New FCC regulations are going into effect on October 16, 2013 as part of the Telephone Consumer Protection Act (TCPA). These regulations apply to all United States marketing SMS traffic, with few exceptions, as explained below. Bulletin requires all clients to be compliant with these new laws as outlined in our Master Services Agreement.
As part of the new TCPA regulations:
• Marketers must have explicit prior written consent for certain types of marketing text messages sent to consumers
• The new law puts the burden of proof of this consent on the marketer.
• There are stiff penalties for failing to comply – from $500-$1,500 per text message or call.
• This new law is anticipated to open the door for numerous class action lawsuits on behalf of consumers.
Here’s how you can make your operations compliant, specifically looking at leads generated online:
The TCPA applies to all voice and SMS text messages transmitted via an autodialer for marketing purposes. For the purposes of the law an “autodialer” means any system that has the capacity to produce, store, and call telephone numbers that have been randomly or sequentially generated. The definition may also extend to bulk messaging and calling lists of numbers acquired for marketing purposes.
Beginning on October 16, prior written consent must be obtained before autodialling any cell phones or residential landlines.
What constitutes written consent?
Besides actual handwritten consent, digital signatures that are compliant with the E-SIGN Act are permissible. Written consent can be obtained via email, website form, text message, telephone keypress or voice recording.
The consent must include “a clear and conspicuous disclosure” that the consumer will receive autodialed voice calls or SMS messages for marketing purposes, that consenting to these messages is not a condition of purchase, and the consumer must provide a phone number at which to receive these messages.
☐ By checking this box I consent to receive autodialed marketing calls and/or text messages from [Marketer’s Name] at the provided telephone number. I understand that granting this consent is not a condition of purchase.
If there is any dispute concerning consent, the burden of proof is on the marketer to demonstrate that the consumer unambiguously consented to the marketing communications. It is a marketing best practice to maintain a record of this consent for at least 5 years. A thorough record of an enterprises consent process should include the code and screenshots of any landing or site pages on which customers can consent to marketing communications, as well as individual records of the consent, ideally accompanied by the IP address from which the consent was granted.
If you purchase leads, you must make sure that your suppliers are compliant with the new laws. The $1.7 billion lead generation industry is expected to be dramatically affected by the new law.
Another important change to the TCPA that goes into effect on October 16 is that having an “established business relationship” is no longer an exemption to the need for obtaining consent to receive telemarketing/SMS communications. Previously, in some circumstances having this established relationship exempted the company from the need to obtain written consent. This provision no longer exists.
Class-action lawsuits surrounding the TCPA have been making legal news over the past few years, and have increased at least 40% in 2013 alone. In November a group of Papa John’s franchisees were found guilty of sending unsolicited SMS marketing and face up to $250 million in fines. More recently, the shoe company Steve Madden, Ltd. paid $10 million to settle a lawsuit alleging that they did not receive consent for any of their SMS marketing initiatives.