Information Services Video

Avoiding Telephone Consumer Protection Act (TCPA) Traps

Becky Burr, Deputy General Counsel and Chief Privacy Officer, Neustar

Did you know you may be taking a legal gamble every time you use an autodialer to call a consumer? In this session, hear directly from an FTC veteran and privacy expert about the creation and evolution of the Telephone Consumer Protection Act (TCPA) and how autodialing cell phone numbers without prior consumer consent could result in costly TCPA violations. Becky will provide an insider’s perspective on how to navigate TCPA restrictions and best practices for leveraging authoritative phone data to mitigate TCPA risk.


It's a pleasure to introduce Becky. For those of you, Dennis mentioned TCPA. So if you don't know, it's the Telephone Consumer Protection Act. If you don't know what it is, listen. If your business is doing any outbound calling to consumers, you need to know what it is. You're at risk if you don't know what it is.

And Becky is an authority. She comes to us from the FTC where she worked heavily on consumer protection. She's an expert in this space and it's a true honor to have her as part Neustar and to have her here, so welcome, Becky.

Thanks. All right. I'm going to walk around up here because I'm short. Like Dennis, I'm new to Neustar. I started working with TARGUS just about a year ago. Well, actually early 2012, and I joined Neustar as the chief information-- chief privacy officer in June. And my job, my task there, is to roll out the company's privacy and security by design program.

I know all of you in the marketing space here, about what's going on the privacy world here, about what regulatory things are happening, what litigation is happening, what Congress is doing. You should-- I came to Neustar because I was quite impressed with the commitment that the NIS folks bring to-- great analytics, powerful analytics to help you market in a privacy-friendly way.

And so far we've been very successful. The team has been an incredibly welcoming. I'm part of the team, so in one of the mojos, one of the pieces of mojo, one of the threads, is a lot of energy and excitement about moving things forward in a privacy-friendly way so that you don't have to deal with lawyers, or litigators, or regulators. So I've been asked to talk about the Telephone Consumer Protection Act, TCPA. Probably most of you who do any kind of interactive telemarketing have heard of that. It is administered by the Federal Communications Commission. It regulates the use of auto-dialed or pre-recorded calls, and it applies to everyone-- not just telephone companies.

There is another act that is that essentially overlaps that, it goes beyond it, but for purposes of auto-dialed and pre-recorded calls, the Telemarketing Sales Rule, which is administered by the Federal Trade Commission is a little bit broader. It talks about hours and things, when you can call. But it also has exactly the same auto-dial, pre-recorded call rules.

It doesn't apply to banks, and common carriers, and insurance companies, but otherwise it applies to all of you. And the Federal Trade Commission is a very aggressive enforcer, so you have to pay attention to both of those agencies. Briefly, the TCPA prohibits the use of auto-dialers and prerecorded messaging to emergency lines, health care facilities, wireless numbers, or any number where the called party pays, without the prior expressed consent of the called party. There are some exceptions to this, but it generally prohibits non emergency pre-recorded messaging to residential lines without the prior express consent. It limits your ability to do fax spam, and it has some provisions that relate to tying up business lines. But we're going to focus on the two things, the pre-recorded calls and the auto-dialing.

So everybody wants to know, does it apply to me? Please say it doesn't apply to me. If the questions that you need to ask are, and I've broken them out pretty deliberately because you have to go through them one at a time is, are you using an auto-dialer? Are you calling a landline or a wireless number, and do you know, and how do you know?

Do you have the prior express consent of the called party? Does it make any difference if you have an established business relationship with that party? And what happens if you get it wrong? Now, I'm going to bet that some of you are going to be surprised by the answers, because they are not intuitive, to say the least.

So first question, are you using an auto-dialer? We all know what an auto-dialer is. It's a machine that generates random numbers or sequential numbers and dials them, right? That's what an auto-dialer is. That's, in fact, what the statute says an auto-dialer is. Not withstanding that fact, the courts have said, well, yes that's an auto-dialer, but of course you can use it to generate numbers and then manually dial them. If you do that, you're still using an auto-dialer, even if you don't use the machine, the equipment, to generate the call.

And then in 2012, the FCC issued a new order and basically said, this covers any equipment that has a specified capacity to generate numbers and dial them without human intervention, regardless of whether the numbers are called randomly, sequentially generated, or they're your calling list. That calling list is a new and non intuitive piece of this. So if you're calling your own customer list using equipment that dials the numbers for you, you're using an auto-dialer. Are you calling a landline or a wireless number? Well, the answer is, it used to really simple to know the answer to this question because there were different area codes and that kind of stuff. It is now impossible to look at a number and understand that.

