10.08.2013

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Updates

On October 16, 2013, new rules promulgated by the Federal Communications Commission on June 11, 2012 implementing the Telephone Consumer Protection Act of 1991 go into effect regarding the requirements for prior written consent necessary to send text/sms marketing messages.[1] 

The new regulations change the consent requirement and will have significant impact on retailers and other businesses who send text/sms marketing to their customers using an automated telephone dialing system (ATDS)[2], which the FCC and the courts have assumed includes the technology used to transmit text/sms messages.  While these new rules apply only to marketing messages or solicitations, not purely informational messages, some form of consent is still required for informational messages sent to wireless numbers. Thus, written consent is likely to be preferred for those types of messages as well.

Compliance is Critical, Increase in High-Stakes Class Action Litigation

The importance of compliance with these new regulations cannot be overstated. 

In recent years, there has been a significant increase in class action litigation for TCPA violations – particularly with regard to text/sms marketing messages.  Given the volume of messages that are transmitted, the strict liability nature of the statute which allows for statutory damages of between $500 and $1,500 for willful violations, and the large attorney fee awards that have been obtained in these cases, it is important to be aware of, and in compliance with, the new FCC Rules and Regulations.

Prior Written Consent Requirements

There is a substantial change in the type of consent to send text messages that will now be required and whether new consents need to be obtained from customers who previously have opted in to your text/sms message program.  Under the new rules, the following must be included for the prior express written consent to be effective:

  1. The consent must be a “signed” writing but the term "signed" includes an electronic or digital form of signature to the extent such form of signature is recognized as a valid signature under applicable federal or state contract laws.  Written agreements obtained in compliance with the E-Sign Act satisfy the requirements, such as agreements obtained via email, website form, text message, telephone keypress or voice recording;

  2. The consent must clearly authorize the seller to deliver or cause to be delivered the marketing message to the telephone number specifically authorized by the signatory;

  3. The written agreement shall include a clear and conspicuous disclosure informing the person signing that:

      • By executing the agreement, such 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

      • 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.

While the rules and regulations do not specifically indicate that the new consents must be obtained from customers who have previously provided a form of written consent, the June 2012 Final Rule reflects that the consent provisions were delayed a year to give businesses an opportunity to redesign websites and programs to obtain the new forms of consent. (See June 2012 Rules at ¶50-53).  Also, given the four year statute of limitations for TCPA claims, it is recommended that records relating to the written consents be kept for a period of four years from the date the consent was obtained--even though the new rules only require a retention period of 24 months.

Given the high stakes of TCPA class action litigation, it may be advisable to obtain new consents from existing opted-in customers to minimize TCPA litigation risk exposure.  Further, if the new consents from existing opted-in customers are to be obtained by text/sms messaging, the opt in requests should be sent prior to the October 16, 2013 deadline.



[1] This update is directed solely to issues relating to text/sms messaging and calls to wireless numbers and not the other new provisions that relate to calls to residential lines such as the elimination of the established business relationship exemption for such calls.

[2] The TCPA defines an ATDS as “equipment which has the capacity to both (1) “store or produce telephone numbers to be called, using a random or sequential number generator; and (2) to dial such numbers.” 47 U.S.C. § 227(a)(1). The courts have interpreted this definition to mean that if equipment merely has the “capacity” even if not used, that is enough to come within the definition.  This precise issue is currently before the FCC pursuant to a Petition for Declaratory Ruling filed by GroupMe.  (GroupMe, Inc., Petition for Expedited Declaratory Ruling and Clarification, CG Dkt No. 02-278 (filed Mar. 1, 2012)).

© 2013 Perkins Coie LLP


 

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