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TCPAland Disaster In the Making!: New Bi-Partisan TRACED Act Hopes to Put the TCPA On Steroids to Stop Robocalls– Here’s Why That’s a Really Bad Idea

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I make a point to never post on the weekends. But this is a huge deal. And although it is a beautiful autumn afternoon outside, we need to talk TCPAland.

Congress just proposed a bill to attack robocalls by leveraging the TCPA that is really dangerous but, for some reason, both parties seem to think it is a good idea. So it falls to me to save the world.

I’m up for it.

In fairness, the TRACED Act–proposed jointly by Massachusetts Senator Ed Markey, a Democrat, and Senator John Thune, a South Dakota Republican– is a good news/extremely bad news situation. The good news is that it seeks to give the FCC the authority it has always needed–and never had–to require call identity validation and cut down on spoofed calls. That’s super critical stuff and a really big deal.

The bad news is that it modifies the existing Telephone Consumer Protection Act (“TCPA”) to encourage the FCC to bring more lawsuits against more businesses and gives the FCC an even heavier cudgel (sort of) to threaten folks with. It also requires the FCC to get together with the CFPB(!) and the DOJ to discuss why more regulators aren’t currently enforcing the TCPA and to encourage other agencies to get busy!

In other words, Congress is about to go “all in” on the TCPA and encourage the FCC and other governmental agencies to enforce the statute right alongside private actors.  This just at a time that the FCC is currently working on interpreting the reach of the TCPA in light of its recent failed power grab in expanding the statute.

All right, let’s break this down.

First, a friendly reminder. The TCPA is not the answer to the robocall problem in this country. Never has been. Never will be. And its not for a lack of teeth. The TCPA already has more teeth than a piranha family portrait and robocalls continue to run rampant.

Yes, the TCPA makes it illegal to call cell phones using certain kinds of technology without express consent. That sounds pretty good. But the TCPA was never intended to be a comprehensive tool to prevent robocalls. Instead it was a very narrowly drawn “rifle shot” intended to stop to only the most abusive types of calls made using random-fire dialers. But that’s not much of an arsenal considering the sophisticated technology scammers are using today.

And we’ve already witnessed what happens when the FCC tries to conjure up a howitzer for itself using the vague and mushy language of the TCPA– the TCPA’s disastrous private right of action allows lawyers to sue for $500.00 a call right alongside the FCC. So the broader the FCC makes the TCPA–hoping to give itself more power to fight true bad actors– the broader it makes the TCPA for consumer lawyers and class action attorneys that use the statute against legitimate businesses to shake down millions in settlements.

TRACED wants to encourage the FCC to broaden the TCPA again. But we all already know how this movie ends. We’ve seen it before.

When the FCC began responding to consumer complaints about robocalls in the early 2000s, it dusted off the TCPA (again its only tool in the fight against robocalls) and began working to expand the statute to give itself more power to fight robocalls at that time.  In 2015 it went so far as to give itself the power to regulate all calls made by any software-enabled dialing device–including smartphones–an immense power grab that allowed everyone in the country to sue everyone else for every call to a cell phone made without consent. Talk about a bad idea.

As expected, people sued. Thousands of them. In suits big and small all across the country. But instead of suing true “robocallers”–the folks making spam and scam calls–they sued legitimate American businesses, most of whom were using live agents to handle calls and not robots. Because of the FCC’s massive expansion of the TCPA, however, calls made by “predictive dialers”– modern dialing equipment commonly used by legitimate businesses that accurately dials numbers connects calls with customer service agents– became subject to the statute. Businesses caught unaware thought they were complying with the law, but suddenly they weren’t and were facing liability for $500.00 per call! The floodgates for frivolous lawsuits were thrown open and businesses–and sometimes even individual people–were hammered with lawsuits for millions or billions of dollars in statutory authority. Terrible terrible stuff.

Those were dark times–that recently came to an end (sort of) when the D.C. Circuit Court of Appeal found the FCC’s power grab to be very illegal— but, remarkably, the scourge of true robocalls only got worse and worse despite all those frivolous lawsuits. Indeed there was a huge increase in robocalls after the FCC expanded the TCPA in 2015.

So what gives?

