white paper tcpa: true threat or total hype?...now applies the act to text messages, email and...

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TCPA: True Threat or Total Hype?a publication from


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Executive Summary Search engines have significantly improved the quality of the results

they provide users. This is in large part due to the rapidly evolving

algorithms sites employ to promote interesting, credible content in

their search returns and banish derivative, untrustworthy material to

the search return hinterlands. While SEO comprises a necessary com-

ponent of an effective digital marketing campaign, marketers must

not forget that the point of increasing the online visibility is not itself a

goal. Rather, it is a method of generating leads and ultimately sales.

WHY TALK ABOUT A 1991 LAW NOW?

THE NEW FDCPA?

TCPA ENFORCEMENT: TOO MUCH OR NOT ENOUGH?

AN OUNCE OF GOVERNMENT OVERSIGHT, A POUND OF PRIVATE ACTION

TELEPHONE TERRORISM

COMPLIANCE IS COSTLY. NON-COMPLIANCE COSTS MORE

A COMPLIANCE CHECKLIST

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CONSUMERS ARE INCENTED TO SUBMIT COMPLAINTSAnd, it’s easier than ever for them to do so.How real is the threat?

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Why Talk About a 1991 Law now?Enacted in October 2013, new amendments to the federal law altered

the terms by which solicitors may legally contact consumers. The Tele-

phone Consumer Protection Act (TCPA) in previous iterations permitted

businesses to contact anyone who willingly divulged personal infor-

mation. The new rules, however, say that marketers cannot autodial a

mobile number, or even manually dial a mobile number using technolo-

gy that is capable of autodialing, without prior express written consent

to do so. If you’re manually dialing, or autodialing but it happens to be a

landline, you don’t need prior express written consent.

The change has further aggravated a pre-existing rash of lawsuits

brought under the TCPA. Now, however, “the rub for the plaintiff occurs

on the issue of whether he or she consented to be called in an initial

contract,” says Philadelphia-based consumer attorney Robert Salvin.

Jack Gordon, CEO of analytics firm WebRecon, says the “industry has

been dealing with stronger interest in TCPA litigation for several years,

if not longer.” Private litigators, says Gordon, have seen an opportunity

in TCPA. They have been investing their resources and recruiting con-

sumers to file TCPA-related litigation. As with any new enterprise, there

is a marketing process, and there is a learning curve to figuring how to

best exploit the situation.

The New FDCPA?Gordon compares the increase in lawsuits under the TCPA to a similar

rise in suits brought under the Fair Debt Collection Practices Act

(FDCPA) about a decade ago. Enacted 1997, FDCPA “came up only rare-

ly in court until the mid 2000s,” explains Gordon. The number of FDCPA

suits really took off once attorneys saw an opportunity. Attorneys got

mileage out of it for years, according to Gordon, who adds that TCPA is

the new FDCPA in this regard.

The Texas Northern District Court reflected a similar sentiment in 1996.

“TCPA’s purpose is to protect the individual telephone consumer,” it

commented. But, because even “the best laid plans [go] awry, enter-

prising attorneys have gleaned… a potent class-action weapon” from

what the court referred to as “the seemingly harmless packaging of

consumer protection.”

It is telephone terrorism and it has got to stop.-FORMER US SENATOR ERNEST HOLLINGS

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TCPA Enforcement:Too Much or Not Enough?Not everyone holds lawyers responsible for the late rise in TCPA suits.

Some attribute it to attorneys advocating consumer rights, or to collections

and marketing industry actors who now disregard the TCPA more often,

more boldly and by means of new tactics.

Loyola Law professor Spencer Waller, the co-author of a 2013 report that

suggests the number of intentional TCPA violations has recently increased,

says TCPA violation suits tend to require less time and litigative sweat than

those that deal with antitrust, securities fraud, or employment discrimina-

tion suits, for example. The rulings also tend to be more predictable. “If

lawyers see a probable violation, and have a good sense of how the law-

suit will turn out, they are going to be more interested,” says Waller. “I don’t

think of this as a bad thing.”

Waller’s report bases its claim on the fact that the number of entities pur-

chasing access to the National Do Not Call Registry declined since 2000,

as has the number of people in the U.S. working as telemarketers. The

number of Do Not Call list violation complaints to the FCC, however, multi-

plied exponentially during that time.

These findings infer that fewer people are doing more things they

shouldn’t be doing, says Waller. TCPA violators also increasingly operate

offshore, “spoof” their caller IDs and take advantage of Voice Over Inter-

net Protocols (VOIP) to conceal their identities.

58%

TCPA Lawsuits

Did you know?TCPA case filings

have increased58% between 2014

and 2016.

