One of the most heavily regulated areas in modern communications is telemarketing. The Telephone Consumer Protection Act (“TCPA”) prohibits certain types of calls and texts without customer consent. The consent rules, administered by the Federal Communications Commission (“FCC”), are complex and overlapping. Calls and texts to mobile phones, for example, are subject to differing rules depending upon the type of message, whether the message is automated, whether it contains prerecorded content or an artificial voice, and the content of the message (i.e., whether it is informational or includes advertising or marketing). In addition, there are a number of exceptions to the consent requirements for “free to the end user” messages, each with conditions and volume restrictions. With nearly 80% of U.S. households having mobile phones only, the stakes for such communications are higher than ever.

Over the past few months, several key rules have changed or are in the process of changing. This alert is meant to provide a high-level background on the changes in TCPA rules in order to aid entities in updating their TCPA practices and communicating with customers and potential customers in lawful and welcomed manners. As discussed further below, the FCC rules are changing in several broad areas. These rule changes will restrict the frequency of previously allowable communications, modify the way wireless providers may communicate with their customers, broaden a consumer’s right to revoke consent, and target lead generation activities, including comparison shopping websites.

Frequency Restrictions on Certain Communications Take Effect

For many years, the FCC has authorized package delivery, healthcare, banking, and other types of communications to be made without prior customer consent. These exceptions were adopted by the FCC over time but reviewed and codified pursuant to requirements of the TRACED Act of 2019.

In a December 2020 Report and Order,^[1] as required by the TRACED Act, the FCC reexamined exemptions it had previously granted to the restrictions under the TCPA for (a) calls to residential telephone lines and (b) calls to wireless numbers. The Exemptions Report and Order codified the exemptions, largely unchanged, but added limits on the number of calls/messages that may be sent under most exemptions. The paragraphs below focus on the exemptions tied to calls/messages to residential numbers and the effects of upcoming limitations on these exemptions.

Exemptions on Calls to Residential Numbers

Section 227(b)(2)(B) authorizes the FCC to adopt exemptions to the restriction on calls containing an artificial voice or prerecorded message to residential lines. Under this section, the FCC may exempt calls “not made for a commercial purpose” and calls made for commercial purposes that do not implicate customer privacy and do not include “the transmission of any unsolicited advertisement.” The FCC has adopted four residential-focused exemptions for: (1) calls to residential numbers not made for a commercial purpose, (2) calls to residential numbers made for a commercial purpose but not containing advertising or telemarketing, (3) calls to residential numbers by or on behalf of a tax-exempt nonprofit organization, and (4) “health care” calls to residential numbers made by an entity subject to HIPAA.

Notably, in the Exemptions Report and Order, the FCC made modifications to these residential-focused exemptions by limiting the number of calls to residential numbers that may be made in a particular time period and also requiring that such calls be subject to a called party’s right to opt-out of future calls. The FCC also adopted a six-month implementation period after the rules became effective to allow callers to make changes to their policies and procedures for artificial or prerecorded message calls to residential lines. However, due to delays for Office of Management and Budget (OMB) approvals and Petitions for Reconsideration, the FCC did not publish an effective date until January 2023. As such, the effective date for these new limitations is now set for July 20, 2023.

Specifically, relevant calls/texts are subject to the following new limitations:

• 47 CFR 64.1200(a)(3)(ii) – Calls not made for a commercial purpose. Artificial voice and prerecorded message calls to residential lines are permitted, but with two new limitations. First, the caller may make no more than three (3) calls within any consecutive 30-day period. Second, the caller must honor a consumer’s request to opt-out of any future calls they do not wish to receive made via existing mechanisms available for telemarketing calls.

• 47 CFR 64.1200(a)(3)(iii) – Commercial calls not containing an advertisement or telemarketing. Artificial voice and prerecorded message calls to residential lines are permitted, but with the same two limitations described above: the caller may make no more than three (3) calls within a consecutive 30-day period and must allow for consumer opt-out requests.

• 47 CFR 64.1200(a)(3)(iv) – Calls made by or on behalf of a tax-exempt nonprofit organization. Artificial voice and prerecorded message calls to residential lines are permitted, again with the same two limitations: the caller may make no more than three (3) calls within a consecutive 30-day period and must allow for consumer opt-out requests.

