On another new episode of the Ad Law Access PodcastAlysa Hutnik starts at the beginning and explains a few of the issues you need to think about before starting a telemarketing texting campaign.

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The CFPB released its proposed rule governing debt collection, which would impose new requirements for debt collectors related to when and how a consumer can be contacted, what can and must be said when a consumer is reached, and the procedures to validate and verify a debt.  Industry and other stakeholders have long anticipated the proposed rule, which follows a July 2016 outline of proposals and November 2013 Advanced Notice of Proposed Rulemaking, previously discussed here.  The immediate response to the proposed rule has been mixed from both industry and consumer advocates – with provisions addressing call frequency and texting generating the most attention, as discussed more fully below.

The proposed rule generally applies only to “debt collectors,” as that term is defined under the Fair Debt Collection Practices Act (FDCPA), and thus would not apply to creditors or so-called “first-party” collectors seeking to collect a debt owed directly.  Additionally, certain requirements would apply only to those who collect debt related to a consumer financial product or service, based on the Bureau’s interpretation of its authority to promulgate rules under the Dodd-Frank Act to implement the FDCPA.

Notable substantive aspects of the proposal include:

  • Call frequency limitations. The proposed rule would generally prohibit collectors from calling consumers more than seven times per week regarding a specific debt and require a collector to wait at least a week before calling the consumer once a conversation takes place. While consumer advocates have argued that this provision would effectively green light seven calls per week in connection with each consumer debt, debt collectors would continue to be subject to preexisting laws that already prescribe requirements for contacting consumers by phone generally, such as the Telephone Consumer Protection Act (TCPA).  Some in industry, on the hand, have countered that an absolute call frequency limit would neither be workable nor practical, and have asserted that appropriate call frequency should instead be determined on a case-by-case basis.
  • Text messages and emails as acceptable communication methods with new limitations.  The proposed rule acknowledges that emails and text messages are regularly used for debt collection purposes and permits that use subject to certain restrictions, such as requiring instructions that permit the consumer to opt out from receiving messages.  The rule would impose new limitations that would operate in addition to existing requirements under the TCPA and state laws, which are not preempted under the proposal.  The proposed rule would also create a new category of messages called a “limited-content message,” which would only contain certain information and not be deemed a “communication” for purposes of general limitations under the FDCPA.
  • Disclosures and validation notices.  The proposed rule provides more details regarding the information that must be included in written notices following an initial communication a debt, and requires collectors to provide prompts that a consumer could use to dispute a debt, request information about the original creditor, or take certain other actions.  The proposal offers a model validation notice that could be used to comply with these requirements and creates a safe harbor if a collector complies with certain steps when delivering the validation notice.
  • Recordkeeping.  The proposed rule would also require collectors to retain evidence of compliance, including records evidencing that collectors perform the actions and made the disclosures required under the rule.  The rule allows such records to be retained by any method that reproduces the records accurately (including electronically) and that ensures that the debt collector can easily access the records.

Interested parties should review the proposed rule closely to assess how the new requirements could impact current and future practices.  Comments on the proposed rule are due 90 days from publication in the Federal Register, which should take place shortly.

A plaintiff recently filed a class action lawsuit against Google and its subsidiary, Slide, alleging that the companies violated the Telephone Consumer Protection Act by sending text messages to consumers without their consent.

Google and Slide recently released Disco, a “group texting” service that allows consumers to send text messages to up to 99 people at the same time. Message recipients can also respond via text to all members of the group simultaneously by sending a single message. Messages can quickly accumulate, and the named plaintiff alleges he received more than 100 text messages in a single day. According to the complaint, members of a group do not provide consent to be part of the group or receive messages; instead, group members must opt-out if they want to stop receiving group messages.

As we’ve noted before, various courts have generally held that companies must obtain express consent before they can send text messages to consumers. In this case, the defendants are likely to argue that they did not send the messages themselves, but that argument has yet to be tested. Companies should check with their counsel before sending text messages or implementing any promotion that allows consumers to send text messages to determine what consents may be necessary.

The current and future definition of what qualifies as an automatic telephone dialing system (ATDS or autodialer) remains a hotly debated and evaluated issue for every company placing calls and texts, or designing dialer technology, as well as the litigants and jurists already mired in litigation under the Telephone Consumer Protection Act (TCPA).  Last year, the D.C. Circuit struck down the FCC’s ATDS definition in ACA International v. FCC, Case No. 15-1211 (D.C. Cir. 2019).  Courts since have diverged in approaches on interpreting the ATDS term.  See, e.g., prior discussions of Marks and Dominguez.  All eyes thus remain fixed on the FCC for clarification.

In this post, we revisit the relevant details of the Court’s decision in ACA International, and prior statements of FCC Chairman Ajit Pai concerning the ATDS definition to assess how history may be a guide to how the FCC approaches this issue.

Continue Reading Taking Stock of the TCPA in 2019: What is an “Autodialer”?

iStock_000036215158Large-335x251On January 11, 2016, the FCC’s Consumer and Governmental Affairs Bureau released an order denying a petition by a text message platform provider for a declaratory ruling that the Commission should evaluate TCPA liability for these types of entities under the same standard established for fax broadcasters.  In the Order, the Bureau explained that a separate liability standard for text message apps and platforms was laid out in the Commission’s July 2015 Omnibus TCPA Order and that “text broadcasters can be liable for TCPA violations based on the factors discussed in that decision.”

