ACA Int'l v. FCC

Last Friday, March 16, the D.C. Circuit published its significant decision in ACA Int'l v. FCC regarding, among other things, what an autodialer (ATDS) is.  While the appeal involved 4 separate issues, the industry prevailed on 2 of the 4 - the more important 2 in our view: autodialers and reassigned numbers.  Before you get too excited, the D.C. Circuit did not invalidate the general prohibition on autodialing cells without consent.  Rather, it set aside the FCC's overly broad "capacity" ATDS definition.  The Court's primary argument was that under such a standard, every smartphone would be an autodialer because they could all potentially be used to download autodialing apps.  This was the same argument our industry made when the FCC order was published in July of 2015.  The Court agreed, stating this would create an "unreasonable and impermissible standard."  The rule remains, however, that you may not use an autodialer to call/text a cell phone without consent.  So nothing about this new decision expressly allows us to use a predictive dialer to cold call cells.  Individual courts will now need to look back at the statute and decide whether they believe the language covers predictive dialers or not - some will find in our favor and some will not.  It is very possible that the new leadership at the FCC will make further positive changes to ATDS standards, now that the D.C. Circuit has ruled. Companies will need their calling systems re-reviewed at this time to ensure they have no significant ATDS exposure, despite this ruling.  It will, no doubt, be easier going forward to establish that manual calling systems are not autodialers merely because they could potentially be upgraded to have ATDS capacity.  This is a very welcome legal development.  We will publish more on the other 3 issues involved in the appeal in the coming days: reassigned numbers, consent revocation, and the scope of the healthcare exemption.  There is not room to address all of these issues here, especially where other important legal updates need to be made today as well (below). This is a major breakthrough in the telemarketing industry. Schedule a consultation with a telemarketing attorney if you'd like to discuss it further. Learn more about telemarketing compliance, telemarketing regulations, ATDS definition, and autodialer laws.

Feature Films For Families Settles FTC Case Involving Alleged DNC Violations

In 2016, a federal jury found that three Utah-based companies had illegally called more than 117 million consumers to pitch movies - equating to a potential fine over 1 trillion dollars.  Last week, the defendants agreed to voluntarily settle the case (already had verdict but no judgment) against them. The final stipulated judgment imposes a $45.5 million civil penalty, of which the defendants will only be required to pay $487,735 unless they are found to have misrepresented their financial condition. This is a lot better than a trillion dollars, of course.  Read the FTC's press release here. Learn more about cell phone telemarketing laws and do-not-call regulations.

FTC Shuts Down Cryptocurrency Promoters

The FTC has obtained a court order shutting down a defendant for allegedly promoting deceptive money-making opportunities involving cryptocurrencies. The FTC's complaint alleges that the defendants, "promoted chain referral schemes known as Bitcoin Funding Team and My7Network. Using websites, YouTube videos, social media and conference calls, the defendants allegedly promised big rewards for a small payment of bitcoin or Litecoin."  The complaint continues to allege that, "the structure of the schemes ensured that few would benefit. In fact, the majority of participants would fail to recoup their initial investments." Read the FTC's press release here.

10th Circuit Court of Appeals Rejects TCPA Coverage for Dish Network

You may recall that in June of 2017, Dish Network was hit with a $280 million fine for Do-Not-Call list violations. Dish Network argued that its insurance carrier, ACE American Insurance Company (ACE), should have covered such "damages" under their general liability policy. Unfortunately, a Colorado District Court held that ACE had no duty to defend Dish Network, as the fine falls under the category of uninsurable  "penalties" and not "damages." On February 21st, the 10th Circuit of Appeals affirmed that decision. Read the full decision here. Contact a TCPA attorney if you are faced with a similar situation. Consider having a telemarketing lawyer perform a telemarketing audit of your call center business.

Petition to FCC Hopes to Change Certain Health Care Fax Rules Under the TCPA

A new petition has been filed with the FCC by Inovalon, Inc., a healthcare data and technology company. The petition asks the FCC to declare two things:

1. Faxes sent by a health insurance plan’s designee to a patient’s medical provider, pursuant to an established business relationship between the health plan and provider, requesting patient medical records are not advertisements under the TCPA; and
2. Faxes that offer the free collection and/or digitization of patient medical records, and which do not offer any commercially available product or service to the recipients are not advertisements under the TCPA.

