THE 5 MARKETING OBSTACLES CREATED BY THE NEW TCPA REGULATORY REVISIONS — AND HOW TO OVERCOME THEM

The Sales Intelligence Company

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Specifically, are you marketing to consumers on their mobile devices via phone or text message?

If so, you’ll need to reconfirm that your practices are compliant with the new regulation. And if you’re still relying on simple opt-ins for consent, you may be in trouble.

In this article, we will address the 5 key implications the new TCPA revisions have on marketers, and provide suggestions on what you can do to protect yourself and remain compliant. Doing so has become more important as enforcement and litigation have increased in recent years, and it looks like they’ll continue to increase—just as the compliance burden has become more complicated.

But getting and staying compliant doesn’t mean you have to reduce your marketing efforts. The actions we will recommend can help avoid fines and brand damage while still allowing you to establish and grow profitable relationships with consumers. In fact, in many cases you’ll be able to

increase your marketing and sales activity without compromising compliance or sacrificing the efficiency that comes from leveraging advanced technology.

In short, the goal of this paper is to help you eliminate risk and maximize revenue by marketing more, more compliantly.

The 5 key implications of the TCPA to be sure you’re addressing are:

1. Consent no longer cuts it. Say hello to “prior express written consent” captured as a stand-alone agreement from consumers.

2. Don’t touch that (auto) dial. Systems even capable of auto-dialing violate the law in certain circumstances—even if auto-dialing is disabled.

3. Pre-recorded messages need pre-approval. Delivery of prerecorded messages to mobile phones or landlines now requires specific consumer consent.

4. Exemption denied. Established Business Relationship (EBR) exemptions no longer allow use of auto-dialers or pre-recorded messages.

5. No <3 for text message mark8ing. The use of automated systems to send marketing-related text messages now also requires the higher level of consent.

The October 2013 revisions to the Telephone Consumer Protection Act (TCPA) contain significant implications for marketers that many do not fully understand and may be violating right now without even knowing it.

Might you be unwittingly putting your company at increased risk of fines and the brand damage that comes from the media tempest that accompanies investigations into Do-Not-Call violations, actual or alleged?

If you’re marketing to consumers on their mobile devices via phone or text message, and are still relying on simple opt-ins for consent, you may be in trouble.

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1. CONSENT NO LONGER CUTS ITThe latest TCPA changes signify the continued shift by regulators to an opt-in framework for outbound marketing rather than simply ensuring consumers have a clear, easy way to opt out of future solicitations—which had been an acceptable practice to regulators for the last 20 years.

The FCC now requires prior express written consent in a number of scenarios. They define prior express written consent (which we’ll abbreviate for simplicity from this point forward as PEWC… without commentary on pronunciation) as a signed written agreement from each individual consumer that clearly and conspicuously discloses to the consumer that:

• By signing the agreement, he or she authorizes the seller to deliver, to a designated phone number, telemarketing calls that utilize specified types of technologies; and

• The consumer is not required to sign the agreement or agree to enter into it as a condition of purchasing any property, goods, or services.

However, the standards for what constitutes PEWC vary widely state-by-state. Some states, such as Indiana, even specify the size and font of the text in a document requesting consent.

The extent to which PEWC will impact outbound marketing compliance should not be underestimated. Marketers now need to secure consumer attention, interest, and consent for future communications before initiating many promotional phone or digital communications.

But neither should the steps required to address PEWC be overestimated. The required signature may, according to the FCC, be obtained in compliance with the E-SIGN Act, including via an e-mail, website form, text message, telephone key press, or voice recording.

In fact, PEWC requirements are best confronted head-on. While PEWC can be captured through a variety of approaches (e.g. web form, telephone keypress, paper and pen, etc.), the best method for your business depends on the touch points you have with a consumer. However there are a few truths that must exist for all consent capture points:

• Appropriate disclosures must be clearly presented, per the TCPA and varying state laws

• Ability for the consumer to provide his/her consent through some form of action (e.g. a check a box, pressing a submit button)

• Time/date stamp for your audit records

• Stand-alone consent form, not combined with a contract, agreement, or the submission of another application

You must ensure that your consent data collection points meet both the federal E-SIGN Act as well as varying state requirements.

