'Junk Fax' Bill Progresses in Senate

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The U.S. Senate Committee on Commerce, Science and Transportation last month approved by unanimous consent Senate Bill 714, "The Junk Fax Prevention Act of 2005." The bill would create an exemption to the Telephone Consumer Protection Act to allow for the sending of unsolicited facsimile ads to parties with whom the sender has an "established business relationship."

When introduced, the bill's definition of established business relationship reached back to transactions with customers within the previous 18 months. But the current version limits the relationship to three months and requires that businesses and consumers be given the chance to opt out of receiving further faxes by contacting the sender. The sender must make the means for opting out available 24/7.

The bill was necessitated by the Federal Communications Commission's 2003 revision of its telemarketing law, the TCPA. The TCPA prohibits the use of any telephone facsimile machine, computer or other device to send an "unsolicited advertisement" to a telephone facsimile machine.

An unsolicited fax is defined as "any material advertising the commercial availability or quality of any property, goods or services which is transmitted to any person without the person's prior express invitation or permission."

The 2003 revision to the TCPA included a reversal of the FCC's prior position that an established business relationship provides companies and associations the express permission to send unsolicited fax ads to their customers or members.

In other words, the FCC determined that the relationship no longer was sufficient to show that an individual or business has given express permission to receive unsolicited facsimile ads. Instead, businesses may send unsolicited fax ads only if they have express written consent to do so from the recipient. Membership in a trade association is not the equivalent of prior express permission to receive fax ads.

If SB 714 does not pass and become law by June 30, fax advertisers must be prepared or risk potentially serious liability under the TCPA. The act gives private citizens, or each recipient of a fax in violation of the TCPA, a right to sue for recovery of the greater of actual monetary damages or $500 in damages for each junk fax, and the issuance of an injunction plus damages, including the recovery of attorneys' fees and costs.

If the court finds that the sender knowingly violated the TCPA, the court may raise the award up to three times the amount of damages.

While waiting for this issue to resolve itself, an association or business can take steps to prepare for the possibility that written consent will be required to send an unsolicited fax ad, including obtaining express written consent from potential recipients.

The FCC would require written consent to include a clear statement providing: consent to receive faxed ads from the company to which permission is given as well as fax number of the individual or business to which faxes may be sent; the consenting person's or organization's fax number; and the consenting person's or organization's representative's signature.

This permission cannot be given in the form of a "negative option," or a statement instructing recipients that they can be removed from the fax ad list by contacting the sender.

Also, after obtaining consent, any fax ad sent must contain the date and time sent, identification of the business, entity or individual sending the fax along with the telephone number of the fax machine or a telephone number of that business, entity or individual.

Since 2003, the FCC has twice postponed the effective date of the new fax rule. It is now scheduled to take effect June 30. The Senate could vote on SB 714 before June 30. The bill appears to have strong bipartisan support, with both Republican and Democratic sponsors. However, opposition to the new three-month established business relationship amendment from business groups is likely and may create problems for the bill. After moving quickly through the Senate committee, the bill has yet to be placed on the Senate calendar. Also, a companion version of the bill has not been introduced in the House of Representatives.

You can follow the progress of SB 714 at the Library of Congress' legislative information Web site, Thomas.loc.gov.

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