What is the name of the federal law that sets forth guidelines regarding telephone solicitation?

The Telephone Consumer Protection Act (TCPA) is the primary federal law governing the regulation of telephone solicitations. It was first signed into law by President George H.W. Bush in 1991 and has remained the bedrock of federal telemarketing regulations ever since. Further legislation, such as 2019’s TRACED Act, and rulemaking by the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) have built on the TCPA’s foundation. Numerous court decisions—including recent, prominent ones from the Supreme Court—have further entrenched the TCPA’s regulatory preeminence.

TCPA & DNC Fines

Maximum Standard TCPA Fine

$500 per violation

Maximum Treble TCPA Fine

$1,500 per willful violation

Maximum DNC List Fine

$43,280 per violation

Who Must Comply With the TCPA?

The TCPA regulates telephone solicitations. Therefore, any person, business, or entity that conducts telephone solicitations should comply with the TCPA. The TCPA covers voice calls, faxes, VoIP calls, and text messages.

The text of the law itself defines “telephone solicitation” as "the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person, but such term does not include a call or message (A) to any person with that person’s prior express invitation or permission, (B) to any person with whom the caller has an established business relationship, or (C) by a tax exempt nonprofit organization.”

The TCPA does not solely apply to the entities that conduct calling campaigns. Entities may be found vicariously liable for TCPA violations committed by agents that the entities have hired to conduct their calling campaigns, even if the hiring entities did not commit the violations directly.

What Are the Requirements of the TCPA?

The TCPA contains a number of different provisions. In order to avoid committing TCPA violations, callers must comply with all of these requirements.

Calling Time Restrictions

Callers may contact residential consumers only between 8:00 AM and 9:00 PM (recipient’s time zone).

Internal Do Not Call (DNC) List

Callers are required to maintain an internal DNC list of consumers who asked not to be called or texted.

Automatic Telephone Dialing Systems (ATDS)

The TCPA restricts autodialed marketing calls and texts to cell phones and other devices where the recipient might be charged for the call without prior express written consent, and non-marketing autodialed calls without prior express consent.

Robocalls

The TCPA does not allow the use of an artificial or prerecorded voice to be used to call a residential landline or wireless number for marketing purposes without prior express written consent.

Identification Requirements

Among other things, the TCPA requires the caller to provide their name, the name of the company on whose behalf they are calling, and a telephone number or address which can be used to contact them again.

National Do Not Call Registry

Marketers are required to suppress phone numbers on the National Do Not Call Registry. Remember that some states have their own local DNC lists as well, separate from the federal list.

How Is the TCPA Enforced?

The TCPA allows for a variety of enforcement mechanisms. The most significant is a private right of action that allows consumers to bring individual lawsuits and class actions. In 2019 and 2020, more than 3,000 TCPA complaints were filed in federal court. The TCPA is a strict liability statute with uncapped statutory damages and per-violation penalties that can be as high as $500-per-violation. Willful violations can be trebled as high as $1,500-per-violation. All of these elements combine to make for settlements and judgments in TCPA class actions that routinely reach tens of millions of dollars. One TCPA class action resulted in $925 million worth of penalties against a debt collector.

Additionally, through the TCPA itself and its legislative successors such as the TRACED Act, the TCPA gives the authority to enact regulatory enforcement to a number of government entities. In particular, the FCC and FTC have broad regulatory powers to enforce the TCPA.

What Are the Biggest TCPA Risks?

Reassigned Numbers

Nearly 100,00 numbers are reassigned each day. Since consent is associated with the called party and not the phone number, the possibility of contacting reassigned numbers brings an enormous amount of TCPA risk.

Personal Liability

In certain situations, executives and compliance officers are being targeted personally for litigation stemming from TCPA violations. This risk compounds the already unnecessarily punitive nature of TCPA litigation.

DNC Violations

Following the Supreme Court’s decision in Facebook v. Duguid, TCPA litigators have turned their focus to alleging DNC violations. Additionally, an increased emphasis on state-level telemarketing regulations is likely to raise the risk level of DNC violations. There are different DNC lists—federal, state, and internal DNC—and DNC compliance is taking on renewed importance.

Inaccurate Data

Marketers often acquire contact information from outside lead generators. While this can be a valuable source of new leads, it also brings the possibility of inaccurate or outdated data. Having the wrong information is often the first step in the pathway to TCPA violations.

Why Is the TCPA So Costly?

There are four key elements of the law itself that combine to make it the perfect vehicle for truly outlandish settlements and judgments.

Strict Liability Statute

The TCPA is a strict liability statute, meaning no forgiveness is given for unknowing or good faith mistakes. Marketers can rack up thousands of violations (or more) without even realizing that they are doing so and the TCPA offers no forgiveness. In fact, there are treble penalties for knowing violations.

Uncapped Statutory Damages

This element of the TCPA makes it such a costly source of litigation is the fact that it has uncapped statutory damages. The only limit on how large a penalty can be assessed is how many violations were committed.

Private Right of Action

The law’s private right of action—and court opinion determining that it can be used to pursue nationwide class actions—allows for such enormous penalties for TCPA violations. While the FCC has, on occasion, levied large fines for violations of telemarketing laws, that sort of regulatory action rarely happens at the scale and frequency of class actions brought by plaintiffs under the TCPA’s private right of action.

Per-Violation Penalties

TCPA penalties are assessed on a per-violation basis—up to $500-per-violation and up to $1,500-per-willful-violation. Combined with the uncapped statutory damages, these penalties can add up.

These four elements combine to make the TCPA an unprecedentedly lucrative vehicle for litigation. This has, unsurprisingly, encouraged a veritable cottage industry of TCPA litigators and professional plaintiffs to seek out and, in some cases, manufacture as many and as costly TCPA lawsuits and class actions as possible.

Four Most Dangerous Elements of TCPA Litigation

Strict Liability Statute

Companies are legally responsible regardless of fault or intent

Uncapped Statutory Damages

Companies may be liable for exorbitant damages

Private Right of Action

Consumers may bring individual lawsuits and class actions

Per-Violation Penalties

Multiple TCPA violations can be applied to a single call

What About State-Level Telemarketing Laws?

There are dozens of state-level telemarketing laws, with new ones being passed every year. Many of these state laws are modeled on the TCPA and often make use of the National DNC Registry. But it is important to note that the TCPA expressly does not preempt state or local telemarketing regulations. Compliance with regulations at every level is mandatory.