3687

3082

4860

2014 2015 2016

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An Ounce of Government Oversight, a Pound of Private ActionJustifiably or otherwise, private

litigators make use of the TCPA far

more often than federal agencies.

WebRecon reports 395 lawsuits

filed under the TCPA in February

2016 alone, up 16.5% from the

previous month and up 82.9% from

February 2015, illustrating that

TCPA suits continue to roll in at

increasing numbers.

The FCC issues precious few TCPA

citations in comparison.

The TCPA’s original design

anticipates this circumstance. In

1991, Congress “raised concerns

that the FCC might not have the

resources to pursue violators of this

bill” because it does not regulate a

violent crime. TCPA’s sponsors built

in a strong private right of action to

compensate.

Litigation, “coupled with limited

government enforcement, has

historically been successful for the

TCPA,” according to the Loyola

report. However, Waller points out

that private litigators cannot act

if they “can’t tie the infraction to

someone subject to the jurisdiction

of the U.S. courts.”

Government agencies, meanwhile,

have considerably more resources

in the international arena and can

call on the cooperation of their

foreign counterparts, says Waller,

who cites the example of the

Federal Trade Commission, which

“cooperates with similar consumer

agencies all over the world in fraud

investigations.”

The report calls for more

government enforcement of TCPA

for this and other reasons.

TCPA LITIGATION GROWTH: 2007-2015

- Source: WebRecon LLC | www.webrecon.com

Published January 24, 2017

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Telephone TerrorismWhile stakeholders disagree over who should ideally enforce TCPA

and how, most concur that the Act’s wording is an antiquated mess.

One law scholar called it “far from a model of legislative draftsmanship

or clarity.”

Born of the fax machine and landline era, contemporary legislation

now applies the Act to text messages, email and mobile phones.

TCPA first became law in 1991 as a check on the U.S. telemarketing

industry, which boomed during the previous decade. “Expenditures

on telemarketing operations have risen almost fivefold since 1980,”

according to a 1991 study by the International Information Exchange

Group.

Act sponsor and former South Carolina Senator Ernest Hollings made

his case to the 102nd Congress for better industry oversight. He

referred to automated telephone calls as “the scourge of modern civ-

ilization. They wake us up in the morning and interrupt our dinner at

night; they force the sick and elderly out of bed; they hound us until

we want to rip the telephone right out of the wall… These machines

are out of control, and their use is growing by 30% every year. It is

telephone terrorism and it has got to stop.”

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Compliance Costs. Non-Compliance Costs More.TCPA compliance costs money. Marketers Mobivity and HipCricket

attribute losses during late 2013 and early 2014 to compliance

under the amended Act.

Non-compliance can cost more. TCPA caps damages per

unintentional violation at $500. Should courts deem the violation

willful, the cap becomes $1500. Single calls that violate the Act in

multiple ways can mean $3000 in damages apiece.

Class actions can and do compound these fees. Pizza franchise

Papa John’s paid $16.5 million to settle one such case.

Entrepreneur Steven Kirsch unsuccessfully sued Fax.com for $2.2

trillion under TCPA in 2002.

Despite potential consequences, and whether or not TCPA

litigation is a passing trend, many collectors and marketers

continue to violate the Act both by accident and on purpose. A

recent study by marketer PerformLine estimated that 46% of all

websites that record Internet users’ contact information do not

conform to the TCPA’s newly amended standards.

As lawsuits under the Act continue to accumulate, Gordon and his

decade of industry experience see “no activity in the regulatory

or legislative landscapes to indicate that we’ll see big change any

time soon.”

“New interpretations come out sometimes, court cases change the

field a bit, legislation happens sometimes,” he said, but such things

“seldom move the industry substantially.”

$1500

$3000

$500

TCPA Non-Compliance Damages

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A TCPA Compliance Checklist Fortunately, there is a way to avoid paying millions of dollars in settlements. Here are the

top ten items you and your vendors need in order to ensure compliance right now. Make

sure you’ve checked off every item on this list before contacting another consumer:

☑ A TCPA compliant disclosure is presented to the consumer

☑ The disclosure meets my specific company/legal team compliance standards

☑ The disclosure states the identity of the telemarketers

☑ The disclosure declares that the call may be pre-recorded

☑ The disclosure states that communication may be via automatic telephone dialing system or SMS

☑ The consumer understands that signing is not a requirement to buy goods/services

☑ The disclosure is legible and conspicuously displayed

☑ The consumer gave express written consent

☑ Consent was given via my required consent mechanism—checkbox or other format

☑ There is a definitive record on file of the consent event

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