• 47 CFR 64.1200(a)(3)(v) – Calls that deliver a “health care” message made by, or on behalf of, a “covered entity” or “business associate.” This “HIPAA exemption” applies to artificial voice and prerecorded message calls to residential lines, but the FCC limited the number of calls to one (1) call per day to a residential line, up to a maximum of three (3) calls per seven-day period. In addition, the caller must honor a consumer’s request to opt-out of any future calls they do not wish to receive made via existing mechanisms available for telemarketing calls.

Given that the six-month implementation period has nearly run, those subject to the TCPA and relying on these exemptions will need to comply with the limitations added by the FCC in its amendments. This means that beginning July 20, 2023, callers must limit the number of calls they make to only three calls per consecutive thirty-day period for the first three categories of residential calls above and limit the number of HIPAA-related calls they make to one call per day, with up to three calls per seven-day period. They must also allow consumers to opt-out of any future calls that they choose. To ensure compliance, relevant callers should modify their practices to track the number of covered residential calls they make and confirm that they do not exceed the maximums set by the FCC. They should also check that they have appropriate opt-out procedures in place for consumers and honor any such opt-out requests.

New FCC Rulemaking Regarding Consent to Receive Communications

On June 9, 2023, the FCC released a separate Notice of Proposed Rulemaking (NPRM). In this rulemaking, the FCC seeks to strengthen consumers’ ability to grant and revoke consent for receiving robocalls or robotexts. For interested commenters, comments and reply comments on any portion of the NPRM are due on July 31, 2023, and August 14, 2023, respectively.

Three areas are of note:

1.  Limiting the Ability of Wireless Providers to Communicate with Customers Absent Consent

First, the NRPM proposes to require wireless providers to “honor their customers’ requests to cease autodialed, prerecorded voice, and artificial voice calls, and autodialed texts.” To accomplish this, the FCC plans to alter an earlier 1992 ruling in which it reasoned that wireless carriers are not required to obtain consent prior to initiating autodialed, prerecorded, or artificial voice calls to their own subscribers because these communications are ultimately not charged to the called party.^[2] This 1992 ruling is relied upon by wireless providers to initiate a wide variety of messages to their subscribers, including payment reminders, regulatory compliance messages and marketing messages. The Commission now proposes to limit these communications by applying restrictions similar to those applicable to other FTEU communications (e.g., package delivery, healthcare, banking), including:

• Voice calls and text messages must be sent to an existing subscriber of the wireless service provider

• Voice calls and text messages must state the name and contact information of the wireless provider (and for voice calls, these disclosures must be made at the beginning of the call)

• Voice calls and text messages must not include any telemarketing, solicitation, or advertising

• Voice calls and text messages must be concise, generally limited to 1 minute / 160 characters

• A maximum of 3 voice calls or texts during any 30-day period by a wireless service provider

• Ability of subscribers to easily op-out of future communications, including support for a “STOP” message and specific opt-out mechanisms for calls depending on the type of call

• Opt-out / revocation requests must be honored by the wireless service provider immediately.

Notably, these requirements, if adopted, would require, for the first time, that a wireless provider allow subscribers to opt-out of the communications. They also would limit the manner of communications, establish a maximum number of communications that could be directed to subscribers, and prohibit marketing communications except upon prior consent. 

2.  Additional FCC Proposals to Strengthen Consumer Revocation of Consent

In addition to the qualified wireless provider exemption above, the NPRM proposes other changes to give consumers a broader ability to control their consent. Notably, the rulemaking proposes to:

• Codify that consumers who have provided prior express consent to receive autodialed or prerecorded calls can revoke their consent in any reasonable manner

• Codify that the sending of “STOP” or a similar message that reasonably conveys a desire not to receive further messages creates the presumption the consumer has revoked their consent in a reasonable manner

• Codify that callers may not infringe on the right to revoke prior consent in any reasonable manner by specifying an exclusive means to revoke consent which precludes the use of any other reasonable method

• Require callers to honor do-not-call and consent revocation requests in a timely manner, meaning within 24 hours of receipt of such a request, rather than the 30 days previously allotted

• Clarify that if the texter chooses to use a texting protocol that does not permit reply texts, the texter would bear the risk of potential liability under the TCPA unless it (1) provides a clear and conspicuous disclosure on each consumer text that two-way texting is not available due to technical limitations and (2) clearly and conspicuously provides alternative ways for a consumer to revoke consent (e.g., a link or instructions to text a different number).

