It’s not often we see defendants win a resounding victory against the Federal Trade Commission (FTC) and/or state attorneys general, especially after trial. But a recent opinion out of the Eastern District of Pennsylvania provides us with just that. On March 29, 2024 the court issued a 55-page opinion following a 15-day bench trial on the FTC and Pennsylvania attorney general’s claims against American Future Systems, Inc. and its two co-defendants, finding in favor of the defendants on all six counts.

The FTC and Pennsylvania AG challenged telemarketing for print publications, claiming defendants deliberately misled consumers when defendants:Continue Reading Telemarketing Trial: Defendant Sweeps All Six Claims Against the FTC and Pennsylvania AG

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear an author of this chapter dive deeper into telemarketing and texting in this week’s episode.

Telephone and text message marketing poses private litigation risks and regulatory hurdles that should be considered before any campaign. The Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and states enforce do-not-call (DNC) laws and impose multiple other requirements regarding calling manner, disclosures, consent, opt-out, calling hour limits, caller identification, and telemarketer registration. Calls and texts made to cell phones, using certain types of dialing technology (including autodialers) and prerecorded messages (so-called robocalls), require particular attention, as much of the enforcement and litigation in this area involve texting and robocalling.Continue Reading Telemarketing and Texting: An Excerpt from the Advertising Law Tool Kit

Episode 12 of the Ad Law Tool Kit Show, “Telemarketing and Texting,” is now available. Listen here, or search for it in your favorite podcast player.

Telephone and text marketing is ubiquitous these days. But those tools also pose private litigation risks and regulatory hurdles that marketers should be aware of at the outset of any campaign. They involve legal and regulatory complexities, including do-not-call laws enforced by the FTC, FCC, and states.Continue Reading Listen to Episode 12 of Venable’s Ad Law Tool Kit Show – “Telemarketing and Texting”

Last month, the Supreme Court of Maryland delivered a pivotal ruling defining the scope of the Maryland Telephone Solicitations Act (MTSA), holding that the act extended to inbound calls initiated by consumers who engaged with merchant advertisements. The Maryland Supreme Court also confirmed that the Maryland Public Service Commission can enforce the MTSA against covered entities.

The case, In the Matter of Smart Energy Holdings, LLC D/B/A SmartEnergy, originated in response to customer complaints to the Public Service Commission’s Consumer Affairs Division (CAD) alleging that their bills were excessive and that they were unable to cancel their service with SmartEnergy, a provider of 100% green energy. After proceedings before an administrative law judge, the Public Service Commission held:Continue Reading The Power of Customer Calls: Maryland Supreme Court Upholds Public Service Commission’s Interpretation of the Maryland Telephone Solicitations Act

Venable’s Advertising and Marketing Group hosted its 10th Advertising Law Symposium on March 21 in Washington, DC. The group welcomed in-house counsel, advertising executives, and marketing professionals for a full day of sessions on the latest developments in advertising law and what to watch for soon.

Here are some highlights:

Patchwork of Privacy Laws Makes Compliance a Challenge

Frequent data breaches and incidents like the 2018 Cambridge Analytica scandal have increased criticism of the United States’ approach to regulating privacy through a patchwork of federal and state laws and industry self-regulatory codes. But even harsh critiques have not been enough to spur Congress to pass a preemptive privacy law that would supersede the jumble of state laws and regulations and streamline things. Partner Rob Hartwell and associate Allie Monticollo said marketers and advertisers should watch what’s happening in the states and mitigate risk accordingly.Continue Reading Event in Review: 10th Advertising Law Symposium

The Rule-A-Palooza continues at the FTC. On March 7, 2024, the Federal Trade Commission (FTC) released a Final Rule that updates the recordkeeping requirements under the Telemarketing Sales Rule (TSR). The Final Rule requires telemarketers and sellers to maintain additional records relating to their telemarketing transactions. The FTC also extended the period for which all records must be kept—now five years instead of two. The Final Rule also extended the prohibition of material misrepresentations and false or misleading statements in business-to-business (B2B) calls.

New Recordkeeping Requirements

According to the FTC, the newly added recordkeeping requirements are meant to help the FTC identify the telemarketer and seller and to link the content of the telemarketing calls with the call detail records to determine TSR violations. The new requirements are as follows:Continue Reading FTC Piles on Additional Recordkeeping Requirements and Business-to-Business Protections

On January 29, 2024, Congressman Frank Pallone, Jr. introduced the Do Not Disturb Act, a bill that would amend the Telephone Consumer Protection Act (TCPA) and “fix” the Supreme Court’s ruling in Duguid that limited the definition of “automatic telephone dialing system” (ATDS).

Robocalls, the New ATDS

The bill would delete the term “automatic telephone dialing system” from the TCPA and would instead replace it with “robocalls.” The bill defines “robocalls” as calls and text messages sent using equipment that makes calls or sends text messages to stored telephone numbers or telephone numbers generated by a random or sequential number generator, or using an artificial or prerecorded voice or an artificially generated message.Continue Reading New Bill to Modernize the TCPA Would Significantly Expand Potential Liability

Moving at rapid speed, the Federal Communications Commission (FCC) has just announced its unanimous adoption of a new Declaratory Ruling finding that voice calls using artificial intelligence (AI)-generated voices fall under the Telephone Consumer Protection Act (TCPA).

The ruling takes effect immediately and gives state attorneys general powerful new tools to go after voice cloning scams. Under FCC rules, telemarketers that use robocalls subject to the TCPA are required to obtain prior express written consent from the consumer unless an exemption applies. The TCPA has always prohibited the use of both prerecorded and artificial voices but advances in AI-generated voices have prompted the FCC to specifically address their use.

In recent years, scammers and other parties have begun using AI to create fake and even “cloned” artificial voices, including those of celebrities, politicians, and even a call recipient’s family member. In this election season, there has been increasing concern about the use of voice clones to engage in voter suppression schemes.Continue Reading FCC Clarifies TCPA Rules to Affirmatively Restrict Use of AI-Generated Calls

Telemarketers celebrating the new year should be aware of Maryland’s new telemarketing law, Stop the Spam Calls Act, which took effect January 1, 2024. Like the federal Telephone Consumer Protection Act (TCPA), Maryland now prohibits telephone solicitations (i.e., marketing calls and texts) without the prior express written consent of the called party. But unlike the TCPA, which prohibits the use of an “autodialer” or “ATDS,” the Maryland Act prohibits the use of an “automated system.”

What constitutes an autodialer has been thoroughly litigated up to the U.S. Supreme Court. There, the justices decided that an autodialer is a device that “must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.”Continue Reading Maryland Rings in the New Year with an Expanded Telemarketing Law

This week, the Federal Trade Commission (FTC) announced a Proposed Stipulated Order with lead generator Response Tree LLC and its president, resolving allegations that the company violated the Telemarketing Sales Rule (TSR) and Section 5 of the FTC Act. The complaint alleged that the company operated “consent farm” websites that misled consumers into providing their telephone numbers, falsified lead data, and obtained leads without requisite consent, resulting in unlawful prerecorded calls and calls made to telephone numbers on the Do Not Call Registry.

First, the complaint alleges that defendant’s websites duped consumers into providing their telephone numbers by misrepresenting that they were consenting to receive calls about home mortgage financing quotes. According to the complaint, the defendant sold the lead to partners who marketed products or services completely unrelated to home mortgages or lending.Continue Reading FTC Bans Lead Generator from Participating in Robocalls in $7 Million Settlement