The Federal Communications Commission’s (FCC) rule requiring telemarketers to obtain one-to-one consent for autodialed calls/texts and robocalls is set to go into effect on January 27, 2025.
The new rule, which supplements the Telephone Consumer Protection Act (TCPA), is intended to close the so-called “lead generator” loophole, the practice of tying a single blanket consent to a list of marketing affiliates that could have hundreds of sellers in different industries. The TCPA, which regulates telephone and text marketing, already prohibits robocalls and autodialing absent express written consent from the consumer.
The new FCC rule defines “express written consent” as being limited to a single identified seller and “logically related” to the content of the consumer’s search. The rule also expressly applies these requirements to text messaging and affirms that consent must be based on proper disclosures to the consumer and compliance with E-Sign act requirements.
Whom Does the New FCC Rule Apply To?
This rule applies to any business that uses (a) an Automated Telephone Dialing System (ATDS) to make outbound marketing calls or texting, or (b) robocalling to generate customer leads. An ATDS is defined as having the capacity to generate and dial phone numbers using a random or sequential number generator. Robocalls in this context are outbound marketing calls that utilize a prerecorded message or artificial voice.
These businesses include lead generators that develop leads for sellers, including comparison shopping websites like LendingTree, and lead buyers looking for interested potential buyers for their services. Lead buyers cross numerous industries, but some prominent players include home improvement contractors, financial/loan services vendors, and even law firms.
Why is the New FCC Rule Important?
The new rule change is expected to create a flood of new TCPA litigation involving lead generators and lead buyers who are not compliant. Consequently, Lead Generators and Lead Buyers alike are now racing to avoid the risks by implementing appropriate compliance procedures.
The TCPA provides for a private right to sue for violations, and establishes statutory damages of $500 per violation, or $1,500 if the violation is deemed willful. Exposure ranges from individual claims by professional pro se TCPA plaintiffs to large class actions by experienced TCPA class action attorneys. Since many sellers go through thousands of calls per week, a class action can create significant potential exposure.
Our Adams and Reese attorneys will monitor the implementation of the new FCC rule into the new year and its impact on the telemarketing industry.