Consumers can take their household lines and turn them into wireless lines, they can take their wireless numbers and turn them into residential lines. You might have somebody's old residential number as your wireless number, or somebody might have your old number as their wireless number. And this stuff changes constantly. To make matters more complex, wireless numbers are usually unlisted and you should expect that a dramatically increasing percentage of the people you're communicating with are on a wireless device.

Something north of 36% of all households in the United States have wireless capacity only-- no landlines. That's going to get a lot bigger, a lot faster. My kids, who are 28 and 24, have never used a landline in their adult lives and never will. So next question, who's the called party? You might think, and it makes some intuitive sense, that if you have somebody's telephone number, and they've told you can call them on that telephone number, and you dial that number, the party you're calling is the person who gave you that telephone number.

Well, in a very significant case last year in the Seventh Circuit, the court said, nope, doesn't matter who you think you're calling. The called party is the person who is the subscriber to the line at the time you call them. So if you have permission from somebody last year to call a certain number and they've turned that number in and it's been reassigned, you're in violation of the act if you call that number and it's a wireless number and you don't have express consent. And of course, what is prior express consent? Up until last year, the FCC had a pretty relaxed perspective on this. Essentially, if someone gave you the number, you could infer from the fact that they gave it to you that they were giving you permission to call.

The FTC changed that position in 2009. Some courts followed up in connection with the TCPA litigation, and last year, the FCC in its order, 2012 order, adopted the FTC's statement of what prior express consent is. So it means you have to give the consumer clear and conspicuous disclosure of what it means to give you consent, and that means they're going to get calls from you at that number. And they have to unambiguously agree to receive those calls at the number. Now, what does unambiguously agree mean? That's like, so now you'll know I'm a lawyer, it depends, right? It depends. You have to figure it out all the time. However, the FCC did make clear that if you're talking about telemarketing and you're using auto-dialers or pre-recorded calls to wireless numbers, you must have written consent. You can't acquire the consent as a condition of the sale of goods or services. So you can't bury it in your sales contract. That's not going to be good enough. And no matter what you do, if there's a question about whether you have made an adequate disclosure or whether you have unambiguous consent, it's on you, not the consumer.

So just quickly, the synopsis of the rules is, if you are using auto-dialed or pre-recorded telemarketing messages to wireless numbers, or prerecorded messages to home numbers, you need written consent. Written consent does not mean necessarily a signature. It can be an email, it can be key press, it can be filling in a web form, it can be voice recording, any of those things. But it means something that is recorded and tangible and produceable. And then there's this category of other commercial calls. And those are not marketing calls and they're not mixed marketing and information calls, because those are marketing calls under the FCC's order. They are things like account information, customer service, collections, those kinds of things. Then you go into the unambiguous consent, whatever that means in the particular context that you're dealing with then. OK, so but of course, I have an established business relationship with this person. I've been calling them this way for years. The rules have always been, up until last year, that an established business relationship was an exception. In fact, the statute defines a unsolicited advertisement to exclude marketing messages to people that you have an established business relationship with.

Nonetheless, the FCC and the FTC agree that no matter what kind of relationship you have, if you are auto-dialing sending pre-recorded messages to wireless devices, forget about the existing business relationship. And just in case this isn't clear, text messages, MMS, all of that, is a call, is a message, for purposes of the TCPA. And of course, all right, so it's pretty complicated. What happens if you get it wrong? Well, here's the really bad news about the TCPA-- it has something called statutory damages, which means plaintiffs get paid up to $1,600 per call whether or not they've been harmed, right? Doesn't matter if there's any actual harm, it says $1,600 per call.

And the other thing is that there is a private right of action, which means you are not dependent on an agency to bring it. Any individual consumer can bring that claim. And where any individual consumer can bring that claim, there are plaintiff's attorneys who think it's a great thing.

So this is like, the hottest class action litigation of the year, and it's increasing very, very quickly. Heartland, on behalf of its franchisees, actually settled a case for $47 million, and that's before they got to litigation. There are a couple of other cases, and many that are sort of percolating through. But it apparently is the fastest growing and most popular source of class action litigation. So, OK, that's bad. What should you do? Well, the Seventh Circuit, in its case where it said the called party is best subscriber at the moment, said well, OK, there, it's easy. There are lots of good things that you can do, that telemarketers can do, to take care of this.

For example, they can call everybody manually first, and then use an auto-dialer after the first call. Well, it's not actually accurate, because if their telephone number changes next week and you've called them last week, you're just right back in the soup again. So this is not going to solve your problem. You can use a reverse look up to identify the current subscriber for the cell number. Well, yes, that's going to be as good as the reverse look up is. Or third, you can get the advertiser, if you happen to be an agency or a call center, to indemnify you. I'm sure that's a thrilling piece of information for all the advertisers in the audience.