Read a copy of the petition here. Learn about telemarketing rules and telemarketing compliance. Contact a telemarketing attorney or TCPA lawyer if you need additional legal counsel.

Telephone Dialing System Found Not to be an ATDS

In Ferrer v. Bayview Loan Servicing, LLC, plaintiff Maria Ferrer alleged, among other things, that Bayview used an ATDS to call her cell phone 44 times. The Southern District of Florida has found that the system used by Bayview to make the calls to the plaintiff was not an Automatic Telephone Dialing System (ATDS) because it requires call-by-call human intervention. The system used by the defendants was the Avaya X1 platform. Read the court's order granting summary judgment in favor of the defendants here. Learn more about the ATDS definition and Robocall laws.

Zacks Investment Research Inc. Settles TCPA Class Action Settlement

Zacks Investment Management Inc. (Zacks Investment) has agreed to settle a TCPA class action lawsuit for $5.38 million. The plaintiffs in the case alleged that Zacks Investment and their marketing partners made unsolicited calls to consumers in order to sell books and seminar tickets. They also allege that Zacks Investments recorded calls with California consumers without their consent, which is a violation of the California Invasion of Privacy Act. Marketers should make sure that they have the proper consent to make and record marketing phone calls to consumers. Read more here. Contact a telemarketing attorney or TCPA lawyer if you need additional legal consulting to help with the TCPA lawsuit you are facing.

Florida Bill Would Classify Ringless Voicemail Drops as Telephone Solicitations

A proposed Florida bill would regulate ringless voicemail by expanding the definition of a "telephonic sales call" to include "voicemail transmissions." As defined in the bill, "voicemail transmissions" are "technologies that deliver a voice message directly to a voicemail application, service, or device." Read the full text of the bill here. Learn about additional telemarketing rules and telemarketing regulations.

Talent Search Firm in Trouble for Alleged COPPA Violations

The FTC has filed a complaint against online talent search firm Explore Talent for allegedly violating the Children's Online Privacy Protection Act (COPPA). The complaint states that Explore Talent would allow children under the age of 13 to create accounts without the proper parental consent. To create an account, the children were also asked to provide information about their body type and to upload a picture of themselves onto the website. The FTC's order imposes a $500,000 fine on Explore Talent, which could be suspended based on their inability to pay. Read the FTC's release about this issue here.

Iowa Bill Would Impose $40,000 Fine on Caller-ID Spoofers

Iowa State Senator Ken Rozenboom has introduced a bill that would impose a civil penalty of up to $40,000 upon businesses that are believed to be using caller-ID "spoofing" tactics. Caller-ID spoofing is when the caller uses technology to make a local or familiar number appear on a call recipient's caller-ID. Last year, the FCC proposed a $120 million fine against a company that allegedly used this tactic. Telemarketers should only display numbers that they actually own. Read a local news story about the Iowa bill here.  Learn about telemarketing rules and consider signing up for an online telemarketing compliance course.

Telemarketing is Number One Consumer Complaint in Wisconsin

The Wisconsin Department of Agriculture, Trade and Consumer Protection has announced that unwanted telemarketing calls were the number one consumer complaint that residents of the state had during 2017. This is also the case at the national level, and likely in most states. Telemarketing complaints totaled nearly four times as many as the next highest category. Regulatory enforcement at both the State and Federal levels is complaint driven. Telemarketing businesses should make reducing and resolving consumer complaints a priority. Read a local news story about the announcement here. Learn about state by state telemarketing compliance. For example, make sure you understand state telemarketing license and telemarketing bond requirements. Learn more about FCC telemarketing laws, cell phone telemarketing laws, and do-not-call regulations. Contact a TCPA lawyer if you would like help understanding telemarketing regulations.

FTC Obtains Court Order Against Alleged Business Coaching Scheme

At the request of the FTC, a federal court has halted operations of a business that allegedly misrepresented its business coaching program and took over $14 million from consumers. According to the FTC's complaint, "The defendants induced consumers to pay for a series of tiered memberships with increasing fees, falsely claiming that consumers would learn how to make substantial income with an online business. They promised consumers they would receive individualized coaching from successful marketers that would provide what they needed to build a successful business, but, in reality, these were merely salespeople selling higher membership levels in the defendants’ program." Read the FTC's press release here.

