection Bureau (“CFPB”), and state Attorneys General.

Since the TSR was promulgated it has undergone several significant expansions, and at the same time the marketplace for telemarketing has changed in significant ways that impact consumers and marketers. The TSR gives effect to the Telemarketing and Consumer Fraud and Abuse Prevention Act (the “Telemarketing Act”) that was signed into law in 1994. The Telemarketing Act directed the FTC to adopt a rule prohibiting deceptive or abusive practices in telemarketing and specified, among other things, certain acts or practices that should be addressed, and additional practices if found deceptive or abusive. Pursuant to its authority under the Telemarketing Act, the FTC promulgated the TSR in August 1995, and has subsequently amended the TSR on three occasions, in 2003, 2008, and in 2010. 
Continue Reading On Deck, Telemarketing Sales Rule Regulatory Review