Changes to New York Call Recording Laws

On Monday, August 21st, New York Governor Andrew Cuomo signed a bill that will require all-party consent for the recording of outbound telemarketing calls. This bill will start to be enforced immediately. Prior to this, New York was only a one-party consent state for outbound telemarketing calls, but now marketers will be subject to this new regulation. Read the full text of the bill here. Learn more about outbound telemarketing compliance. There are also a number of other telemarketing rules to be aware of before you start any telemarketing campaign.

Court of Appeals Affirms that LA Lakers Basketball Team is not Entitled to TCPA Coverage

Last Wednesday, the Ninth Circuit Court of Appeals affirmed that the Los Angeles Lakers basketball franchise is not entitled to insurance coverage for violations of the TCPA. A class action lawsuit was filed against the Lakers after they allegedly sent unauthorized marketing text messages to fans that provided their phone numbers as part of an in-game promotion. The Lakers sued their insurance provider after they denied them coverage for TCPA violations. Read more about this story here. Learn more about telemarketing to cell phones.

Federal Judge in Illinois Rules that Human Call Initiator is not an ATDS

In Arora v. Transworld Systems Inc., Plaintiff Ashok Arora alleged that Transworld Systems Inc. (TSI) made 12 unsolicited calls to his cell phone using an autodialer. TSI filed a motion for summary judgement, arguing that their system requires call by call human intervention and therefore is not considered an autodialer under the TCPA. The Court granted TSI's motion. Read a copy of the opinion here. What else is important to know about autodialer compliance? What is an autodialer?

FTC Announces Refunds to Victims of Alleged Tech Support Scheme

The FTC announced today that they will be sending out notices to consumers who are eligible for a partial refund from Advanced Tech Support (ATS). According to the FTC complaint, ATS allegedly "used high-pressure sales pitches to market tech support products and services by falsely claiming that people’s computers were infected with viruses and malware." The defendants have agreed to settle with the FTC and pay out $10 million in refunds. Read the full press release here.

Court of Appeals Rules in Plaintiff's Favor in Significant Robins V. Spokeo Case

In a case that has been closely monitored by many in the direct marketing industry, the Ninth Circuit Court of Appeals stayed true to its original decision and reversed the district court's dismissal of Robins's allegations against Spokeo. This case had made it to the U.S. Supreme Court where it was remanded after a ruling was given that the 9th Circuit Court had failed to show enough evidence for concrete injury.

Robins alleged that Spokeo willfully violated the Fair Credit Reporting Act (FCRA) and caused him concrete injuries for the purposes of Article III standing, which requires that there be an injury that is "real" and not "abstract" or merely "procedural." This specific allegations in this case were that Spokeo published an inaccurate report about Robins on it's website.

On remand, the panel of the 9th Circuit Court stayed true to its original decision and held that "Robins alleged inaccuracies by Spokeo concerning his age, marital status, educational background, and employment history that could be deemed a real harm to his employment prospects." Additionally, the panel rejected Spokeo's argument that Robins's allegations of harm were "too speculative to establish a concrete injury."

This case is significant for the direct marketing industry because as the number of TCPA plaintiffs continues to increase, a favorable ruling for Spokeo would establish case precedenct that will potentially help defendants argue that plaintiffs aren't suffering from any real or concrete injury from simply receiving an unwanted phone call. Read the full opinion here. Avoid headaches like the one Spokeo is facing by investing in telemarketing compliance beforehand. Consider having a telemarketing attorney perform a telemarketing compliance audit of your company.

Fees to Access National DNC List to Increase

The fees for telemarketing businesses to access the National Do Not Call Registry will increase in FY 2018. The Do-Not-Call Registry Fee Extension Act of 2007 calls for a periodic reevaluation of the fees. In FY 2018, telemarketers will pay $62 per area code, which is an increase of $1 from FY 2017. The maximum fee for all area codes nation wide will increase from $16,714 to $17021. Telemarketers will still be able to get the data for their first five area codes for free. Read more about this change at the link below. Learn more about Do Not Call Compliance and calling cell phones on the Do Not Call list.

FTC Shuts Down Alleged Work-at-Home Scheme

Bob Robinson and his companies have been charged by the FTC with allegedly violating the FTC Act and the FTC's Business Opportunity Rule. The Rule requires business opportunity sellers make certain disclosure when they communicate with consumers to help them evaluate the opportunity. It also requires that they substantiate any money-making claims. The FTC complaint alleges that Robinson falsely made promises to customers they could earn thousands of dollars by working from home without any additional skills or training.  Read the full complaint here.

Two new FCC commissioners confirmed

On August 3, 2017, the Senate confirmed new FCC commissioners Jessica Rosenworcel (D) and Brendan Carr (R). The vote to reconfirm commissioner and chairman Ajit Pai was delayed, as the Senate will likely wait until after the August recess due to democratic opposition to his reappointment.

Court of Appeals affirms summary judgement in favor of defendant in TCPA case

In Jones v. Royal Administration Services, the court of appeals held that "Royal Administration Services, Inc., could not be held vicariously liable for telemarketing violations under the TCPA for several phone calls made by telemarketers employed by All American Auto Protection, Inc., because the telemarketers were independent contractors and therefore did not act as Royal’s agents, as defined by federal common law." Read the full opinion here.

 

Court rules that texts sent to finalize transaction do not violate TCPA

In a recent district court decision, it was ruled that a text message sent to a cell phone in order to complete a transaction was not considered telemarketing. In Wick v. Twilio Inc., Plaintiff Noah Wick alleged that he received an unsolicited text message after he tried to order a free sample of a dietary supplement on a website. He received a text stating that his order was incomplete, and he needed to follow a link to finalize and place the order. The defendant filed a motion to dismiss, arguing that the plaintiff had initiated the transaction and provided his phone number as part of that process. The court agreed with the defendant's argument, ruling that the text messages were not telemarketing and that the plaintiff's provision of his cell phone number constituted telemarketing consent under the TCPA. Learn more about telemarketing to cell phones.

 

Kari's Law

The U.S. Senate recently passed "Kari's Law," which would require the ability to direct dial 911 on multi-line systems that are commonly used at hotels and large offices. Learn more about Kari's Law here.

FTC to increase frequency of robocall reporting, New FCC Fine

Last week, the FTC announced that they will be increasing the frequency that they report phone numbers suspected of being used to make illegal robocalls. The FTC receives more consumer complaints about unwanted robocalls than any other category. Nearly two million of these complaints have already been filed in 2017. In last week's announcement, the FTC stated that when they receive complaints about robocallers, the corresponding phone numbers will be reported daily to telecommunications carriers and other organizations that are working to block illegal robocalls. This change will make it even more important for businesses that use prerecorded voice messages to do everything they can to avoid and quickly resolve consumer complaints. Learn more about robocall laws.

FCC proposes $82 million fine for alleged spoofed robocalls

Just weeks after the FCC issued a $2.88 million fine against a company for allegedly making millions of robocalls using technology that enabled caller ID spoofing, a much more significant fine of $82 million has been proposed against Best Insurance Contracts for allegedly making 21 million calls using similar technology. Based on consumer complaints, the FCC subpoenaed the call records of Best Insurance Contracts and verified that the spoofed calls were made. Business owners should do everything they can to resolve consumer complaints on their own before the consumer decides to send those complaints to federal agencies. Examples of best practices include only calling with proper consent, only displaying caller ID information for numbers that the business does own, scrubbing against national and state DNC lists, and honoring all opt-out requests. Learn how to follow other telemarketing rules and set proper telemarketing compliance goals.

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.