What about all the businesses we don't hear about because they aren't getting sued?

We normally only hear about the compliance horror-stories.  Each week for the last several months, there has consistently been some brand in the news who was subjected to paying a large settlement or telemarketing fines.  Sellers, call centers, and even a small software dialer vendor, were all recent targets in significant lawsuits.  Companies who avoid the big lawsuits and fines don't normally make headlines in compliance articles.  However, to their credit, most brands in our space have avoided any significant trouble by adapting to rule changes and following basic telemarketing compliance principles.

Even in this highly regulated environment, the majority of our firm's clients appear to be prosperous, able to handle whatever compliance hurdles consumers and government throw their way.  While most of our clients receive the occasionally demand letter or subpoena, most of them have avoided being named in any significant class action or regulatory case.  How is this so?  The vast majority of federal and state telemarketing cases are filed based upon one of the following mistakes, all of which are avoidable: (1) autodialing cell phones without consent, (2) delivering prerecorded messages without consent, (3) marketing to individuals on the DNC lists without consent or EBR, and (4) failing to honor any opt out.  Additionally, while somewhat harder to consistently avoid, sales misrepresentations are also a leading cause of FTC and state regulatory action.

Most brands who have avoided trouble, seem to be doing at least the following:

• Using autodialers (ATDS) and prerecorded messages only with well documented, brand-specific consent;
• For those without such consent, they aggressively scrub out wireless numbers and document their related safe harbor qualifications;
• Scrubbing out numbers on the national and 12 state DNC lists, except when they have consent or an appropriate established business relationship (EBR);
• For brands that have some exemption from DNC and ATDS rules, they carefully research and document the same and obtain a formal legal opinion on the exemption before relying on it;
• Having solid policies and procedures in place to recognize and honor all out outs (internal DNC requests);
• Remaining constantly vigilant regarding consumer complaints and fixing errors immediately when discovered, especially for misrepresentation and refund related complaints;
• Performing some sort of professional TCPA litigator scrub - at least 1/3 of all TCPA cases are filed by someone who filed one before;
• Periodically performing an in-house or 3rd party telemarketing compliance audit of all major compliance areas of the business.  Over time, laws change, and sometimes even our own practices change without us noticing; and
• Auditing their vendors, instead of blindly trusting that they are in compliance.

European Union GDPR

On May 25, 2018, the EU's General Data Protection Regulation (GDPR) will start to be enforced. We will provide more information about the GDPR as that date approaches, but any company that does business into or out of the EU should review the changes that will take place to ensure they are prepared.

FCC Issues $2.88 Million Fine to Illegal Robocall Platform

On July 13, the FCC issued a fine against New Mexico based company Dialing Services for allegedly facilitating millions of robocalls to consumers' cell phones without the proper consent of the call recipients (What is prior express written consent?). The FCC formally warned Dialing Services in 2013. After continued investigation, the FCC determined that Dialing Services had not only continued the illegal robocalls, but also allegedly made calls using caller ID spoofing.

FTC Announces Bureau of Consumer Protection Process Reforms

FTC acting chairman Maureen K. Ohlhausen has announced several internal process reforms in the Bureau of Consumer Protection that are aimed at improving information requests and transparency in commission investigations. The process reforms include:

• Providing plain language descriptions of the CID process and developing business education materials to help small businesses understand how to comply;
• Adding more detailed descriptions of the scope and purpose of investigations to give companies a better understanding of the information the agency seeks;
• Where appropriate, limiting the relevant time periods to minimize undue burden on companies;
• Where appropriate, significantly reducing the length and complexity of CID instructions for providing electronically stored data; and
• Where appropriate, increasing response times for CIDs (for example, often 21 days to 30 days for targets, and 14 days to 21 days for third parties) to improve the quality and timeliness of compliance by recipients.

Both the FTC and the FCC regulate the telemarketing industry. Learn about new FCC rules and FCC telemarketing regulations.

FTC Returns Money to Victims of Vacation Prize Scheme

The FTC has mailed out nearly 55,000 checks totaling over $500,000 to consumers who paid travel company VGC Corp of America for vacation packages that were never fulfilled. In May 2011, VGC allegedly advertised a luxurious vacation package to consumers who called a toll-free number and answered a trivia question. The callers were told that they had won the vacation, but that they would be responsible for paying $400 in taxes and fees. The FTC complaint also alleged that the vacation packages were never delivered, even for consumers who ended up paying the $400. Under settlements with the FTC and the State of Florida, VGC has been banned from selling vacation packages and was required to pay out refunds. Click here for more information. Learn how to respond to an Attorney General if your company finds itself in a similar situation.

Canada Suspends Private Right of Action Provision in CASL

July 1, 2017 had been marked as a potential doomsday for many email marketers doing business in Canada. As part of Canada's Anti-Spam Legislation (CASL), consumers were to have a private right to sue for $200 per infraction (up to $1 million per day cap) starting on that date. On June 7, 2017, Canada's Innovation, Science and Economic Development Department published a press release announcing that the provision would be suspended: "Canadians deserve an effective law that protects them from spam and other electronic threats that lead to harassment, identity theft and fraud. At the same time, Canadian businesses, charities and non-profit groups should not have to bear the burden of unnecessary red tape and costs to comply with the legislation. The Government supports a balanced approach that protects the interests of consumers while eliminating any unintended consequences for organizations that have legitimate reasons for communicating electronically with Canadians."

 

New FCC Commissioner Nominations

President Trump has nominated Republican Brendan Carr and Democrat Jessica Rosenworcel to fill the commissioner vacancies on the FCC. If both are ultimately confirmed by the Senate, the leadership of the FCC will be as follows:

1. Ajit Pai (R) - Chairman
2. Michael O'Rielly (R)
3. Brendan Carr (R)
4. Mignon Clyborn (D)
5. Jessica Rosenworcel (D)

Ringless Petition Withdrawal

All About the Message LLC has withdrawn its FCC petition seeking a clarification that ringless voicemail complies with the TCPA. This is the second time a brand has petitioned the FCC on this issue but ultimately withdrawn the same before a decision was reached.