With the increase in telephone solicitations, businesses need to be more aware of the legal restrictions surrounding their unsolicited sales calls. The Telephone Consumer Protection Act (TCPA), established in 1991, was designed to protect consumers from intrusive telemarketing phone calls, text messages, and faxes. However, many businesses inadvertently find themselves facing lawsuits due to TCPA violations, or calling someone who has been listed in the Do Not Call database. TCPA litigation not only tarnishes reputations but can also result in hefty financial penalties, especially the TCPA class actions.
This guide covers the essentials of TCPA compliance, common violations, applicable regulations, types of lawsuits, and practical tips for protecting your business against TCPA-related lawsuits.
The TCPA is a federal statute intended to safeguard consumers' privacy by regulating how and when companies can contact them. Enforced by the Federal Communications Commission (FCC) and revised in 2003 in coordination with the Federal Trade Commission (FTC), the TCPA limits the use of autodialed calls, prerecorded voice messages, and text or SMS messages without the prior express consent of the consumer.
Businesses cannot call numbers registered on the National DNC Registry without prior express consent.
The use of automatic telephone dialing systems or prerecorded messages is restricted, requiring written permission.
Businesses must obtain consent before sending marketing or transactional text messages or SMS messages.
Telemarketing calls can only be made between 8 a.m. and 9 p.m. (local time of the recipient).
Despite these clear guidelines, many companies fail to comply, often resulting in costly lawsuits.
Businesses are susceptible to TCPA violations, whether through ignorance of the law or oversight.
Any form of contact, whether via text message or call, without obtaining prior express consent or prior express written consent (with regard to prerecorded voice messages) is grounds for a violation. This includes both cold calls and messages to consumers who haven’t opted in to receive such communication.
Autodialed calls, which are frequently used by call centers, make dialing large numbers easier but also pose risks. Under TCPA guidelines, businesses must have prior express written consent to use autodialers when contacting consumers.
The National Do Not Call Registry allows consumers to register their numbers to avoid telemarketing calls. TCPA restricts telephone solicitations to consumers on this list without consent, which can lead to significant legal repercussions for violations.
Any company that makes telephone solicitations is required to scrub their calling lists against the national DNC registry at least every 31 days.
Repeated calls or messages can be construed as harassment. Consumers have the right to request no further contact, and companies must honor such requests to avoid non-compliance.
The Telemarketing Sales Rule (TSR) changes that are set to take effect in January 2025 will further limit how many total times a telephone solicitation or other telemarketing messages can be attempted with no answer or response.
For more information on the upcoming TSR rule changes, read our article about The 2025 Telemarketing Sales Rule here.
In addition to the national registry, companies should keep an internal list of individuals who’ve submitted their own do not call request to your company directly. Failing to maintain this list and follow through with these requests can also result in penalties or allow the individuals to file lawsuits.
These violations often go unintentional, but the penalties can be severe. Each of these infractions is actionable for TCPA litigation, and consumers increasingly know their rights under the act.
There are also individual serial litigants and professional lawyers who have made a profession out of TCPA class actions and other litigation. To learn how to avoid these, read our article on Litigator Trap Numbers here.
If an individual decides to revoke consent for your calls or telemarketing phone calls, your company should have a process to add them to your internal DNC registry immediately.
Understanding the types of lawsuits and TCPA class actions that can arise from violations is crucial for businesses to gauge the severity of the risk.
A single consumer files a complaint for a violation, seeking compensation for a particular incident. The penalty can be up to $500 per violation, or up to $1,500 per willful violation.
Commerical telemarketers should be aware that some nefarious individuals will send demand letters with no actual violations or phone numbers on the DNC registry, knowing that a certain percentage of companies will simply pay to avoid even the chance of litigation.
Class-action lawsuits consolidate claims from multiple consumers affected by the same violation, often involving thousands of individuals. Class-action suits can be financially devastating, as the per-violation penalty is multiplied by the number of affected individuals.
The Federal Communications Commission (FCC), which enforces TCPA rules, can take direct action against businesses violating TCPA. These actions may result in large fines and a mandate to cease certain practices immediately.
Calls made using an artificial or prerecorded voice message are an especially large focus of the FCC and FTC at the moment, and it has been ruled that AI-generated voice calls are considered violations.
Several high-profile TCPA cases have underscored the importance of compliance. In 2019, a large retailer settled a TCPA lawsuit for $20 million due to violations involving robocalls (the artificial or prerecorded voice calls mentioned above). This case and others illustrate how quickly penalties can escalate, particularly when thousands of consumers are affected.