Serial TCPA Plaintiff Has Received Over $800K In Settlements

A Forbes article published this week discusses a recent TCPA settlement between serial litigator Jan Konopca and FDS Bank. The article states that before this suit, Konopca had filed 30 other TCPA suits and received over $800,000 from settlements in those cases. Konopca owns three phone numbers, one of which was originally a landline but was transferred to a cell line after he claimed squirrels chewed through the line's wires. Konopca is one of thousands of serial litigators who have filed multiple TCPA cases. Some serial plaintiffs seem to invite calls by obtaining multiple phone lines. Read the full article here. Conact a TCPA lawyer if your business is being sued in a TCPA case. Mitigate the risks of facing such a case by understanding telemarketing compliance, robocall laws, cell phone telemarketing laws, Do-Not-Call regulations, and autodialer laws.

Ninth Circuit Exonerates Business That Purchased Leads From Alleged TCPA Violator

The Ninth Circuit Court of Appeals has ruled that Click Media cannot be held liable for TCPA violations for purchasing a lead that was allegedly generated illegally. Click Media was several levels removed from the generation of the lead and had no way of knowing that a violation had taken place. The lead was allegedly illegally generated by AC Referral. According to the Court's opinion:
"[Plaintiff] Kristensen points to the fact that Click Media’s contract with AC Referral stated that AC Referral could use text message marketing and required AC Referral to comply with the TCPA. According to Kristensen, this was sufficient to trigger Click Media’s duty to investigate whether AC Referral was acting in compliance with law. We disagree. The knowledge that an agent is engaged in an otherwise commonplace marketing activity is not the sort of red flag that would lead a reasonable person to investigate whether the agent was engaging in unlawful activities. Because Click Media had no 'knowledge of facts that would have led a reasonable person to investigate further,' Click Media cannot be deemed to have ratified AC Referral’s actions and therefore is not vicariously liable." 
Read the full opinion here. Learn more about vicarious telemarketing liability. Telemarketing rules and telemarketing regulations are complex. Contact a telemarketing attorney to telemarketing compliance support and telemarketing compliance audits.

FCC Issues Final Rule Regarding Recent Efforts to Reduce Illegal Robocalls

The FCC has issued a final rule regarding recent efforts to allow voice service providers to take action to reduce illegal robocalls. Specifically, this rule allows providers to "proactively block telephone calls when the subscriber of a phone number requests that calls purporting to originate from that number be blocked, and when calls purport to originate from three categories of unassigned phone numbers: Invalid numbers, valid numbers that are not allocated to a voice service provider, and valid numbers that are allocated but not assigned to a subscriber." Read the full rule here. Learn about robocall laws and robocall regulations. FCC telemarketing laws are complex, so contact a telemarketing attorney to ensure you understand all telemarketing regulations.

Court Affirms Decision That Flu Shot Reminder Text Didn't Violate TCPA

The Second Circuit Court of Appeals has affirmed a 2016 decision made by a district court in Latner v. Mount Sinai Health Sys. that a text message sent to remind Latner about getting a flu shot did not violate the TCPA. The text sent by Mount Sinai said, "It's flu season again. Your PCP at WPMG is thinking of you! Please call us at 212-247-8100 to schedule an appointment for a flu shot." Latner had previously provided his number to Mount Sinai and consented to receive messages for "Treatment Purposes." The Court of Appeals held that this message would fall into that category, and thus no violation of the TCPA had occurred. Read the court's decision here. Learn about telemarketing rules and telemarketing compliance. Contact a TCPA lawyer if you need help defending yourself from a TCPA lawsuit.

Charitable Telemarketing Under Criticism

An article published in the New Haven Register highlights some problems that charitable telefunding companies can potentially face. The article discusses a recent complaint filed by the Ohio Attorney General against The Ohio Cops for Kids, a charity that helps children whose families were victims of crime. The complaint alleges that just two percent of the funds raised by the charity went to help victims and that the charity was defrauding consumers. The Ohio Cops For Kids had hired a for-profit telefunding company to make calls and ask for donations. Read the article here. Read about charitable telemarketing laws.

InfoCision Settles FTC Charges for Violations of TSR

InfoCision, Inc., an Ohio-based telefunding company, has settled charges with the FTC for allegedly violating the FTC's Telemarketing Sales Rule (TSR). The TSR requires telemarketers calling on behalf of a charity to promptly disclose which charity they are calling for and state the the purpose of the call is to ask for a donation. The FTC charges state that, "InfoCision’s telemarketers called consumers and told them at the start of the call that they were not calling to ask for a donation." The settlement includes a  $250,000 civil penalty against the defendant, and requires that they no longer make any "false or misleading statements designed to induce anyone to pay for goods or services or make a charitable contribution." Read more here. Learn more about nonprofit telemarketing regulations.

