On December 13, 2023, the Federal Communications Commission (FCC) ushered in a new era by enacting transformative rules, marked by a 4-1 vote, aimed at addressing what it viewed as the lead generation loophole. The FCC’s Second Report and Order, released on November 22, 2023, was poised to signify a monumental shift in lead generation practices, mandating prior express written consent for calls or texts specifically on behalf of one seller at a time. Despite voracious opposition from small business and industry groups, the FCC adopted Report and Order. With six months to become compliant, this blog post delves into an analysis of the implications of these new rules on lead generation practices, offering insights into the components of the adopted Report and Order, legal implications, and concluding with recommendations for businesses navigating this evolving regulatory landscape.

Key Components

Lead generation has long been the secret sauce for connecting with potential customers. Lead generation on comparison shopping websites involves users sharing preferences and contact details, which are then converted into leads. These leads are subsequently relayed to relevant businesses, enabling them to engage with potential customers. The overarching aim is to nurture these leads through effective follow-up, providing additional information, and ultimately converting interested users into customers, a process applicable to various industries and lead generation platforms.

However, enter the FCC’s new rules, and the landscape undergoes a seismic transformation. On December 13, 2023, the FCC voted 4-1 to enact the Proposed Rules, limiting consent to one-to one, allowing the blocking of “red flagged” robotexting numbers, codifying do-not-call rules for texting, and promoting an opt-in approach for delivering email-to-text messages. These changes are set to take effect six months after enactment.

Once the new rules take effect, businesses will be required to secure a consumer’s prior express written consent, but here’s the twist – exclusively for calls and texts initiated through an automatic telephone dialing system (ATDS), prerecorded message, or artificial voice, and limited to “a single seller at a time.” This isn’t just a rule; it’s a game-changing move that reshapes how consumers provide consent in a world brimming with lead generation and comparison-shopping websites. Obtaining consent individually for each seller involved in lead generation can be administratively complex and inefficient. It requires a separate process for each seller, potentially leading to a cumbersome experience for both businesses and consumers.

Report and Order Insights

The recently embraced FCC Report and Order redefines the landscape for marketing calls and texts. Here’s a detailed exploration of the pivotal legal aspects:

First, the FCC orchestrated a paradigm shift, requiring businesses to secure a consumer’s prior express written consent from a single seller. This marks a departure from the past, emphasizing the need for distinct consents even in a digital marketplace teeming with multiple sellers.

While lead generators enjoy some flexibility, constraints accompany the privilege. The expectation is that consumers can consent to multiple sellers on a single page, but the FCC demands a direct, explicit mechanism, sidelining the efficacy of mere hyperlinks.

Transparency takes center stage as the FCC underscores the necessity for clear and conspicuous disclosures. Sellers must now possess concrete evidence of consent, moving away from reliance on lead generators for proof.

For the first time, the FCC asserts that calls and texts to DNC Registry numbers necessitate prior express invitation or permission, substantiated by a signed, written agreement.

Terminating providers now shoulder the responsibility of blocking all texts from specified numbers upon FCC notification. The “block-upon-notice” requirement reshapes provider responsibilities, elevating vigilance to a new level.

Finally, while not mandatory, the FCC nudges businesses towards adopting email-to-text as an opt-in service. The prospect of a potential rulemaking looms on the horizon, hinting at a transformative shift in email-to-text compliance.

Practical Steps Forward

Considering these regulatory changes, it is crucial for businesses to proactively reassess their lead generation practices and vendor relationships, particularly under the guidance of experienced legal counsel, such as Bradley. The granted six-month implementation period provides a window of opportunity for businesses to conduct thorough investigations and align with these new regulations. In anticipation of an expected wave of TCPA class action lawsuits, working closely with seasoned Bradley counsel will help businesses adopt a strategic and compliant approach to lead generation. This proactive stance ensures that businesses are well-prepared to navigate the dynamic and evolving regulatory framework.