Gryphon’s Privacy Consulting practice is available to review existing data collection points for compliance or help you build new ones that both meet all regulatory requirements, and that have been proven to minimize friction to consumer conversion.

2. DON’T TOUCH THAT (AUTO) DIALThe TCPA requirements for PEWC make it especially challenging to legally call wireless numbers, and more expensive to ignore the regulations. The revision applies to both marketing-related calls and informational or transactional calls to wireless numbers.

The latest TCPA changes signify the continued shift by regulators to an opt-in framework for outbound marketing.

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First, the FCC clarified the definition of an auto-dialing system so the prohibition of dialing a wireless number without PEWC has expanded to prohibit any system with the capacity of auto-dialing to call a wireless number, even if auto-dialing is disabled and the system is being used in another mode (e.g. predictive, manual, or preview).

The implication of this burden is exacerbated by the growing trend of consumers dropping landlines in favor of exclusively using wireless numbers. In the first half of 2013, 38% of US adults lived in households with wireless phones only and no landline, representing a 52% increase over the last three years.1 Among adults renting their homes, the number without landlines is now over 61%.

Implied consent is also not sufficient for consumer debt-collection agencies using auto-dialer equipment to call wireless numbers. As an example, in the Meilleur v. AT&T settlement in March of 2013, AT&T paid $4 million to settle a class-action lawsuit alleging the company placed calls using an auto-dialer system and an artificial or prerecorded voice.

This means that companies wishing to reach consumers via wireless numbers for any reason now have three options:

A. Secure each consumer’s attention, interest, and consent for future communications through a non-wireless channel before initiating a call to their wireless numbers using a system capable of auto-dialing; or

The FCC prohibits calling wireless numbers using any system with the capacity for auto-dialing, even if auto-dialing is disabled.

1 http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless201312.pdf

BUT HOW DO YOU KNOW FOR SURE IF A NUMBER IS WIRELESS?

The other challenge to complying with regulations around wireless numbers is knowing whether a number is wireless at the exact time you want to call it.

This includes landlines that are ported to wireless phones (and can’t be called) as well as wireless numbers that are disconnected and get reassigned to another consumer’s landline (and can be called).

Sure, you could do the old-fashioned “list scrubbing” of your list against a third party list, but this is a time-consuming process that must be repeated often to remain current, and is prone to error. So 1990s…

And manually scrubbing against the hundreds of changing federal and state regulations, and then considering each potentially non-callable number in the context of numerous exemptions that would make it legally callable, is impractical.

This means that marketers that use scrubbing may not only mistakenly allow calls to numbers they shouldn’t (putting their company at risk), they are inadvertently over-suppressing up to 60% of numbers that are actually legally callable.

So enabling every call center, branch office, home-based and mobile employee to use a cloud-based, real-time compliance service is the most effective way to ensure 100% compliance with all regulations and also ensure the maximum number of legally callable numbers—in other words, simultaneously eliminate risk and maximize revenue opportunities.

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A. Use a non-autodialing-capable system that integrates with your current system and still offers high-productivity benefits, such as click-to-call functionality that still requires human intervention, in order to call wireless numbers for which PEWC has not been obtained; or

B. Don’t call wireless numbers at all — and surrender the mobile phone channel (that’s always within consumers’ reach) to competitors.

Clearly, with the fast-shrinking universe of landlines, marketers who wish to maintain one-to-one relationships with a large number of consumers via their wireless phones should:

• Assess the methods by which they obtain PEWC to protect themselves from violating the TCPA, if a system capable of auto-dialing is being used, as noted above;2 and/or

• Use dialing technologies like click-to-call through a system that is not capable of auto-dialing3 and requires ‘human intervention’ to complete the dial, in order to reach consumers from whom PEWC has not yet been secured.

