Caveat Vendor

FCC’s New Rules On Telemarketing Calls Take Full Effect In October

September 23, 2013

By Paul Hastings Professional

The Telephone Consumer Protection Act of 1991 (TCPA), which was adopted by Congress to protect consumers from unwanted calls, is receiving a makeover, courtesy of the Federal Communications Commission.  While some of these changes have already gone into effect, the final changes become effective on October 16 of this year.

The FCC’s new rules parallel the Telemarketing Sales Rule, adopted by the Federal Trade Commission (FTC) in 2008. The new rules will primarily affect companies not subject to the FTC’s jurisdiction (and therefore the Telemarketing Sales Rule), such as banks, common carriers, airlines and insurance companies.

The new rules make five principal changes:

(1)   Prior Express Consent Must Be In Writing. The TCPA prohibits telemarketing calls made with the use of artificial or prerecorded voice messages to residential or wireless lines without the recipient’s prior express consent. In addition, calls made to wireless phones with the use of autodialers (equipment capable of storing and dialing phone numbers) are prohibited without prior express consent.  Previously, consent could be obtained orally. Written consent can be in the form of an email, a website form, text message, telephone keypress or voice recording.

(2)   No More “Established Business Relationship” Exception For Prerecorded Calls To Residential Lines. Previously, a consumer with an established business relationship (“EBR”) with the seller was said to have implicitly consented to the call, fulfilling the “prior express consent” requirement. The EBR exception to consent has proven extremely controversial among privacy rights advocates, and the agency has decided to eliminate it completely.

(3)   An Interactive Opt-Out Mechanism Is Required For All Prerecorded Telemarketing Calls. The prior rule was that a toll-free number had to be provided as part of all prerecorded messages, allowing a consumer a point of contact to opt out of future calls. The new rule requires all prerecorded telemarketing calls to have a mechanism that allows consumers, at any point during the call, immediately to opt out of future calls and be added to the company’s do-not-call list.

(4)   A Tightened Limit On Permissible Abandoned Calls. Predictive dialers are devices that call several numbers at once and connect calls that are answered to sales representatives. When a sales representative is not available to take an answered call, the call is disconnected, or “abandoned.”  The TCPA limits the number of permissible abandoned calls to no more than three percent of all answered calls. The new regulation clarifies that the percentage is to be calculated within a single calling campaign, not across campaigns. 

(5)   Exempts Healthcare-Related Calls Subject To HIPAA.  In light of the strong privacy protections already provided by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the FCC is exempting all prerecorded healthcare-related calls to residential lines that are subject to HIPAA from its consent, identification, time-of-day, opt-out and abandoned call requirements.

Non-telemarketing, informational calls, such as those from non-profits and schools or calls for political purposes, are not considered telemarketing calls and remain exempt from these rules. Also exempt from the new rules are good, old-fashioned, manually-dialed telephone calls from a live person.

Caveat Vendor is Paul Hastings’ Consumer Issues blog. We welcome your feedback. Please contact our blog editor with any thoughts or suggestions.

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