3.  Confirming Certain One-Time Confirmation Texts Do Not Violate the TCPA

In the rulemaking, the FCC also proposes to codify its Declaratory Ruling clarifying that a one-time text message confirming a consumer’s request that no additional text messages be sent does not violate the TCPA or FCC rules. However, the NPRM offers other clarifications and proposals to ensure this ability is not abused. Specifically, the proposal:

• Explains that senders can include a clarification request in a one-time confirmation text, but they must cease additional robocalls and robotexts absent an affirmative response that the consumer wants to receive further communications. This means that a lack of a response to a confirmation communication must be treated as a revocation of consent for all of the sender’s robocalls and robotexts.

  • The FCC is taking this action in response to a petition by the bank, Capital One, which sought confirmation that a text sender may request clarification in its one-time confirmation message of the scope of the recipient’s revocation request if the recipient had consented to receiving multiple categories of messages.

• Proposes that a one-time clarification message must not contain any marketing or advertising content or seek to persuade the consumer to reconsider their opt-out.

• Proposes that a “STOP” text in response to a one-time confirmation request does not allow the text sender to send a separate request for further clarification.

Potential Restrictions on Comparison Shopping and Lead Generation

On March 17, 2023, the FCC released a separate Further Notice of Proposed Rulemaking (FNPRM) in its TCPA docket. The FCC characterized the item as addressing what it calls a “lead generator loophole,” but the proposals in the FNPRM address TCPA consent more broadly.

First, the item proposed to ban the practice of entities obtaining a single consumer consent and then using this consent to deliver calls or texts from multiple marketers that go beyond the scope of the consent.  However, the FNPRM also recognized that consumers find value in comparison shopping websites and sought comment on how it can ensure that consumers can consent to further information from a site without receiving calls and texts from unrelated companies. As such, the FCC proposed that in situations where consumer consent is collected via a website, consent should only be considered granted to any callers “logically and topically associated” with the website used to collect the consent and whose names are clearly disclosed on the same web page. Therefore, there seems to be FCC interest in allowing a single consent to cover multiple entities, so long as certain conditions are met.

In addition, the FNPRM considers whether to clarify the E-Sign Act requirements in the TCPA context. Collectively, these clarifications could limit the way that TCPA consent is obtained today. Senders that participate in comparison shopping websites or that obtain leads from others should review their methods carefully in light of these proposals.

While comments and reply comments have already been received, the proceeding is still open, and the FCC has not yet adopted any final rules or clarifications. Interested parties may still present their views to the Commission.

Key Takeaways

The FCC Chairwoman is becoming increasingly aggressive in pursuing a consumer-friendly set of restrictions on automated messages and telemarketing activities. As such, senders of TCPA-covered communications should review their TCPA policies to ensure continued compliance with relevant rules.

Specifically, the changes noted above counsel for review of the frequency and type of communications directed to consumers as well as the means by which a sender collects consent to communicate with consumers. Senders should ensure that they have the recordkeeping capabilities necessary to comply with the rules and to demonstrate compliance if needed. Moreover, the rule changes will impact the means by which consumers can revoke consent and how quickly senders must honor such requests. Senders should review their revocation of consent procedures and be ready to comply with any new FCC limitations. 

Periodic review of TCPA practices is always a good idea. The FCC’s recent actions indicate that such a review may be particularly timely and necessary in the near future. 

FOOTNOTES

[1]   Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, CG Docket No. 02-278, FCC 20-186 (rel. Dec. 30, 2020) (“Exemptions Report and Order”). 

[2] Rules and Regulations Implementing the Telephone Consumer Protect Act of 1991, CC Docket No. 92-90, Report and Order, 7 FCC Rcd 8752, 8774, para. 45 (1992) (“1992 TCPA Order”).