3. PRE-RECORDED MESSAGES NEED PRE-APPROVALAnother new implication of the TCPA revision is that the FCC has finally aligned its regulations with the Federal Trade Commission (FTC)’s, and now marketers solely under the FCC’s jurisdiction must now secure PEWC prior to making calls that include an artificial voice or pre-recorded message, whether to cell phones or to residential landlines.

So it’s important to make sure an agreement to receive pre-recorded messages from consumers is part of your consent obtainment campaigns. But again it is important to note that this consent must be captured in a stand-alone agreement, such as a web form, and not be included as part of a submission of another application or agreement where the consumer is providing his/her contact for other purposes.

For example, an online web form for a mortgage quote, in which the consumer enters his/her contact information cannot also serve as collection point for PEWC. In other words, the mortgage quote web form could not include something like a checkbox at the bottom of the page that says, “I consent to receive autodialed calls on my mobile telephone number.” The consumer’s PEWC must be obtained in a standalone agreement whether a separate online or paper form that says something along the lines of:

I hereby consent to receive autodialed telemarketing calls from or on behalf of [Marketer’s Legal Name] at the telephone number provided above, including my wireless number. I understand that consent is not a condition of purchase.

4. EXEMPTION DENIEDThe TCPA revision also aligned with the FTC’s regulation, which eliminates the Established Business Relationship (EBR) exemption for calls placed to wireless numbers when using auto-dialers or when including prerecorded messages. Whereas before, at least according to the FCC, marketers could legally use pre-recorded messages, as of this past October, companies can no longer do so.

2 Companies should, at the same they obtain PEWC also ask for the consumer’s channel and product preferences, which can be used to increase each consumer’s receptiveness to future communications.

3 Gryphon’s cloud-based Compliance-as-a-Service provides this functionality. Gryphon’s solution also automatically certifies the legal calling status of each number in real time against hundreds of federal, state, and company-internal regulations, as well as numerous types of exemptions, which are always current. This process yields up to 60% more legally callable numbers than other methods, while maintaining 100% compliance.

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However the reality is the FTC has had this requirement in place since 2009. So marketers should have already been complying with this practice to avoid violating FTC regulations. Now the same standard is reflected in the FCC’s regulation. So if marketers were not already compliant with the FTC regulation, continued violation could get them in trouble with both the FTC and the FCC— and potential claims of confusion would not stand.

5. NO <3 FOR TEXT MESSAGE MARK8INGOne of the fastest-growing channels for outbound marketing is text messaging. Major brands benefit from text-message marketing because of their ability to reach individual consumers with immediate and personalized communications based on the consumer’s geographic location, the time-of-day, or other data about the consumer that increase the likelihood a consumer will take action from a received message.

Marketers have always had to obtain express consent, e.g. a clear opt-in, before sending marketing text messages to consumers; implied consent never met the standard.

But text marketing is now significantly more challenging, thanks to October’s TCPA revisions. The FCC and the courts consider the systems used to deliver bulk text messages to be “automated dialing systems” and that text messages delivered with these systems to be “recorded calls” for the purposes of the TCPA rule.

Text message campaigns thus need to meet the same standards, including the requirement for marketers to obtain PEWC, and the associated disclosure obligations. And the burden-of-proof for having secured and complied with such consent falls squarely on the shoulders of the marketer.

Marketers must ensure they set clear expectations with consumers and obtain unambiguous consent—while also thoroughly and automatically documenting every step in the process. Recommended approaches to accomplish this are to capture the required consent via email, website form, text message, telephone key press, or voice recording, and then maintain a record of consent for as long as legally required. How long a consent record must be maintained depends on federal and varying state law, but ultimately depends on how long a regulator may investigate the use of a PEWC. You should consult your legal counsel for your business policy on the storage of marketing data, and/or engage a third party with the appropriate regulatory and advisory expertise.

