Federal Communications Commission


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Federal Communications Commission

  1. 1. Federal Communications Commission Revisions to Telephone Consumer Protection Act Rules Background On July 3, 2003, the Federal Communications Commission released its Report and Order revising its Telephone Consumer Protection Act (TCPA) rules to provide consumers with several options for avoiding unwanted telephone solicitations. The FCC’s jurisdiction over telemarketing practices is significantly broader than the FTC’s. Unlike the FTC Telemarketing Sales Rule, the FCC’s telemarketing rules apply to any entity engaged in telemarketing activities targeted by the TCPA. The FCC plans to enforce activities and entities that fall outside the FTC’s reach, including airlines, financial institutions, insurance companies, and common carriers.1 In addition, the FCC has authority over purely intrastate, as well as interstate activities. The FCC rules constitute a floor, and thus would supersede all less restrictive state do-not-call rules. This means that the laws of those states containing newspaper exemptions to the DNC requirement are now preempted. However, more restrictive state laws may or may not be preempted, depending upon whether the state laws are inconsistent with the FCC’s rules. The FCC will consider any alleged conflicts between state and federal requirements and the need for preemption on a case-by-case basis. The FCC staff plans to work closely with the FTC to avoid duplicative enforcement actions and will negotiate a Memorandum of Understanding between the two agencies. The recently enacted Do-Not-Call Act requires the Commission to transmit reports to Congress within 45 days after the final rules are published in the Federal Register, and annually thereafter. The report will note, among other things, any remaining inconsistencies between the FCC and FTC rules. With the exception of the DNC, call abandonment, and caller ID requirements, the FCC rules will become effective 30 days after they are published in the Federal Register. Summary of FCC Rule Changes DO-NOT-CALL The FCC’s national registry will be maintained by the FTC and will become effective on October 1, 2003. Unless a newspaper has an established business relationship with, express written permission from, or a personal relationship with the consumer (e.g., the caller is a family member, friend or acquaintance of the called party), the newspaper or its telemarketing vendor is prohibited from calling consumers that register their telephone numbers—both residential and wireless—on the national list. The prohibition does not apply to business-to-business calls nor does the prohibition apply to calls for the purpose of conducting surveys, market research, since such calls do not fall within the definition of “telephone solicitation”. However, calls to 1 Congress has excluded tax-exempt non-profit organizations from the definition of telemarketing in the Telephone Consumer Protection Act. Thus, calls made by or on behalf of charitable or other non-profit entities are exempt from the national do-not-call and company-specific do-not-call rules.
  2. 2. encourage consumers to subscribe to the newspaper or place private party advertisements in the paper would be prohibited. Newspapers or their telemarketing vendors, who acting in good faith, place prohibited calls may fall within a safe harbor under which they would not be liable for failure to comply with DNC requirements, if they: (1) have established and implemented written procedures to comply with the DNC rules; (2) trained their personnel, and any entity assisting in their compliance, in the procedures established pursuant to the DNC rules; (3) have maintained and recorded a list of telephone numbers the newspaper may not contact; (4) have used and documented a process to prevent telemarketing to any telephone number on any list established pursuant to the DNC rules, employing a version of the DNC registry obtained from the administrator of the registry no more than three months before the date the call was made; and (5) made the call in error. Newspapers and their telemarketers may access up to five area codes in the national DNC list at no cost. Others will be assessed an annual fee based upon the number of area codes requested. Although the DNC list will be updated continuously, newspapers and their telemarketers will be required to update their lists at least quarterly. However, they will have unlimited access to the DNC list for up to a year, once the annual fee is paid and may download newly added phone numbers on a constant basis. ESTABLISHED BUSINESS RELATIONSHIP An established business relationship is a prior or existing relationship formed by a voluntary two-way communication between the newspaper and a consumer on the basis of the consumer’s purchase or transaction with the newspaper within eighteen months immediately preceding the date of the telephone call or on the basis of the consumer’s inquiry or application regarding products or services offered by the newspaper within three months immediately preceding the date of the call. The EBR remains as long as the consumer does not ask to be placed on the newspaper’s specific DNC list. At that point, the EBR is terminated for purposes of telephone solicitations, even if the consumer still remains a newspaper subscriber or advertising customer. The newspaper or its telemarketer must honor a company-specific DNC request within a reasonable time of the request, not to exceed 30 days. In addition, the DNC must be honored for five years from the time the request is made. The EBR is not limited by product or service. Thus, a newspaper’s circulation department may rely upon the EBR exception to call a consumer who has placed classified ad in the newspaper, but is not a current subscriber. The FCC recognizes that many companies offer a wide variety of services and products and that a consumer should not be surprised to receive a telemarketing call from that company, regardless of the product being offered. A newspaper’s telemarketing vendor may rely on the newspaper’s EBR to call an individual consumer to market the newspaper’s services and products. However, the newspaper may not rely upon a consumer’s EBR with the third party telemarketer, merely because the newspaper has a contractual relationship with that telemarketer. 2
