August 2006 - Call Compliance News
The FCC has specifically modified its caller ID regulation to provide that tax exempt nonprofit organizations are not required to comply with caller ID projection requirements, but that any person or entity that engages in telemarketing is banned from blocking caller ID information. The FTC applies the Telemarketing Sales Rule caller ID restrictions to for-profit entities placing solicitations for nonprofits, so the effect of the FCC action is limited to charities calling “in house”.
The FTC has announced a settlement with telemarketers retained by DirecTV. The telemarketers will pay a $75,000 civil penalty, and could be liable based on an “avalanche” clause for just over $400,000. DirecTV settled allegations against it.
The FTC has issued its final rule revising the fees required for access to the national “do-not-call” list. The annual fee is now $62.00 per area code with a maximum of $17,050.00 for access to 280 area codes of data or more. The first five area codes of data will still be free and the FTC will not charge any “exempt” entity which wishes to access the data. The Commission only received 12 comments to this fee increase, one from a consumer who wanted to be added to the registry.
I have recently been contacted by multiple entities regarding TCPA class actions for violations of the faxing provisions found in that law. New York’s court of appeals has rejected class action liability under the TCPA based on the fact that state law prohibits same. Many class actions under the TCPA, however, are proceeding in other states.
A federal court in Pennsylvania has ruled that even though federal courts do not have “federal question” jurisdiction over TCPA claims, they can exercise diversity jurisdiction over them so TCPA claims can be removed to federal courts in some circumstances.
A federal court in Pennsylvania has ruled that an insurer did not have liability to defend a hotel which allegedly sent unsolicited faxes in violation of the TCPA. There are many “coverage” decisions on both sides of this issue as
some courts have ruled insurers do have a duty to defend and pay these sorts of claims. The answer to the question will likely depend on the insurance policy in question and its language.
The Securities and Exchange Commission has issued a proposed rule requiring certain self-regulated entities to have a written “do-not-call” policy, train their personnel regarding “do-not-call” requests, and subscribe to the national “do-not-call” list. The rules also contain restrictions on the use of prerecorded messages.
A Bill has been proposed (HR 5325) which would allow individuals to opt out of political calls by adding their name to the national “do-not-call” list. Thus, the list would have more than just the telephone number as it would also need to include whether the person had opted out of just the current set of calls, or the current set of calls and political calls as well.
Many entities are reacting to the Supreme Court ruling regarding monitoring described in last month’s newsletter. I think it very safe to say that there will be a new wave of class actions seeking monetary damages under this statute for alleged violations of California’s monitoring law. You should ensure compliance with same and other state and federal rules immediately.
The State of Louisiana has recently indicated that it intends to enforce the state law requirement to purchase access to the state “do-not-call” list even against entities which acquire that data from a third party and “scrub” against it. Most states which continue to have their own state “do-not-call” list take this same position: you need to pay for the state “do-not-call” list even if you acquire that data from a third party. In short, the states want their money. Please contact me if you want ordering information regarding any state “do-not-call” list. Generally, it is acceptable for an agent to use the paid access number of a client, and in the case of the federal list, this is required. For purposes of the federal list, the seller, not the telemarketing service bureau, obtains access to the federal list and provides its SAN to its service bureaus.
The New Jersey General Assembly has passed a resolution urging the Internal Revenue Service to bar tax preparers from sharing any consumer or client information with marketers, including telemarketers.
New Jersey has amended its telemarketing “do-not-call” list law to require access to the Federal Trade Commission’s list no more than 31 days prior to the date any telemarketing call is made. Prior to this amendment, New Jersey law required quarterly access to the federal list.
New York has passed a revision to its state “do-not-call” list law to require that telemarketers access the national “do-not-call” list no more than 31 days prior to the date that any telemarketing call is placed.
North Carolina has passed a law barring unsolicited facsimiles using language very similar to the TCPA. The law has an escalading penalty of $500 for the first violation, $1,000 for the second violation and $5,000 for the third and any further violations. Reasonable attorney’s fees are also provided for successful plaintiffs. The statute does not refer to class action availability although the TCPA, which also does not refer to class action availability, has been used in these circumstances. Unsolicited faxing in North Carolina could conceivably be subject to state and federal law class action liability.
A notorious TCPA plaintiff has won an appeal of a TCPA claim which he was awarded only $700 for. This plaintiff commonly adds on many other alleged violations, including other FCC rules and state rules with regard to single calls. The appellate court did rule that the “knowing” multiplier found in the TCPA requires more than knowledge that the entity is making a telephone call. The court ruled that the defendant must “affirmatively know it is violating a regulation” for the treble damages provision to apply. Knowing does not interpret as “should have known”. You can expect the private plaintiff practice of “adding on” alleged multiple violations of other sections of law to continue, although because the court denied attorney’s fees to this plaintiff, these actions may be more pro se than by counsel.