WHY TAKE ACTION? The TCPA as well as other federal and state marketing privacy regulations are growing stricter by the day. The October changes to the TCPA further the development of a potential opt-in framework for all outbound marketing, and the burden-of-proof for compliance sits squarely on the shoulders of marketers.

With these new changes adding to the already-complex regulations, some marketers may choose to ignore them or implement changes in reaction to only some of the new compliance requirements. But taking either of these approaches could prove very expensive.

Even without the revisions that went into effect last October, the number of lawsuits filed under the TCPA has grown significantly in recent years—63% greater in 2012 compared to 2011.

The systems used to deliver bulk text messages are considered “automated dialing systems” and text messages to be “recorded calls.”

7The Sales Intelligence Company

One reason for the increase is the Supreme Court decision in Mims v. Arrow Financial Services, which decided that private suits upholding the TCPA may be brought in both federal and state courts, whereas previously TCPA-related suits were only permitted in federal court.

Although the latest TCPA changes, and others, herald a challenging future for marketers, they don’t necessarily mean outbound marketing to phones (landline or mobile) will cease to be a source of a company’s growth.

WHAT CAN YOU DO?Businesses that don’t run away from these regulations but address them head-on by utilizing systems and instituting processes that don’t violate any of the regulations can conduct more aggressive marketing campaigns.

Review Policies and Procedures First of all, marketers should assess their current telemarketing and text message marketing policies and procedures for how consent is captured and how records are stored, and whether they meet the TCPA requirements. Review of all data collection points should be conducted by a TCPA compliance professional to ensure all consent captured meets the multi-pronged disclosure requirements. All consent captured prior to the October revisions, should be reevaluated and potentially disregarded.

Engage Compliance Experts Second, marketers should develop established partnerships with key third party compliance experts to validate and ensure that policies and

changes that are incorporated are continually updated to reflect new rulings, regulations or enforcement actions.4

Automate Real-Time Compliance Finally, for companies that want to be 100% certain that they are not in violation of applicable laws regardless of dialing method and equipment, and that do not want to maintain a dedicated staff of specialized attorneys and software developers to stay on top of complex and constantly changing federal and state regulations and ensure their systems are always up-to-date, they should subscribe to an automated, real-time, and always-current compliance service that integrates with their internal systems.5

Companies that proactively address the new and changing regulatory environment are sure to reap the rewards and boost market share by taking full advantage of a marketing channel that is proven effective and—in the case of mobile phones—always within the consumer’s reach, whether at home, work, or on the go.

Companies that proactively address the new and changing regulatory environment are sure to reap the rewards.

4 Gryphon’s team of attorneys, former regulators, PACE-SRO auditors, and Certified Privacy Professionals (CIPP and CIPP/C) have the expertise to provide 100% warranted compliance that also ensures clients have the largest number of legally permissible contacts.

5 Gryphon offers the only completely automated and indemnified Do-Not-Call compliance service that integrates directly with client call flows. All outbound calls are certified in real time using up-to-the-second data that yield up to 60% more legally callable numbers than alternate methods. Gryphon’s cloud-based service means easy deployment with no new hardware or software. And the indemnification Gryphon offers its clients means bulletproof legal protection.

© 2014 Gryphon. All rights reserved.

1-866-366-6822www.gryphonnetworks.com

ABOUT THE AUTHOR

Gryphon enables companies with sales and marketing teams dispersed across call centers, offices, homes, and mobile devices to eliminate risk and maximize revenue by ensuring all are 100% compliant with all federal and state regulations, internal policies, and consumer preferences, and that they are fully indemnified against potential investigations or fines, and that all sales activity data is automatically captured and analyzed to boost performance and forecast accuracy. More than 600 clients, including 80% of the Top 10 insurance companies and half of the Top 10 US banks rely on Gryphon’s cloud-based services to protect and advance their businesses. For more information, visit www.gryphonnetworks.com.

The Sales Intelligence Company