  3. 3. AUTOMATED TELEPHONE DIALING EQUIPMENT Predictive dialers fall within the statutory definition of “automated telephone dialing equipment”, since they have the capacity to store or produce numbers and dial those numbers at random. In addition to the statutory prohibition on using autodialers to dial emergency numbers, health care facilities, telephone numbers assigned to wireless services and any other numbers for which the consumer is charged for the call, the FCC’s amended rules prohibit so-called “war dialing” (i.e., ringing a telephone for the purpose of determining whether the number is associated with a fax or voice line). ARTIFICIAL OR PRERECORDED VOICE MESSAGES The amended rule prohibits telephone calls to residences using artificial or prerecorded voice messages that include or introduce an “unsolicited advertisement”, unless the recipient has given prior express consent or has an EBR with the seller or telemarketer. Examples of messages that include or introduce an unsolicited advertisement would be dual purpose calls, such as those to inquire about a customer’s satisfaction with an already purchased subscription but motivated in part by the desire to ultimately sell additional goods or services or prerecorded messages that contain free offers and information about goods and services that are commercially available to consumers. Thus, newspapers without an EBR or the prior express consent of the recipient should not deliver such prerecorded messages. This amended rule differs from the FTC’s amended rule which prohibits prerecorded messages even to customers having an established business relationship. All prerecorded messages, whether delivered by automated dialing equipment or not, must identify the name of the business or entity that is responsible for initiating the call, along with the telephone number of the business or entity. The legal name of the business should be given, even if the newspaper gives its “doing business as” name, and the telephone number stated in the message should be one that a consumer can use during normal business hours to ask not to be called again. ABANDONED CALLS Newspapers and their telemarketers must ensure that any technology used to dial telephone numbers, whether or not predictive dialers, abandons no more than three percent of calls answered by a person, measured over a 30-day period. A call will be considered abandoned if it is not transferred to a live sales agent within two seconds of the recipient’s completed greeting. Newspapers or telemarketers must allow the phone to ring for fifteen seconds (four rings) before disconnecting an unanswered call. Newspapers or their telemarketers using predictive dialers must maintain records that provide clear and convincing evidence that the dialers used comply with the three percent call abandonment rate, “ring time” and two-second transfer rule. Calls disconnected because they were never answered (within the required 15 seconds or four rings) or because they received busy signals will not be considered abandoned. When a telemarketer abandons a call under the three percent rate allowed, the telemarketer must deliver a prerecorded message containing the legal name of the business or entity initiating the call, as well as the telephone number of the business or entity and must state that the call is for “telemarketing purposes.” The call abandonment rules will become effective on October 1, 2003. 3
  4. 4. CALLER IDENTIFICATION The FCC, like the FTC, requires all sellers and telemarketers to transmit caller ID information, regardless of their calling systems. Entities engaged in telemarketing are prohibited from blocking the transmission of caller ID information. Caller ID information must include the telephone number, and when available by the telemarketer’s carrier, the name of the telemarketer. This provision goes into effect on January 29, 2004. UNSOLICITED FACSIMILE ADVERTISEMENTS The amended rule will require any entity transmitting an unsolicited fax advertisement to obtain the prior express invitation or permission of the recipient in writing and with the recipient’s signature. The recipient must clearly state that he or she consents to receiving the faxed advertisements from the company to which permission is given, and provide the individual or business’s fax number to which faxes may be sent. The existence of a prior business relationship will no longer be sufficient to show that an individual or business has given their express permission to receive unsolicited facsimile advertisements. One way to obtain the requisite permission would be to request a fax number on a non-promotional facsimile, for example an application form or a proof of an order, and include a statement indicating that, by providing the fax number, the individual or business agrees to receive facsimile advertisements from that company. If the recipient returned the form with a signature, that statement would constitute the necessary prior express permission to send facsimile advertisements to that individual or business. Permission cannot be in the form of a “negative option”. For example, a company does not have the requisite permission if it sends a facsimile advertisement containing a telephone number and an instruction to call if the recipient no longer wishes to receive such faxes. Similarly, facsimile requests for permission to transmit faxed ads, including toll-free opt-out numbers would violate the rule. The prohibition applies to faxes sent to personal computers equipped with or attached to modems, to computerized fax servers, and to telephone facsimile machines. However, the prohibition does not extend to facsimile messages sent as email over the Internet. Fax broadcasters, who transmit other entities’ advertisements to a large number of telephone facsimile machines, will be liable for an unsolicited fax if they are involved to a high degree or have actual notice of an illegal use of the transmission. For example, fax broadcasters who create or maintain the lists of facsimile numbers or who review or assess the content of a facsimile message would be held responsible. Fax broadcasters that demonstrate a high degree of involvement in the transmission of the facsimile advertisement must be identified in the header of the facsimile, along with the identification of the sender. Adequate identification in the header must include the name under which the sender and/or fax broadcaster is officially registered to conduct business, even though use of a “doing business as” name or other widely recognized name is permissible. (NAA is preparing a more comprehensive compliance guide that will cover both the FCC and FTC amended telemarketing rules. We plan to have the guide available for distribution within a few weeks.) 4