Regulatory: New technologies, new risks

An update on recent TCPA developments that could require companies to reassess their outbound communications policies

Before wireless telephones became ubiquitous, the Telephone Consumer Protection Act (TCPA) was a minor compliance issue for most companies. Today, however, the TCPA is a major litigation risk for companies in a variety of industry sectors. With regulators, courts and plaintiffs’ class action attorneys all targeting TCPA violations, businesses should review their practices and stay apprised of the latest legal developments—especially when using predictive dialers, prerecorded messages, text messages and other technologies to interact with consumers on their mobile devices.

Passed in 1991, the TCPA imposes a series of restrictions on outbound communications, including voice calls and fax transmissions. Two provisions of the decades-old statute have become increasingly problematic for companies. First, the TCPA prohibits callers from using an “automatic telephone dialing system” (an autodialer) or a prerecorded or artificial voice message to call, inter alia, wireless telephone numbers, absent an emergency or the “prior express consent” of the called party. The Federal Communications Commission (FCC), which is charged with implementing the act along with courts such as the 9th Circuit, has determined that this restriction applies to both voice calls and text or short message service (SMS) messages.

Spurred by the avalanche of class action litigation and the rapid increase in wireless-only households, several organizations have filed petitions with the FCC seeking clarification of the term “autodialer,” which the TCPA defines as “equipment which has the capacity (a) to store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.” For example, Communication Innovators (CI) asked the FCC to confirm that certain predictive dialers are not autodialers when they:

  1. Are not used for telemarketing purposes
  2. Do not have the current ability to generate and dial random or sequential numbers

The FCC previously determined that some predictive dialers qualify as autodialers, concerned that telemarketers would otherwise use them to escape the TCPA’s autodialer restrictions. CI notes that the FCC did not explain which types of predictive dialing technologies qualify (or why), creating widespread confusion because many predictive dialers do not have the “capacity” required for an autodialer. GroupMe, Inc. also asked the FCC to confirm that its group texting service does not trigger the act’s autodialer restriction, arguing,like CI, that its systems do not have the requisite capacity.

Contributing Author

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Michele Farquhar

Michele Farquhar is a partner at Hogan Lovells, and a practice area leader of the firm's communications group. She focuses her practice on commercial and private...

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Contributing Author

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Mark Brennan

Mark W. Brennan is an associate at Hogan Lovells. His practice encompasses broadband technology and consumer protection, with a particular focus on global spectrum policy...

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