Caller beware: Written consent now required for automated telemarketing calls!

published in McAfee & Taft Business Law Alert | October 15, 2013

By Michael F. Smith

The Federal Communications Commission (FCC) recently enacted new regulations enforcing the Telephone Consumer Protection Act (TCPA). These new regulations, which go into effect October 16, 2013, significantly change the legal landscape for those businesses which promote their goods and services via telemarketing calls and text messages.

Under the new regulations, it is a violation of the TCPA to make a telephone call (or send a text message) that includes an advertisement or constitutes telemarketing using an automatic telephone dialing system or an artificial or prerecorded voice other than a call made with the “prior express written consent” (PEWC) of the called party. PEWC is defined as “an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered.”

The written agreement shall include a “clear and conspicuous disclosure” informing the person that: (1) by entering into the agreement, the person “authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice;” and (2) the person “is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.”

The new regulation permits electronic signatures consistent with federal law. The Electronic Signatures in Global and National Commerce Act (E-SIGN Act) defines “electronic signature” as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” However, the E-SIGN Act requires a litany of disclosures that must be made before a consumer can consent to receiving electronic disclosures and before the electronic signature is valid.

It is unclear from the regulations whether the new PEWC requirement applies to existing subscribers who expressed consent under the prior regulations to receive telemarketing text messages. The new regulation is silent on the question of whether prior express consent will govern telemarketing calls made or text messages sent after October 16, 2013.

However, the FCC indicates that the effective date of the PEWC requirement was delayed a year to allow time for businesses to redesign their sign-in procedures. Further, the FCC, in responding to commenters suggesting business be authorized to continue autodialed or prerecorded calls based on consent obtained under the FCC’s prior rules, noted that businesses could use existing consents until the effective date of the PEWC—October 16, 2013. “Once the FCC’s written consent rules become effective, however, an entity will no longer be able to rely on non-written forms of express consent to make autodialed or prerecorded voice telemarketing calls, and thus could be liable for making such calls absent prior written consent.” Thus, though the regulation is silent, the FCC suggests telemarketing calls made after October 16, 2013, are subject to the PEWC requirement.

TCPA violations have proven fertile ground for class action litigation. If telemarketing is part of your business model, you should consult with counsel for further information and to determine whether your process complies with the new regulations.

This alert has been provided for clients and friends of McAfee & Taft A Professional Corporation. It does not provide legal advice, and is not intended to create a lawyer-client relationship. Readers should not act upon information in this alert without seeking professional counsel.