Ohio Court Grants Motion to Stay Class Discovery in TCPA Case

Plaintiff Ken Johansen filed a lawsuit against National Gas & Electric LLC for alleged violations of the TCPA. Johansen claims that he was called by the defendant on three different occasions during June of 2017, even though his number was on the national Do-Not-Call list. On December 20, the court granted the Defendant's motion to stay class discovery, citing that Johansen had "posed" as an interested customer in order to find out more information about National Gas & Electric. The opinion states, "The court finds that the admissions of plaintiff in his affidavit and response brief cast serious doubts on his fitness to serve as an adequate class representative." Read the full opinion here. If you or your business are facing a TCPA class action lawsuit, make sure you have a TCPA lawyer on your side. Save yourself headaches like this by understanding and applying telemarketing compliance principles. Make sure you understand DNC regulations, autodialer laws, cell phone telemarketing laws, robocall laws etc. A telemarketing lawyer can even perform a telemarketing compliance audit of your company, which can help you avoid plaintiffs and regulators.

FTC Offers MLM Guidance

The FTC has published an 18-point online guidance document to help Multi-Level-Marketing (MLM) business owners understand and comply with the many laws that affect that industry. Topics cover compensation structure, similarities and differences between MLMs and business opportunity organizations, inventory loading, etc. Read the guidance document here.

FTC Fines Company For COPPA Violations

The FTC has filed a complaint against VTech, an electronic learning products company, for alleged violations of the Children’s Online Privacy Protection Act (COPPA). According to the complaint, VTech allegedly made false claims about the encryption that is used on their website to protect consumer data. Also, VTech allegedly "Failed to provide sufficient notice on its website about the information it collects from children, how it uses that information, and its disclosure practices." Read the full complaint here.

FTC Releases DNC Report

The FTC has published its biennial report on the National DNC Registry.  Below are some of the more significant findings:

• Over 2,000 businesses and other entities paid more than $12.6 million to access the registry during fiscal year 2017.
• When the DNC Registry was implemented in 2003, 10 million numbers were added within the first four days.
• As of September 30, 2017, the registry included nearly 230 million numbers.
• The FTC is tracking new direct marketing technologies and analyzing how they have led to an increase in DNC related consumer complaints.
• The top six categories that consumers file DNC complaints about are: 1) Reducing Debt 2) Dropped call or no message 3) Vacation and timeshares 4) Warranties and protection plans 5) Calls pretending to be government, businesses, or family/friends and 6) Medical and prescriptions.

Learn more about DNC regulations, Do-Not-Call laws, telemarketing compliance, and cell phone do-not-call laws. Consult with a telemarketing attorney to learn how to reduce complaints about your business.

FTC Cases Resulted in Over $6 Billion in Refunds Between July 1, 2016 and June 30, 2017

On December 22nd, the FTC announced that over $6 billion had been paid out in consumer refunds as a result of the actions that the agency had taken against businesses between July 1, 2016 and June 30, 2017. This doesn't include judgements that have been suspended based on the defendants' inability to pay. Read the FTC press release here.

Hooters TCPA Settlement Claims Period Ends

The settlement claims period for a TCPA class action lawsuit against the restaurant chain Hooters has closed. Hooters will now pay out $1.3 million in gift cards to class members. In August 2017, Hooters agreed to settle the lawsuit, which was filed by plaintiff Michael Etzel. Etzel alleged that Hooters had sent unsolicited text messages to at least 55,000 individuals. The text messages allegedly said, "Hooters Fans: Our mClub has moved! Don’t worry, you’ll still receive exclusive news, just from a new number. Reply STOP to unsubscribe Msg&Data Rates may apply." Although they had proper opt-out language, the plaintiffs alleged that Hooters never obtained the proper consent to send the messages in the first place. If your company does any text marketing, make sure you have proper, well-documented consent in order to avoid headaches like this. Read more about the settlement here. If you are facing a TCPA class action, make sure you have a telemarketing attorney or a TCPA lawyer on your side. Learn about cell phone telemarketing laws.