The penalties for TCPA non-compliance can be significant. The TCPA allows consumers to claim statutory damages of $500 per violation or actual damages (whichever is higher). For willful violations, this amount can rise to $1,500 per violation (known as "treble damages").
For instance, if a business sends 1,000 unsolicited messages to consumers without meeting proper consent requirements, it could face a fine between $500,000 and $1.5 million if deemed willful. In class-action cases, this figure multiplies, potentially costing businesses millions of dollars in settlements and legal fees.
These penalties highlight why businesses should prioritize TCPA compliance, especially given the strict interpretation and enforcement by courts and the Federal Communications Commission.
To avoid TCPA lawsuits, businesses should implement robust compliance measures. Here’s how:
1. Obtaining Explicit Written Consent: Businesses should require explicit, written consent from consumers before initiating any form of contact. This step is critical when using auto-dialers or sending promotional text messages. Digital consent via opt-in forms on websites or apps is usually acceptable in an established business relationship, provided it’s documented properly.
2. Maintaining a Do Not Call List: Businesses should manage both a national Do Not Call list and an internal list. Consumers who’ve requested no further contact should be added to the internal list immediately.
3. Implementing Compliance Technology: Technology that prevents accidental contact with numbers on the Do Not Call registry or lacking proper consent can save businesses from liability. For example, certain software can verify consent and automatically maintain internal Do Not Call lists.
4. Training Staff on TCPA Guidelines: All team members involved in making a business telephone call, customer support, or outbound communications should be well-trained in TCPA and Do Not Call rules. Training programs should cover the types of contacts allowed for such communications, obtaining consent, and responding to opt-out requests.
5. Documenting All Interactions and Consent: Keeping accurate records of consumer consent and communication logs can serve as crucial evidence in the event of a lawsuit. Documented consent shows that the business made a good-faith effort to follow TCPA guidelines, potentially limiting liability.
A willful violation, especially using illegal robocalls (those to wireless phones seem to be treated more harshly in many cases) can get companies into deep (and expensive) trouble with Federal courts. Documentation can help companies prove that any voilation that may be made was not willful.
The regulatory landscape surrounding TCPA compliance is evolving, with recent trends impacting enforcement and compliance:
AI-driven tools are making it easier to identify TCPA violations, leading to increased accountability. These tools can detect patterns of frequent calls or texts (like those from automatic telephone dialing systems), making it harder for businesses to escape unnoticed violations.
More consumers are becoming aware of their rights under the TCPA, leading to a surge in lawsuits and complaints. With more awareness comes an increased likelihood of class-action suits for perceived violations.
As telemarketing tactics evolve, the FCC and other regulatory bodies are considering stricter interpretations of TCPA rules. Companies should keep an eye on regulatory updates to ensure compliance with any new requirements.
The Telephone Consumer Protection Act of 1991 was the original version, and it has been updated many times in the years since. In 2003 the FCC and FTC worked together on updates, and now the TSR is planned to take effect in January of 2025.
With these changes, staying informed and proactive is essential for compliance.
Protecting your business from TCPA lawsuits goes beyond meeting minimum compliance standards. Here are some best practices to reduce your risk:
1. Conduct Routine Audits: Regularly audit all communications processes and systems to ensure compliance. An audit can identify areas of non-compliance that may otherwise go unnoticed.
2. Invest in TCPA-Compliant Technology: Invest in technology that ensures your business’s communications adhere to TCPA guidelines. Look for call center software that automates compliance, checks for consent, and flags numbers on the Do Not Call list.
3. Seek Legal Guidance: Consult with legal professionals experienced in TCPA compliance to tailor your practices to current standards. This step is especially useful when considering new marketing tactics or deploying new technologies.
4. Monitor Consumer Preferences: Make it easy for consumers to opt out or set preferences for communications. Consumers who feel in control are less likely to file complaints, reducing your risk of lawsuits.
The costs of TCPA non-compliance are steep, and with increased enforcement, it’s more important than ever for businesses to stay vigilant. From obtaining explicit consent to implementing advanced compliance technologies, there are multiple ways for businesses to protect themselves from TCPA lawsuits. By investing in compliance, companies not only avoid lawsuits but also build trust with their customers.
Businesses involved in telemarketing or consumer outreach can benefit from a proactive approach to TCPA compliance. Staying informed of regulatory updates, documenting interactions, and following best practices can reduce legal exposure, helping companies maintain positive consumer relationships and avoid costly legal battles.
