Many marketing consultants advise companies to employ text messaging and telemarketing as a component of their marketing and advertising strategies.
Companies that do so, however, need to be mindful of complying with the 1991 Telephone Consumer Protection Act (the “TCPA”), which prohibits companies from sending auto-dialed text messages, voice calls, and faxes without specific consents and authorizations.
On October 16, 2013, two major changes to the TCPA went into effect:
- Prior Express Written Consent Required For Telemarketing: Companies must obtain and hold unambiguous written consent from customers before initiating any telemarketing call/text message; and
- “Established Business Relationship” Not Sufficient For Telemarketing: An established business relationship does not relieve companies of the obligation to obtain prior express written consent before making a telemarketing call/text message.
These changes follow a January 14, 2013 TCPA change that requires companies to ensure that artificial or prerecorded voice telemarketing or advertising calls have opt-out mechanisms.
What Should Companies Do Now?
The TCPA can affect any organization that sends text messages, voice calls, or faxes as part of its advertising / marketing campaign or outreach, whether such messages are sent through the company or a through a contracted third party marketing vendor.
Violations of the TCPA can be expensive. The TCPA permits a private right of action and statutory damages in the amount of $500 for each violation and up to $1,500 for each willful violation. The risk for companies is significant because the numbers of TCPA class actions are on the rise and the potential damages / settlement costs in these cases can run into the millions of dollars.
Given the changes that went into effect in October, businesses should review their TCPA / advertising policies to ensure that they are in compliance, so that they can avoid the possibility of paying onerous penalties or being involved in expensive class action litigation.
Further, even if companies that hire third party vendors to conduct telemarketing call / text message campaigns on their behalf, they should exercise care to minimize potential claims, including by requiring, for example, representations and warranties and risk shifting provisions in contracts.