Compliance Corner

Dialing Down Disturbance: Understanding the FCC’s New  Rules Aimed at Cracking Down on Robocalling and Text Messaging

By: Deborah G. Solmor and Terance A. Gonsalves

Welcome to this issue of “Inside Out,” where legal and digital converge. In this edition, we unravel the FCC’s latest regulatory moves aimed at its continued crackdown on perceived abuses of business to consumer robocalling and text messaging.

On November 22, 2023, the FCC issued a mouthful of a document – its Second Report and Order and Second Further Notice of Proposed Rulemaking, which we will just call the “Order,” focused on enhancing consumer protection in the areas of text messaging and lead generation. From requiring mobile wireless providers to block illegal texts, to extending Do-Not-Call protections to text messaging and clarifying that comparison shopping sites must get consumer consent one seller at a time, these regulations are designed to reshape the way we communicate and do business. But fear not, we offer some practical guidance to ensure both compliance and business continuity.

The Order was considered and voted on at the Commission’s December 13th meeting – and it passed in a 4-1 vote, with Republican Commissioner Nathan Simington dissenting, noting that while he supports the logically and topically related rule, the Commission is “over our skis,” when it comes to one-to-one consent. According to Commissioner Simington “the factual record on the question of one-to-one consent is so thin, and the Report and Order so impoverished in its reasoning supporting a rule upending the consumer financial products industry, that it gives every appearance of an arbitrary and capricious action by the Commission. The Order will take effect in about six months, thus, it is critical to understand the new rules and to prepare to comply. So, let’s break down the most important parts:

Lesson #1: One-to-One Consent Is the New Sheriff in Town:

The FCC is focused on ensuring consumers hear only from sellers they want to hear from and on reducing the numbers of sellers who call or text a consumer as a result of consent. In particular, the Order focuses on eliminating the practice of obtaining consent to be contacted by a list of “partners” whose identities are only available by hyperlink and are not necessarily related to the product or service the consumer believes they are consenting to hear from. Thus, the Order requires that consent by clear and conspicuous and “one-to-one consent.” In other words, consent to one seller at a time.  That said, the FCC notes that the Order does not limit the number of sellers than can be listed on web page, only that consent is obtained separately for each one.  This is what the FCC refers to as “closing the lead generation loophole.”

Lesson #2: Logical and Topically Related. . . Say What?

In addition to one-to-one consent, the consent given to receive calls and texts must be logically and topically related to the website on which consent was given. The FCC wants to ensure that there is a connection between the website’s product and the entity for whom consent is given such that a consumer is not contacted by a seller of a wholly unrelated product of service. For example, according to the FCC, “a consumer giving consent on a car loan comparison shopping website does not consent to get robotexts or robocalls about loan consolidation.”

Lesson #3: New “Textpectations:” The DNC Registry Protections Extend to Text Messaging

The Order extends the Do Not Call Registry’s protections to text messages as the FCC sees this as a logical next step, since under their rules, texter must have the consumer’s prior express invitation or permission before sending a marketing text to a wireless number in the DNC Registry. The basis for this new rule is to create continuity such that text messages to wireless numbers are “calls” for both the TCPA and the DNC protections.

Lesson #4: Email-to-Text Messages Are on the FCC’s Radar

In this Order, the FCC encourages providers to have their consumers opt-in to email-to-text messages. The FCC does so because several commenters claimed that texts originating from email addresses, rather than telephone numbers, account for a significant percentage of fraudulent text messages. While this Order only encourages providers to obtain consent for email-to-text messages, the FCC is pressing in its next round of rule-making to require providers to do so.

Thoughts from the Inside

  • See the Forest for the Trees: While the new rule requires a one-to-one consent per seller, the FCC states that it is not trying to put comparison shopping sites out of business: “Such websites are useful both to consumers, who are seeking specific goods and services, and businesses, including small businesses seeking new customers.” The FCC offers two concrete compliance examples:
    • Offer a consumer a check box list that allows the consumer to specifically choose each individual seller that they wish to hear from.
    • Offer the consumer a clickthrough link to a specific business so that the business itself may gather express written consent from the consumer directly.
  • The Burden is on You: Paragraph 41 of the Order reminds us that the burden is on the texter or caller to prove that they have consent that satisfies the TCPA and FCC rules. Therefore, while the seller may not rely on the lead generator to retain proof of consent, it is critical that the party obtaining the consent have a robust method of proving that they have in fact obtained consent that satisfied the prior express written consent standard. Additional proof can include visual playback or other provable methods for obtaining and keeping records of consent.
  • Apply Your DNC Best Practices to Text Messaging Campaigns: Before texting, be sure to scrub the numbers against the DNC registry and continue to maintain an internal Do Not Call list that applies to texting which includes those who have opted out and asked not to be contacted. Another important aspect of compliance is training – ensure you are training those that work in this area and that they are abreast of these new rules.
  • Focus On Ways to Minimize Risk: Make it clear to your partners that non-compliance with these rules won’t be tolerated. It’s not just your reputation on the line; it’s theirs too. Develop clear contractual agreements with your partners that enforce compliance and outline consequences for non-compliance.

Thoughts From The Outside

  • The Plaintiffs’ Bar is Thrilled: The FCC states the TCPA provides it the authority to implement these new rules. For the plaintiffs’ bar, that means new avenues to the courthouse where more TCPA class action lawsuits can be filed. Failure to comply with these new rules will create the risk of more TCPA lawsuits.
  • Consent Continues to be the Key Defense: Valid prior express written consent still remains the best defense to mitigate the risk associated with the telemarketing laws. Here, it protects you against TCPA DNC claims for telephone calls and text messages whether sent manually or via an automated telephone dialing system. One-to-one consent may be more cumbersome, but it is also the gold star for the defense of TCPA lawsuits.
  • Text Message Authentication is Coming: The Second Further Notice of Rule Making will seek comment on text message authentication and spoofing. While the FCC has not yet adopted text message authentication requirements, it is clearly something on its radar screen – if it is feasible to do so. The next round of rule-making will solicit comments on this and may lead to text message authentication requirements.

Final Thoughts

As we navigate the evolving landscape of telemarketing regulations, it’s paramount for lead generators to stay ahead of the curve. While the FCC’s latest Order imposes challenges on the industry, there are also opportunities for those willing to adapt creatively. The shift to one-to-one consent may be a game-changer that reshapes the way the lead generator community conducts business. To truly grasp the nuances and unlock the potential for growth within these new parameters, we encourage you to read the Order and understand the intricacies of the updated requirements. You will not only equip yourself with the knowledge needed for compliance but also pave the way for innovative strategies that can keep your business thriving in the dynamic seas of telemarketing. So, seize the opportunity, read the FCC’s latest order, and let creativity be your guide as you continue to steer your business toward profitability and success while maintaining a strong focus on compliance.