Here at TCPAland, we’ve recently mused about the potential for a new wave of TCPA litigation following recent court decisions suggesting that predictive dialers are no longer subject to the TCPA (Here) and (Here).
In light of these decisions, plaintiffs seem to be testing theories of relief under different provisions of the TCPA, one of which is for violations of the DNCR (also colloquially known as the “Do Not Call List.”) In new class actions against the Dallas Morning News and the Wall Street Journal, the plaintiffs have alleged that the defendant companies purchased phone number databases of consumer contact information and created their own electronic databases from which to make automated and unsolicited calls – to telephone numbers that appear on the DNCR – in violation of the TCPA.
What Is the DNCR and Why Does it Matter?
As faithful readers know, the Telephone Consumer Protection Act of 1991, enacted under the power of the Federal Communications Commission (“FCC”), was the first major federal legislation to regulate the telemarketing industry. In 2003, the TCPA was revised to coordinate with the Federal Trade Commission’s (“FTC”) Telemarketing Sales Rule (“TSR”). The TSR established the DNCR, which is maintained by the FTC.
The DNCR is a national list of phone numbers submitted by consumers who want to limit the number of telemarketing calls they receive. Consumers register their numbers on the DNCR either by calling 888-382-1222 from the telephone number the consumer wishes to register or by registering the number at www.donotcall.gov. Such do-not-call registrations must be honored indefinitely, or until the registration is cancelled by the consumer or the telephone number is removed by the database administrator. See 47 CFR 64.1200(c)(2).
If the telemarketer calls the consumer at a number on the DNCR twice during a 365 day period, the TCPA grants the consumer a private right of action to sue the telemarketer for the second call. And, the rule applies regardless of whether the call is placed manually or through an automatic telephone dialing system.
To Call or Not to Call, That is the Question.
The DNCR covers telemarketing and solicitation (collectively, “Telemarketing”) calls made to personal telephone numbers only. It does not apply to business-to-business calls.
Telemarketing is the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.
Under the TCPA, no person or entity shall initiate any [Telemarketing] to a residential telephone or wireless telephone subscriber who has registered his or her telephone number on the DNCR. See 47 C.F.R. §§ 64.1200(c)-(e). Unless, (1) the telemarketer has an established business relationship with the consumer whose number is being called, or (2) the telemarketer has the consumer’s written consent to be called.
The TCPA does not prohibit non-Telemarketing, informational calls. As a result, consumers may still lawfully receive political calls, charitable calls by or on behalf of tax-exempt non-profit organizations, debt collection calls, informational calls (i.e. school closings, airline travel updates, bank account fraud alerts) and telephone survey calls. See 47 CFR 64.1200(d)(7).
Great! I’m covered by an exception … Ah, not so fast, my friend.
Before initiating any call for telemarketing purposes to a residential telephone subscriber, the caller or the entity must first institute procedures for maintaining the opt-out list of persons who request not to receive Telemarketing calls made by or on behalf of that person or entity. See 47 CFR 64.1200(d).
In summary, at a minimum, the procedures must include: (1) a written policy for maintaining a do-not-call list, (2) training of personnel engaged in telemarketing about the existence and use of the do-not-call list, (3) recording of do-not-call requests contemporaneously with the request and, if the call is placed by a third party on behalf of another entity, and obtaining permission from the consumer to disclose the request to the entity or affiliated entity, (4) identification to the consumer of the individual caller’s information, the entity on behalf of which the call is being made and the telephone number or address where the caller or entity can be reached, (5) application to the particular business entity making (or on whose behalf a call is made), not to affiliates unless the consumer would reasonably expect it, and (6) record and maintain the consumer’s do-not-call request and honor the request for at least five years from the date made. See 47 CFR 64.1200(d)(1) – (6).
Established Business Relationship
We know that Telemarketing calls may be made to a consumer where there is an established business relationship (“EBR”) between the consumer and the caller. But, what constitutes an EBR, you ask? An EBR is:
A prior or existing relationship between a person or entity and a residential subscriber based on the subscriber’s purchase or transaction with the entity within the 18 months immediately preceding the date of the telephone call or on the basis of the subscriber’s inquiry or application regarding products or services offered by the entity within the three months immediately preceding the date of the call, and neither party has previously terminated the relationship. An individual may reasonably expect that an affiliate is included in an established business relationship based on products offered or the identity of the affiliate.
Even if there is an EBR, the consumer may opt out of certain calls, which requires companies to maintain internal do-not-call lists reflecting the names of consumers with EBRs who have requested to be excluded from telemarketing. Opt-out requests must be fulfilled in 30 days. Unlike DNCR registrations – which must be honored indefinitely – internal opt-out requests must be honored for five years. See 47 CFR 64.1200(d)(6).