Simple– private lawsuits against legitimate American businesses have no impact on robocalls because scam robocalls are not made by legitimate American businesses. Instead they are made by shady fly-by-nights and overseas outfits that do not have bank accounts in the states. No bank accounts means no big money for class action lawyers, means no lawsuits against the bad guys.  So even broadening the TCPA to the furthest extent imaginable was not nearly enough to stop robocallers as the FCC’s failed recent experiment taught us.

Short answer: private lawsuits under the TCPA are not the answer to stopping robocalls. 

So why on Earth is Congress proposing to modify the TCPA to make it more important to the FCC’s enforcement efforts and encouraging other agencies to also enforce the TCPA? We’ve literally just lived through a decade of the FCC expanding the statute to devastating effect–which just ended with the D.C. Circuit Court of Appeal striking down the 2015 Omnibus ruling— and the Congressional response is to encourage the FCC to do it all over again?

Probably because they need to hear from me. So here’s my quick letter to Congress on this. I assume it will fix everything.

Dear Congress,

I know you’d like to have the FCC use the TCPA to stop robocalls–it won’t work, trust me.

But if you really want the FCC to use the TCPA to stop robocalls you must–really really MUST–get rid of the private right of action.

Happy to fly out there and explain why.

Yours truly,

Czar

Oy vey. (Did I say that right?)

So what does TRACED actually plan to do to the TCPA? While the Earl works on a redline– (Earl– I expect it on my desk Monday morning, Thanks)– here’s a quick synopsis:

It adds a forfeiture penalty for “any person that is determined by the Commission, in accordance to have violated this subsection with the intent to cause such violation shall be liable to the United States for a forfeiture penalty. A forfeiture penalty under this paragraph shall be in addition to any other penalty provided for by this Act. The amount of the forfeiture penalty determined under this paragraph shall not exceed $10,000 for each violation.”

Ok so this is kind of weird for a couple of reasons. Notice that the forfeiture only applies if a person intends to “cause such violation.” That’s weird. So does that mean if a person intends to make a scam robocall to shake down some little old lady that’s fine because they didn’t intend to violate the TRACED act? Something to think about oh ye drafters of bad statutes.

Another thing to think about– isn’t the current FCC authority in forfeiture actions $16,000.00 per call under the general Telecommunications Act rules?  Me thinks the answer is yes and so does the FCC. See e.g. this Public Notice (“failure to comply with the relevant sections of the TCPA and corresponding rules may subject[you] to enforcement action, including monetary forfeitures as high as $16,000 per violation…”) So Congress wants to fight robocalls using the TCPA by lowering the forfeiture penalty for TCPA violations from $16k to $10k? I don’t get it.

But now the really bad news. TRACED would also require the DOJ and the FCC to get serious about enforcing existing laws (again–that’s just the TCPA folks) by getting together with their friends at the CFPB (!) the Department of State, the Department of Homeland Security (and suddenly this just got dystopian), the Department of Commerce and the FTC to discuss, inter alia, “whether, and if so how, any Federal law, including regulations, policies, and practices, or budgetary or jurisdictional constraints inhibit the prosecution of [TCPA] violations.” 

Again, did I mention this is a Bi-Partison bill? Come on folks, panic with me already.

Ok, so I’ve been dwelling on the negative. There’s some upside here too.

First, TRACED would require the FCC to require: “a provider of voice service to implement an appropriate and effective call authentication framework in the internet protocol networks of voice service providers.”

I’m not sure I know what that means, but I think it means Congress wants to force the carriers to track and authenticate calls and, although that’s a little dystopian (remember how the Department of Homeland Security is supposed to get involved with enforcement here), it seems like a critical first step to stop the actual scam bad guys out there. Lots of unintended consequences are likely, however, which is why Congress is dictating the FCC implement a safeharbor “from liability for unintended or inadvertent blocking of calls or for the unintended or inadvertent misidentification of the level of trust for individual calls pursuant to the authentication framework…”

Also, TRACED requires the FCC to implement regulations protecting telephone subscribers from receiving nonauthenticated calls. Again, this sounds pretty revolutionary and important to stopping the true scammers. I like where this part of TRACED is headed, although it is (by design) pretty skeletal.

In summary, TRACED gives the FCC some badly needed tools on call spoofing but boy oh boy is it misguided with respect to encouraging TCPA expansion and enforcement proceedings.

So it looks like my quixotic TCPA adventures are far from over. Thanks for being along for the ride. We’ll keep fighting.

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