Telemarketing Law

Telemarketing in a State of Emergency

March 20, 2020 by David Klein

Within a few short weeks, Covid-19 (“Covid-19”), the disease caused by the novel coronavirus SARS-CoV-2, has affected nearly all aspects of life in America. The United States has declared a state of emergency, and multiple states of the Union have followed suit. In addition to Covid-19’s pervasive effects on business, companies engaged in telemarketing also need to be concerned with special restrictions that they may face in jurisdictions that have declared states of emergency.

What is Prohibited During a State of Emergency?

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Understanding Telemarketing Law

March 11, 2020 by David Klein

What is Telemarketing Law?

Understanding the complexities of telemarketing law is challenging. Under federal law, telemarketing is defined as “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.” 47 C.F.R. § 64.1200(f)(12). The Federal Communications Commission (“FCC”) has deemed informational calls and messages, as well as calls and messages for non-commercial purposes, exempt from most telemarketing regulations. Complying with state and federal telemarketing law requires constant attention to the evolving regulatory and litigation landscape.

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Changes Coming to New York Telemarketing Law

February 4, 2020 by David Klein

February 4th, 2020

On March 1, 2020, New York’s “Nuisance Call Act” will go into effect, bringing significant change to the State’s existing telemarketing law. The legislation, which was signed into law by Governor Andrew Cuomo on December 2, 2019, is intended to close a loophole in New York’s Do Not Call Law, which originally took effect in 2001.

How Does the Act Change New York Telemarketing Law?

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Cruise Company Defendants Settle FTC-Alleged TSR Violations

January 14, 2020 by David Klein

January 14th, 2020

A call center and three (3) individuals associated with a telemarketing effort on behalf of Grand Bahama Cruise Line LLC (“GBCL”) recently settled alleged violations of the Telemarketing Sales Rule (“TSR”) with the Federal Trade Commission (“FTC”). The FTC intends to litigate this matter against the remaining seven (7) defendants in federal court, including GBCL. The FTC’s complaint alleges that GBCL and the other defendants committed TSR violations by placing millions of telemarketing calls offering free cruises to telephone numbers listed on the National Do Not Call Registry (“DNC Registry”).

What are the Alleged TSR Violations?

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TCPA Law Update: Marijuana Delivery Venture Seeks Arbitration of TCPA Class Action Suit

January 10, 2020 by David Klein

January 10, 2020

A California-based marijuana delivery company, Eaze Technologies, Inc. formerly known as Eaze Solutions, Inc. (“Eaze”), is seeking to have Telephone Consumer Protection Act (“TCPA”) violation claims against it sent from federal district court to arbitration. If Eaze obtains a ruling in its favor, it would follow a nationwide trend in TCPA law involving courts enforcing arbitration agreements contained in website and mobile application terms and conditions.

How does Eaze’s motion to compel arbitration compare with recent TCPA law trends?

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FCC Clarifies TCPA Fax Exemption

December 27, 2019 by David Klein

December 27th, 2019

In an important decision concerning the Junk Fax portions of the Telephone Consumer Protection Act (“TCPA”), the Federal Communications Commission (“FCC”) recently issued a declaratory ruling clarifying the scope of the TCPA fax exemption. The ruling came in response to a petition filed by Amerifactors Financial Group, LLC (“Amerifactors”) requesting clarification from the FCC as to whether certain fax services can be fairly classified as fax machines within the meaning of the TCPA.

Like many other companies operating in the fax-based marketing space, Amerifactors utilizes online fax services to transmit its marketing communications. Such online fax services operate through use of “‘a cloud-based service consisting of a fax server or similar device that is used to send or receive documents, images and/or electronic files in digital format over telecommunications facilities’ that allows users to ‘access faxes the same way that they do email by logging into a server over the Internet or by receiving a pdf attachment [as] an email.’”

How did the FCC clarify the TCPA fax exemption?

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TRACED Act Contains New TCPA Penalties

December 10, 2019 by David Klein

December 10th, 2019

The US House of Representatives recently passed the “Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act,” or “TRACED Act.” If written into law, the TRACED Act would implement a number of changes to the TCPA landscape, such as the creation of a new Interagency Working Group and new anti-spoofing requirements. Most notably for our readership, the TRACED Act imposes new TCPA penalties in the form of civil forfeiture, adding to the already significant penalties that exist today for violations of the TCPA.

What new TCPA penalties and provisions will come into effect if the TRACED Act is signed into law?

Civil Forfeiture Added as Possible TCPA Penalty

On top of the already steep penalties for TCPA violations ($500 per violative telephone call/text message, $1,500 for each willful or knowing violation), the proposed language of the TRACED Act imposes a new civil forfeiture penalty for intentional violations of the TCPA and leaves enforcement largely at the discretion of the Federal Communications Commission (“FCC”). Specifically, the bill states that if done “with the intent to cause such violation . . .” TCPA violations will result in “an additional penalty not to exceed $10,000.” For the FCC to hold a person liable for this civil forfeiture penalty, that person must receive proper notice from the FCC of her/his/its apparent liability and be afforded an opportunity for a hearing before the FCC or an Administrative Law Judge.

Generally speaking, this civil forfeiture penalty would afford the FCC greater latitude to punish those who intentionally violate the TCPA. In fact, the bill mandates that the FCC submit an annual report to Congress detailing the FCC’s enforcement of, and punishment for, TCPA violations that occurred in the preceding year.

Other Notable Provisions of the TRACED Act

Beyond TCPA penalties, the TRACED Act includes several other notable provisions:

STIR/SHAKEN Authentication Software: To authenticate the source of calls and prevent unnecessary robocalls, the TRACED Act requires telecommunications service providers to implement Secure Telephone Identity Revisited (“STIR”) and Signature-based Handling of Asserted Information Using toKENs (“SHAKEN”) software to help consumers identify spoofed calls.
Interagency Working Group: The Attorney General and Chairman of the FCC are directed to convene an interagency working group “to study Government prosecution of violations of [the TCPA],” and review possible TCPA enforcement actions.
Information Sharing Regarding Robocall and Spoofing Violations: Within 18 months of enactment of the TRACED Act, the FCC would be tasked with implementing regulations that create a process that “streamlines the ways in which a private entity may voluntarily share with the [FCC] information relating to [TCPA violations].”
FCC to Report Robocall Violations to the Attorney General: The Chief of the Enforcement Bureau for the FCC must provide evidence of “willful, knowing, and repeated robocall” violations to the Attorney General and publish a report related to TCPA enforcement.

What the TRACED Act’s TCPA Penalties and Provisions Mean for Businesses

While the TRACED Act has not yet been signed into law, if and when it is, it will result in significant ramifications for businesses. First, the TRACED Act would increase potential TCPA penalties for intentional violations of the statute and afford the FCC significant discretion with respect to enforcing such penalties. Given its focus on rulemaking, the TRACED Act would force the FCC to continuously make and monitor TCPA-related rules, causing the TCPA landscape to periodically shift more than it does already. This will, inevitably, lead to an even greater number of TCPA lawsuits than we see already. We will continue to monitor this legislation and provide follow up blog analysis in the future.

If you are interested in learning more about this topic or require assistance in connection with TCPA compliance for your business, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

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The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.