Court Finds Fax Survey is TCPA Advertisement

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The United States Court of Appeals for the Third Circuit recently upended the legal landscape governing fax marketing by issuing a decision which held that a market research-related fax survey is an advertisement for purposes of the Telephone Consumer Protection Act (“TCPA”).

What are the implications of the Third Circuit’s fax survey decision?

The TCPA generally prohibits the transmission of unsolicited advertisements sent via facsimile.  Accordingly, fax marketers had long operated believing that if they sent a fax that was not an advertisement, then they would not be exposed to TCPA liability. This has been a particularly useful guide for companies that conduct market research surveys, as well as those that advertise on their behalf.  Faxes that feature such surveys are typically not characterized as advertising services, but rather as offers to compensate the fax recipient to participate in the surveys.  Seemingly, such solicitations would not constitute advertisements, which the TCPA expressly defines to be “any material advertising the commercial availability or quality of any property, goods, or services.” 

In two cases involving the receipt of faxes offering money to health care providers for participation in telephone and Internet surveys on healthcare-related topics, however, the Third Circuit disagreed with this longstanding interpretation.  The Court was not persuaded that there is any meaningful distinction between a fax that advertises the availability of a product or service for purchase by the recipient and one that advertises the fax sender’s availability to purchase services from the recipient. The Court relied heavily on the fact that: 1) faxes offering the recipient the opportunity to purchase a product or service; and 2) faxes sent by a company with the intent to buy goods or services from the recipient; both 3) share a common commercial purpose. Ultimately, the Court found that “it is obvious that a fax seeking a response to a survey is seeking a service.” This led the Court to conclude that “[a]n offer of payment in exchange for participation in a market survey is a commercial transaction, so a fax highlighting the availability of that transaction is an advertisement under the TCPA.”

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Ensuring Fax Surveys are TCPA Complaint

The regulatory climate governing fax marketing had already been a challenging one for businesses operating in the space.  With this Third Circuit decision, the rules applicable to fax marketing, seem to be changing once again. Given the foregoing, it is incumbent upon those operating in the fax marketing industry to keep apprised of whether the Third Circuit’s expansive interpretation of the TCPA gains traction nationwide or whether it becomes an outlier.  In the interim, while the issue continues to work its way through the judicial system, businesses are advised to coordinate with knowledgeable counsel prior to engaging in any fax marketing campaign.  

If you need legal review of your fax marketing practices and procedures or if you are the subject of a TCPA fax lawsuit, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for information 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.

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