The Federal Communications Commission (FCC) recently issued citations to two companies charged with violating the Telephone Consumer Protection Act (TCPA) consent requirements for autodialed or prerecorded calls to wireless numbers.

Under TCPA rules that became effective in October 2013, a caller must have a consumer’s “prior express written consent” for all autodialed or prerecorded telemarketing or advertising calls or texts to wireless numbers. The rules require such consent to be evidenced by a written agreement signed by the person who will receive such calls. The agreement must include a clear and conspicuous disclosure informing the person signing that (1) by signing the agreement, the signer is authorizing autodialed or prerecorded telemarketing or advertising calls or texts, and (2) the person signing is not required to sign the agreement as a condition of purchasing any property, goods, or services.

One of the citations was issued to a bank that offered online banking services and allowed customers to enroll in Apple Pay. According to the citation, the bank’s services agreement for customers enrolling in online banking and its terms and conditions for customers enrolling in Apple Pay stated that by providing a cell phone number when enrolling for online banking or Apple Pay, a customer was consenting to receive marketing text messages and e-mails to that number. In addition, the Apple Pay terms and conditions provided that if the customer revoked such consent, the bank could suspend or cancel the customer’s ability to use Apple Pay.

The other citation was issued to a company that is described by the FCC as providing “a transportation matchmaking service to consumers in various metropolitan areas throughout the United States.” According to the citation, the company’s terms of services for consumers signing up to use the company’s services stated that by becoming a user, a consumer was consenting to receive communications to the cell phone number he or she provided. Those communications, it stated, could include autodialed or prerecorded calls and texts about promotions run by the company or third parties.

The terms of service also provided that a consumer could opt-out of promotional communications by following unsubscribe options provided by the company. In addition, it included the consumer’s acknowledgment that although he or she was not required to consent to receive promotional communications as a condition of using the company’s services, opting out could impact the consumer’s use of the company’s services.

The citations describe the bank’s services agreement and terms and conditions and the company’s terms of service as “a blanket agreement—that is, an agreement that [the bank or company] requires all consumers to affirm in order to obtain service, but does not allow any opportunity for consumers to provide input on the terms.” The FCC found that the bank and company had violated TCPA rules by requiring consumers to consent to receive autodialed or prerecorded telemarketing or advertising calls or texts as a condition of using the bank’s and company’s services.

The FCC also found that the bank and company had violated the requirement in the TCPA rules that “prior express written consent” to receive prerecorded or autodialed telemarketing or advertising messages must include a clear and conspicuous disclosure informing the consumer that he or she is not required to sign the agreement giving consent as a condition of purchasing any property, goods, or services. The FCC found that the bank had required such consent, noting that the bank “threatens” to suspend or cancel a consumer’s ability to use Apple Pay if consent is revoked.

With regard to the company, the FCC found the company’s opt-out disclosure to be “illusory in nature.” According to the FCC, its staff discovered that when they followed the opt-out instructions, they could no longer receive the security confirmation text messages necessary for logging into their accounts with the company which made it impossible for them to use the company’s services. 

The citations direct the bank and company to take immediate steps to comply with TCPA rules and warn that they “may be liable for significant penalties” if they fail to comply. (The citations were issued pursuant to the Communications Act of 1934, which provides that the FCC may not impose monetary forfeitures against entities that are not FCC licensees, permittees, or authorization holders unless it has first issued a citation, given the entity a reasonable opportunity to respond, and the entity has subsequently engaged in the conduct described in the citation.) While the bank and company have the opportunity to avoid FCC penalties, the citations would appear to expose the bank and company to the risk of private TCPA actions. In such actions, violations can yield damages equal to a minimum of the greater of $500 or actual damages per violation, triple damages for willful violations, and unlimited class action liability.