The petitioner, Club Texting, Inc., filed its request for a declaratory ruling in 2009.  In the petition, Club Texting asked the Commission to apply the fax broadcaster TCPA liability standard to text message platforms, such that “liability will attached only if a text broadcaster ‘demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such transmissions.’”  In support of this request, Club Texting claimed that if the Commission made an affirmative finding that text broadcasters are not “senders” for TCPA purposes, it would “promote compliance” by the broadcasters’ third party clients that “are in the best position to ensure that recipients have consented to receive the text messages.”

FCC TCPA Declaratory Ruling

Nearly six years after the petition was filed, the FCC released its July 2015 Omnibus TCPA Order, in which it responded to approximately two dozen petitions for clarification of a variety of TCPA-related issues, including the Commission’s definition of a “caller” for purposes of determining TCPA liability.  In the Order – which is currently being challenged in the U.S. Court of Appeals for the D.C. Circuit – the Commission determined that a calling or texting platform or application may face primary liability under the TCPA as the “caller” based on a case-by-case analysis of whether the entity takes the steps necessary to physically place the telephone call (or text), or is so involved in the placing of a call to have been deemed to initiate it (as opposed to merely having some role, however minor, in the causal chain that results in the making of the telephone call).  The Commission further explained that other relevant factors when making its determination could include “the extent to which a person willfully enables fraudulent spoofing of telephone numbers or assists telemarketers in blocking Caller ID, by offering either functionality to clients,” or whether the text broadcaster “has knowingly allowed its client(s) to use that platform for unlawful purposes.”

The FCC’s standard is similar to the “high degree of involvement” standard applicable to fax broadcasters, but the Commission made clear that it was not applying the fax broadcaster standardper se.  This raises the possibility that outcomes involving calls or texts will differ than they would if faxes were involved.  Until we see cases adjudicating liability, however, we will not know how much of a difference the standard makes in practice.

Club Texting Petition

Against this backdrop, the FCC’s order in Club Texting is primarily procedural.  In denying the Club Texting petition, the Bureau reaffirmed the position in the Order and noted that “the Commission has clarified the standard to be applied to text broadcasters and that standard is not the same standard as applies to fax broadcasters.”  It did not revise the standard, nor did it offer any meaningful clarifications of how the standard will be applied.  Indeed, the order explicitly states that it is not adjudicating the liability of any particular text broadcasting service at this time.

We note that the FCC has proposed to fine a “robocall broadcaster” previously.  The case involved Dialing Services, Inc., a developer of a software platform that allows customers to record their own messages and send them to a designated list of recipients.  The Commission issued a Notice of Apparent Liability against the company in May 2014, and proposed a $2.9 million penalty on the basis that Dialing Services had allowed its customers, through its platform, to make 184 unlawful prerecorded message calls to cell phones.  According to the Commission, because of the company’s involvement in the call process, Dialing Services made or initiated the calls.  The Commission has yet to convert the NAL to a Forfeiture Order, however.  Arguably, the Commission should apply the standard announced in the 2015 TCPA Declaratory Ruling to determine Dialing Services’ liability in the case.

For now, service providers should expect the Commission to continue in its efforts to cast a wide consumer protection net, and companies involved in activities regulated by the TCPA should take whatever steps are necessary to avoid unwanted attention from regulators or the plaintiffs’ bar.

On July 10, 2015, the Federal Communications Commission (“FCC” or the “Commission”) released the text of its omnibus Declaratory Ruling and Order (“TCPA Declaratory Ruling and Order” or “Ruling”), which the Commission adopted by a 3-2 vote almost a month earlier, on June 18, 2015.

In Friday’s Ruling, the FCC responded to 21 petitions by a number of companies and trade associations who sought relief or clarification regarding the requirements of the Telephone Consumer Protection Act of 1991 (“TCPA”).  The Ruling redefines what equipment falls within the definition of “autodialer,” specifies liability for calls to reassigned telephone numbers, provides consumers with a right to revoke consent by any reasonable means, and establishes new exceptions for financial and healthcare related calls, among other changes.

Chairman Wheeler and Commissioner Clyburn both voted in favor, while Commissioners Rosenworcel and O’Rielly approved in part but dissented in part, and Commissioner Pai dissented.

Overview

In this Client Advisory, we address the Ruling’s discussion of the definition of “autodialer,” reassigned phone numbers, consent revocation, and certain financial and healthcare exemptions.  The Advisory also highlights other aspects of the Ruling, such as clarity that telecommunications carriers and VoIP providers can enable call blocking technologies in response to consumer requests, the liability for calling and texting platforms, a limited exemption for a one-time text immediately sent in response to a consumer’s request for information, the effect of consents obtained prior to the FCC’s 2012 rule change and the conclusion that Internet to text services fall within the scope of the TCPA.

The Advisory concludes with a review of the effective dates of the Ruling and next steps regarding possible appeals, filing deadlines, and potential legislative solutions. Continue Reading A First Look at the FCC’s 2015 TCPA Declaratory Ruling and Order