New Federal, State Rules Are Coming

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My clients often have asked me technical questions about compliance with the Telephone Consumer Protection Act, such as how long they had to implement a consumer's do-not-call request or how long they had to send a do-not-call policy to someone who requested it.


These questions often arose in litigation under the TCPA. Potential plaintiffs often threatened to sue for failure to promptly send a copy of a do-not-call policy, though the Federal Communications Commission's regulations never mention or define the word "promptly." In the same vein, if my clients' representatives were trained to say that a do-not-call request would take three days to implement, potential plaintiffs often threatened suit because they thought this was too long.


My solution was to not specify a time period, because I thought my clients' representatives often would get a response of "Too long!" even if their companies took 8 nanoseconds to implement a request. I instructed clients to act reasonably, process the requests promptly and effectively, and hope that the affirmative defense found in the TCPA would protect them in case of vexatious litigation. Businesses, however, faced litigation costs when acting reasonably and often settled suits simply to avoid these costs.


Confusion about these and similar details may end soon. For the first time in more than a decade, the FCC has announced its intention to amend the rules implementing the TCPA. It invited comment on the issues specified above: how should the privacy interests of individuals be protected while allowing reputable businesses the ability to contact potential customers? The FCC also asks, "Are there any industry 'best practices' that might provide telemarketers with possible safe harbors from liability for violating our do-not-call rules?"


Now is the time to provide empirical data that 14 days is a reasonable time to process a do-not-call request, for example, or that DNC policies should be mailed within 30 days of a request.


The request for comment also could be a precursor for the FCC to replace the current company-specific do-not-call lists with a national list that may complement or operate in addition to a similar list proposed by the Federal Trade Commission.


It appears that the entire substance of the TCPA regulations could be revised as the FCC also asked for commentary on existing rules for predictive dialers, caller ID, calls using recordings and telephone facsimiles.


One area of importance for businesses making any type of call is the definition of "established business relationship." Currently, that term does not require an exchange of consideration, simply a previous inquiry from the consumer to the business. The FCC has indicated that it intends to offer specific guidance as to the scope of this term, co-ventures and other instances where a business allows its customers to be called by a marketing partner.


The Notice of Proposed Rulemaking was issued Sept. 18 (download this proposed rule making at www.fcc.gov/edocs_public/attachmatch/fcc-02-250A1.pdf) and published in the Federal Register on Oct. 8. Responses to the FCC's questions are due Nov. 22. This is a great opportunity for the industry to get answers about a law that lacks a lot of established precedent to provide guidance.


Though comments can take any form, the more empirical data included as to the benefits to consumers and legitimate business, the better. The document states that "Parties are strongly encouraged to provide empirical studies or other specific evidence whenever possible to support their arguments."


California abandonment standard. California is one of the first states to enact a law regulating call abandonment - disconnecting a connected consumer call when a telephone representative is not available caused by the use of predictive dialers.


The California Public Utilities Commission proposed regulations implementing this law and broadened the definition of an "error" in violation of the law. An error now includes this type of disconnected or abandoned call as well as connected calls in which a telemarketer does not come on the line within 2 seconds of the consumer's answer to the call.


I attended a workshop on these implementing rules held Sept. 26 by the CPUC in San Francisco. CPUC staff addressed topics of interest regarding this law. It soon will promulgate a final regulation for public comment.


First, CPUC representatives asked whether the current plan to reduce the acceptable error rate to 1 percent as of Jan. 1 was feasible. Industry representatives made it clear that this error rate basically is the same as hand dialing or "one to one" operation of a predictive dialer. A representative of the attorney general said that it was his office's position that the 1 percent standard should be implemented immediately.


Second, CPUC staff asked whether industry should be required to help educate the public concerning the existence of do-not-call lists. Though "forced speech" like this is unconstitutional in almost every circumstance, the attorney general and a representative of a consumer organization argued that this was a good idea.


The CPUC did take what seemed a reasonable stance regarding record-keeping requirements for predictive dialing use. It appears that maintaining records for calls abandoned by a telephone number would be sufficient and that the specific device from which each call was placed would not be required.


It also appeared the commission would recognize that calls to existing customers by nonprofits and commercial entities would be exempt. The CPUC was silent, however, as to whether calls from a nonprofit to nonmembers would be exempt.


The CPUC might delay implementation of the 1 percent standard for another six months or one year, but it seems very unlikely that the current 3 percent standard will be made permanent.


Florida lawsuits. Agriculture commissioner Charles Bronson recently filed several suits against businesses alleging violations of the Florida do-not-call list law. In an election year, it is no coincidence that several states, including Florida, seem to be stepping up enforcement of their DNC lists.


Nearly every state law allows calls to a business' former and current customers even if their names are on the state list. Consumers, however, often report these calls, causing the state regulator to make an inquiry of the calling business.


The caveat to this exemption is that several states set a time limit for calls to former customers, such as 18 months. If the customer has not made a purchase from the business in 18 months, he does not have an "established business relationship" such that the exemption to the list applies. Screen your customer records with regard to former customers to ensure that these time limits are honored.


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