Beware of the Telephone Consumer Protection Act

Written by: David J. Jencks, Esq., Attorney, Jencks Law, P.C.

What is the TCPA?

Understanding the Telephone Consumer Protection Act (TCPA) compliance begins with recognizing the foundational legislation that governs it. The Telephone Consumer Protection Act (TCPA) was enacted in 1991 by Congress to combat unwanted telephone marketing calls (and later expanded to texts) by placing restrictions around the use of an automated telephone dialing and messaging system as well as maintaining and adhering to Do Not Call (DNC) lists.  The law can be found at 47 U.S.C. 227 and the regulations at 47 C.F.R. 1200. The TCPA does not preempt state law that imposes more restrictive provisions than the TCPA.  Understanding applicable state law on this issue is also important.

Understanding TCPA Compliance and Restrictions

Despite the name of the law including the word “consumer”, do not be fooled:  This law is regularly and generally construed to include business to business communications. 

Automated Telephone Dialing System (ATDS) Rules

An automated telephone dialing system, otherwise known as an autodialer, is equipment which has the capacity to: (A) store or produce telephone numbers to be called, using a random or sequential number generator, and (B) to dial such numbers. It is important to note that the definition of what constitutes an ATDS has evolved and varies by state, so it is crucial to understand each state’s stance on what an ATDS is before picking up the phone. 

Under the TCPA, if your organization is using an ATDS, or a telephone system with the capacity to be an ATDS, you must obtain prior express written consent to make telemarketing calls and text messages to residential phone numbers, and prior express consent for informational calls and text messages to these numbers.  

Wireless Restrictions 

The TCPA prohibits telemarketers from calling wireless phone numbers using an ATDS unless the caller has obtained prior express consent, or if the call is being placed for emergency purposes. TCPA wireless restrictions apply to all wireless numbers, residential and business. This means that even if a number is being used for business purposes and is provided to you as such, you are at risk of a violation. 

Text Messaging Restrictions 

Under the TCPA, all marketing calls, including SMS or text messages, are subject to regulation in addition to calls. The TCPA requires express written consent before contacting someone via SMS or text message. In other words, prospects do not have to opt-out or be on a Do Not Call list to avoid being contacted by text message. A business is not permitted to text a prospect unless that prospect provides express written consent to be contacted via text message. 

When marketing to prospects via text message, it’s important that organizations always do the following when obtaining consent: 

• Provide accurate information about the nature and content of text messaging when requesting permission

• Keep a record of all “written consent” received regardless of format 

Third Party Vendors

The use of third-party services from generating the leads or actually transmitting the messages will not alleviate you from liability.  If your organization’s name is shown in the text message or phone calls, or is reasonably linked to you, you should plan on defending a TCPA claim.  You may have claims for contribution or indemnity back to your vendor, but you will not be able to place the blame squarely on your vendor and gain a dismissal from the TCPA lawsuit. 

Furthermore, if services are generating the number leads for you, your vendor should make contractual warranties to you that the calls and messages are TCPA compliant.  Furthermore, each organization should negotiate a broad indemnity provision in its contract with third party lead generators in the event they provide you with a non-TCPA compliant number.

TCPA Enforcement

The TCPA allows for a variety of enforcement mechanisms. The most significant is a private right of action that allows consumers to bring individual lawsuits and class actions. In 2022 and 2023, more than 4,000 TCPA complaints were filed in federal court. The TCPA is a strict liability statute with uncapped statutory damages and per-violation penalties that can be as high as $500-per-violation. Willful violations can be trebled as high as $1,500-per-violation. All of these elements combine to make for settlements and judgments in TCPA class actions that routinely reach millions of dollars. Class actions to each Factor should also mean the payment of the Plaintiffs’ attorneys fees and court costs.  If you’ve made a potential mistake and marketed in violation of the TCPA, the statute of limitations is 4 years from the last communication. 

Can Consent to Receive Calls and Texts be Revoked?

At its February 19, 2024, Open Meeting, the Federal Communications Commission (“FCC”) adopted an array of changes and codifications to its Telephone Consumer Protection Act (“TCPA”) rules to “strengthen consumers’ ability to revoke consent” to receive robocalls and texts after deciding that they no longer want them. 

The Order is detailed and comprehensive, but key components of the FCC’s actions on are:

1.  Codifies as a new rule that consumers may revoke prior express consent in any reasonable manner and provides approved sample methods for consumers to do so; and

2. Codifies that a one-time text message confirming a consumer’s request that no further text messages be sent does not violate the TCPA under certain conditions.

Text initiators who choose to use a texting protocol that does not allow reply texts must (a) clearly and conspicuously disclose in each text to the consumer that “two-way texting is not available due to “technical limitations of the texting protocol” and clearly and conspicuously provide “reasonable alternative ways for the consumer to revoke consent” (e.g., telephone number, website link, instructions to text a different number to revoke consent)

Revocation of consent is now easy and liberally construed.  Any receipt of “stop”, “end”, “revoke”, “opt out”, “cancel” or “unsubscribe”, including voice commands to this effect, will be considered effective revocation which takes effect 24 hours after receipt by the caller.  This adds one more layer for companies to monitor, and with which to verify marketing vendors that such communications are being logged and complied. 

A Special Warning to Transportation Factors

TCPA lawyers have discovered the DOT and FMCSA pages are being scraped by Factors and their vendors for numbers and subsequent marketing.  As a result, they’ve also discovered and are specifically targeting Factors for violations of the TCPA.  You should not assume that a carrier’s business number posted on any DOT or FMCSA website constitutes consent for being contacted for marketing purposes.  This precise issue has not been litigated, but asserting this defense could be an expensive endeavor with uncertain results. 

There are Few Sure-Fire Safe Harbors from a TCPA Violation

There are some subjective, and extreme, steps a serial text or phone marketer can take to try to establish it is not liable for TCPA violations, but that is beyond the scope of this article.  However, each company is allowed a one call or text safe harbor per number.  Upon the second contact, that safe harbor provision no longer exists. 

Concluding Thoughts

Every Factor should have a process, directly, or through a marketing vendor, to vet and establish TCPA compliance for each phone or text lead.  

Factors should carefully review and consider their contracts with marketing vendors gaining warranties that the numbers have been reviewed for TCPA compliance and indemnification to the Factor if the vendor produces non-TCPA compliant leads.  Furthermore, Factors or their vendors should be logging revocations of prior consent.

Transportation Factors should not assume the free availability of motor carrier numbers on public websites will be a guaranteed insulation and a successful defense from TCPA claims. 

About David Jencks
David Jencks is an attorney that has been practicing for 25 years in the areas of transportation and transportation finance. He represents Factors and transportation companies in transactional and litigation matters. He is a member of the Transportation Lawyers Association and co-general counsel to the IFA. He can be reached at davidjencks@jenckslaw.com.

The views expressed in the Commercial Factor website are those of the authors and do not necessarily represent the views of, and should not be attributed to, the International Factoring Association.