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FCC Restricts Lead Gen and Makes Other Telemarketing Reforms
Wednesday, December 27, 2023

The Federal Communications Commission (“FCC” or “Commission”), at its Open Meeting on December 13, 2023, approved new rules under the Telephone Consumer Protection Act (“TCPA”) regarding texting that will impact many marketers. The rule changes adopted in the Second Report and Order (“Order”) are part of the agency’s ongoing efforts to combat “unwanted and illegal calls,” announcing a “comparatively new focus of combatting unwanted and illegal text messages.” The FCC finds that the “increase of unwanted and illegal texts … frustrate consumers, and scam texts can cause serious harm.”

Key Takeaways

  • One-to-one Consent: A consumer’s prior express written consent to receive robocalls or robotexts applies only to the single identified seller in the agreement.
  • The one-to-one Consent must come after a clear and conspicuous disclosure that the consumer will receive robocalls or robotexts and consent is optional and not a condition of purchase.
  • The content of the calls or texts must be logically and topically associated to the interaction (e.g., website) where the consumer provided consent.
  • Sellers will have at least twelve months to implement the consent and content changes.
  • The changes are controversial and already there has been petition for review filed in the U.S. Court of Appeals for the 11th Circuit in Atlanta.

The rule changes regarding prior consent and certain telemarketing calls, although not taking effect for at least a year, will require careful assessments of tele/text-marketing practices.

The changes evidence particular agency concern about perceived abuse of its TCPA prior express written consent requirements for autodialed and prerecorded and artificial voice message marketing calls/texts (i.e., robocalls and robotexts). The concern being that under current practices consumers may unknowingly “consent” through a single interaction with a comparison shopping or other type of website to be contacted by a multitude of unrelated commercial entities for marketing purposes. Moreover, these consent “leads” may be sold to other entities who offer services in which the consumer did not knowingly indicate an interest initially.

The new rules impose the following specific requirements to “stop abuse of our established consent requirements,” by “prohibiting lead generators, texters and callers from using a single consumer consent to inundate consumers with unwanted texts and calls when…[they] visit comparison shopping websites.” A more detailed view of the changes follows below.

One-to-One Consent – Texters and callers using automated or artificial or prerecorded voice technology must obtain a consumer’s prior express written consent from a single seller at a time. This requirement is intended to stop the practice of buried disclosures that appear in fine print on a website, only accessible through a hyperlink. The Commission noted that “one-to-one consent is required …to stop large numbers of robocalls and robotexts from many different entities based on a single grant of consumer consent.” The Commission did not specify how many sellers can be listed on a web page, but “if the web page seeks to obtain prior express written consent from multiple sellers, the webpage must obtain express consent separately for each seller.” The agency intends that the rule make it “unequivocally clear that texters and callers must obtain a consumer’s prior express written consent for calls or texts from a single seller at a time.” As noted below, the Commission does provide some guidance for how a seller may obtain multiple consents to different sellers in a single interaction that affirmatively includes multiple specified sellers and provides clarity on the limits to the FCC TCPA jurisdiction (i.e., this limitation does not reach other methods of communication).

Clear and Conspicuous Disclosure – The one-to-one consent must come after “a clear and conspicuous disclosure to the consenting consumer that they will get robotexts and/or robocalls from the seller.” “Clear and conspicuous” means “notice that would be apparent to the reasonable consumer.”

Logically and Topically Related – Robotexts and robocalls that result from consumer consent obtained on comparison shopping websites must be logically and topically related to that website. This requirement is to protect “against calls that go beyond the scope of consent, a scope that can be reasonably inferred from the purpose of the website at which they gave the consent.” For example, according to the Commission, “a consumer giving consent on a car loan comparison shopping website does not consent to get robotexts about robocalls about loan consolidation.”

Preserving Comparison Shopping Websites and Ease of Compliance – The Order does offer some guidance on “a variety of means for collecting one-to-one consent for multiple sellers…. For example, the website can offer a check box that allows consumers to specifically choose each individual seller that they wish to hear from.” Alternatively, the site may offer the consumer a “click through link to a specific business so that the business itself may gather express written consent from the consumer directly.” The Order also mentions other options not involving automated dialing or prerecorded or artificial voice messages – (e.g., manually dialed, email, information displayed directly on the third party website). Lead generators may collect and share leads about consumers interested in products and services, but will be unable to collect and share consents for telemarketing calls/text that are autodialed or include an artificial or prerecorded voice.

Further Efforts to Assist Small Businesses with Compliance – In an accompanying further notice of proposed rulemaking (“Further Notice”), the Commission does seek comment on how it can refine and expand its efforts to assist businesses, particularly small businesses, in complying with one-to-one consent requirement. The agency commits to monitoring the impact the rule has on these businesses and assisting them with compliance. Initial comments on the Further Notice will be due 30 days after a summary of the Order is published in the Federal Register; replies will be due 45 days after such publication.

Twelve-Month Implementation Period and Effective Date – The Order provides for a twelve-month implementation period to make the changes necessary to ensure that consent and content complies with the new requirement. This implementation period will start following Federal Register publication of the Order or 30 days after announcement in the Federal Register of the Paperwork Reduction Act approval of the information collection in this new rule, whichever is later. The FCC’s Consumer and Governmental Affairs Bureau will announce the effective date for the revised definition of prior express written consent by Public Notice.

In addition to tightening the consent rules, the Order would do the following:

  • Mandatory Blocking Following FCC Notification – Require terminating mobile wireless providers to block all texts from a particular number or numbers when it receives a Notification of Illegal Texts from the FCC’s Enforcement Bureau. If the Bureau issues a Notification of Suspected Illegal Texts, the provider is obligated to investigate and report back to the Bureau.
  • Coverage Under National Do-Not-Call Registry – Codify in the FCC rules the National DNC Registry’s existing protections applies to text messages.
  • Encourage Email-to-Text Messages – Encourage providers to make email-to-text an opt-in service as a way to reduce the number of text messages that consumers receive in that fashion.

Penultimately, the Further Notice also seeks comment on expanding blocking requirements, text message authentication and email-to text messages. Finally, there is certainly more to come on this front.

Petition For Review of FCC’s Order filed in Federal Court – The Insurance Marketing Coalition Limited already has filed a “placeholder” petition for review of the FCC’s Order in the United States Court of Appeals for the 11th Circuit. The petition contends, among other things, that the Order is arbitrary, capricious and an abuse of discretion. 

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