Also, the consumer’s seller-specific opt-out terminates an EBR for the purposes of Telemarketing even if the consumer continues to do business with the seller/telemarketer. See 47 CFR 64.1200(d)(6)(i). A consumer’s established business relationship with a particular business entity does not extend to affiliated entities unless the consumer would reasonably expect the affiliates to be included given the nature and type of goods or services offered by the affiliate. See 47 CFR 64.1200(d)(6)(ii).
Telemarketers are allowed to call a consumer who has given their express written agreement to receive calls, even if the consumer’s number is in the DNCR. However, the written consent must give express agreement to receive calls placed by, or on behalf of, the seller. The writing must include the number to which calls may be made and the consumer’s signature, though the signature may be a valid electronic signature, if the agreement is reached online.
Keep in mind here that for TCPA purposes, the written agreement must include a clear and conspicuous disclosure informing the person signing that: (A) by signing the agreement the consumer authorizes the seller to deliver or cause to be delivered, to the signatory, telemarketing calls using an automated telephone dialing system or artificial prerecorded voice; and (B) the consumer is not required to sign the written agreement (directly or indirectly), or agree to enter such an agreement as a condition of purchasing any property, goods or services. See 47 CFR 64.1200(f)(8).
Safe Harbor (Stay with Me. This is Good News.)
Under 47 CFR 64.1200(c)(2)(i), there is a safe harbor for violations if the telemarketer can demonstrate that the violation was an error and that the telemarketer’s routine business practices include:
(A) Written procedures. It has established and implemented written procedures to comply with the national do-not-call rules;
(B) Training of personnel. It has trained its personnel, and any entity assisting in its compliance, in procedures established pursuant to the national do-not-call rules;
(C) Recording. It has maintained and recorded a list of telephone numbers that the seller may not contact;
(D) Accessing the national do-not-call database. It uses a process to prevent telephone solicitations to any telephone number on any list established pursuant to the do-not-call rules, employing a version of the national do-not-call registry obtained from the administrator of the registry no more than 31 days prior to the date any call is made, and maintains records documenting this process.
As discussed above, hopefully, all of our telemarketer-readers out there will fall under the safe harbor provision because before placing the call they already had procedures in place that met the minimum standards described in 47 CFR 64.1200(d)(1) – (6).
Actually, there are a few catches.
With respect the DNCR, the law requires telemarketers to search the DNCR every 31 days and avoid calling any registered number. The telemarketer must also obtain a separate subscription for each area code that it wants/needs to search. There are 26 area codes in California alone.
It is also against the law for a seller or telemarketer to call any person whose number is in a given area code unless the seller or telemarketer has first subscribed to and accessed the portion of the DNCR that includes numbers within that area code and paid the annual fee. Telemarketers making outbound calls to sell goods or services to individuals at their residential and/or wireless telephone numbers will have to buy the DNCR list covering that area code.
The DNCR is a national registry that applies to interstate calls. It is important to follow both the federal rules and the state rules for both the state where the call is originated and the state where the call will be received. For intrastate calls, if the state’s law is determined to be stronger (provide more protection) than the federal law, the state’s law applies. If the federal law provides more protection, it is applied.
Subscription fees for the DNCR are set to change on October 1, 2018. Under the new terms, telemarketers will be able to obtain data for up to five area codes for free. The annual fee will be $63 per area code of date (after the five free area codes) and up to a maximum annual fee of $17,406.
Forty-four states also have do-not-call lists. Thirty-two of those states have adopted the DNCR as their own.
*Fun Fact: the state of New Hampshire has the most active registrations on the DNCR per 100,000 numbers, with 90,204 of every 100,000 numbers registered. Proving that New Hampshire’s new state motto should be “New Hampshire: Live Free (of Telemarketing Calls) or Die.” Try fitting that on a license plate.
In the other twelve states – Colorado, Florida, Indiana, Louisiana, Massachusetts, Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee, Texas, Wyoming – consumers have to sign up for the state-specific lists. Alas, companies have to pay state-specific subscription fees to access the state-specific registries too.
Violations Cost Money, Honey.
Callers that violate the do not call provisions of the TCPA twice in a 365 day period are liable for statutory damages in an amount of $500 per call, and if the violation was willful, the court may award the consumer an additional $1,500 per call. Today, the DNCR includes approximately 227 million active registrations, so the potential for litigation is huge.
Plus, those who violate the DNCR or place an illegal robocall can be fined by the FTC up to $16,000 for each violation as an “unfair and deceptive trade practice” under the Federal Trade Commission Act. Further, the FCC may issue fines of up to $41,484 per call made in violation of the DNCR. Doing the math, that’s 227,000,000 Registrants x $41,484 fine per call = $9.41687e+12!?
We just broke the internet, folks.