So there are some more helpful solutions, and Neustar provides, as Dennis mentioned, there are some really good compliance products coming into our product bundle that use continuously updated and highly accurate phone data that gets updated multiple times per minute that will tell you instantly whether the number that you're calling is a m line or a wireless number.

It will tell you whether the subscriber name that you have matches. It will update, you can update the information that you have about a subscriber, and you can import updated address and phone information. And I'm sure you could probably find out all kinds of demographic stuff about them in addition to that outside of this. So this is the only way to really protect yourself, is to use continuously updated phone data. Otherwise, you're likely to get into trouble.

Now there are a couple of other things that the rule did but I wanted to stop now, because I think this is the most important part of the change, and ask question. Are there questions? Anybody have questions or comments? Yes? [INAUDIBLE]

Yes, it does, if they're marketing messages, but not if it's informational messages. And the TCPA applies to any person that calls somebody in the United States. Yes? [INAUDIBLE] If you get express written consent from an individual, they give you their phone number, you call them immediately, but that's not their phone number, you are in violation and that express consent is only good for the phone number that they did not to you, of which they are the subscriber?

Well actually, under those circumstances, you don't have express consent. So there's no credit for being a good guy here. It's, if you call the wrong person. Now, if they gave you consent to call a number that they don't own, that's not going to be consent, that's good enough. And if they gave you consent to call a number that they instantly change, you don't have consent to call the current subscriber to that number. OK, thanks. Yes?

[INAUDIBLE] Spouse as the official subscriber, but the other spouse is the person who filled out a form. How does that work out? So it'll be, in shared places, it's the sort of, are you part of the household that, and you answer the phone. So if the subscriber is the husband and the wife answers the phone, that OK. And it's also probably OK if, you know, somebody hands their cellphone to their friend. You're not going to get dinged for calling that. Now typically, you couldn't call a husband on his wife's wireless because typically, the subscribers are individual there. But it'll depend on what the numbers are. Yes? Can you elaborate a little bit more on the consent? You said there's a number of different forms of consent that you can get. Even sort of possibly alluded to just a check box. Is that an accurate form of consent?

If it memorializes the fact that you've disclosed the consequences of giving that consent and that they've unambiguously agreed. So essentially, any method that memorializes those two things. Now the trick is, what does that mean? What's going to be disclosure that adequately tells people what the consequences are, that they're going to get more calls, and provides unambiguous agreement.

And this is the hardest-- the hardest thing in consumer protection privacy marketing all across the board. And the FTC, which enforces this, basically takes the position that if something is going to surprise consumers, if they're not going to be, sort of, it's not in the general knowledge but something is going to happen as a consequence, then you have to call it out and you have to be in their face about it. So a check box that says, yes, you can call me at my mobile number, and then there's a check box there, that's going to be OK. But there's no hard and fast standard here.

Both the FTC and the FCC are very aggressive when there's a cost to consumers in here because if you're eating minutes, there's going to be a cost to consumers. So you probably need to get in their face pretty clearly. Other questions? Yes? [INAUDIBLE] verbally on the phone, if they contact you or if you're on a service call. [INAUDIBLE] that do not have [INAUDIBLE] service calls [INAUDIBLE]. You can do service calls based on oral consent, other commercial calls. If they call you and you want to get their permission while they're on the line, then you need to record it. And that counts. So if you record the consent and they've called you. And the other thing is, just remember that the FCC has very clearly said, a mixed service promotional call is a promotional call. Others? Am I missing anybody? You mentioned that the prior business relationship doesn't have any impact on this. So does that mean that advertisers will need to go back and get consent from all their existing consumers in order to call them?

Well, the FCC takes the position that the prior business relationship, the existing business relationship, has never be adequate for pre-recorded or auto-dialed calls to wireless numbers, so that you've always needed written consent for those. So the question is, what's the quality of the content that you have? And you probably want to be paying attention to opportunities to enhance the quality of that consent if you can. Biggest thing is not to, if you've got the consent, not to get it wrong and call the wrong person going forward.

Because that's where the action is. You're more likely to get regulators going after you for the quality of the consent. But that's sort of really across the board. If you think about this, there's a long series of FTC enforcement cases with respect to email marketing where websites collected consent from people who came to the website. And I think that one was like, some kind of betting casino card game, and collected consents in the process of assigning people to use the website, and then sold those lists. And the FTC has basically said, that's not going to be good enough for CAN-SPAM permission. And it's exactly the same kind of thing.

You should be focused on getting in people's faces more. Yes, in the back? You said that this is for residential numbers. What if you're calling businesses who happen to have a mobile phone number?

It's any mobile phone, but you're unlikely to get in trouble in a business setting. But you can, and I have seen cases where small businesses use mobile numbers. They may or may not be registered to their business. The individual may be the subscriber. And there have been cases and complaints about that at the FCC. So you do, particularly in the small business context, have to be very careful about that.