On December 13, 2023, the Federal Communications Commission ("FCC") voted 4-1 to revise consent rules governing the receipt of telemarketing communications under the Telephone Consumer Protection Act ("TCPA"). With an overarching goal of closing what it terms "the lead generator loophole," the FCC's consent rules will now require that websites and lead generators obtain a consumer's express agreement to receive automated telemarketing communications one seller at a time.
The FCC's new "one-to-one consent" rules have major implications for the telemarketing industry. As our readers are aware, the FCC has long been asked to provide guidance on the propriety of using "marketing partner lists" to generate leads under the TCPA. Recently, the FCC requested comment after publishing an initial Report and Order and Notice of Proposed Rulemaking on the issue. After considering voluminous commentary from parties ranging from a coalition of state Attorneys General to the Small Business Association ("SBA"), the FCC finalized its decision to revise the TCPA consent rules. The FCC's new consent rules will become effective 12 months after their publication in the Federal Register. Note that the prior iteration of the Report and Order, released on November 22, 2023, had a six month effective date.
The FCC's Newly Adopted Consent Rules
The FCC's newly adopted consent rules make unequivocally clear that:
- Lead generators must: 1) secure "one-to-one consent," or consumer consent for one seller to call and/or text at a time; and 2) no longer use hyperlinked lists of sellers or "marketing partners" in their TCPA consent language;
- "One-to-one consent" must be obtained after providing the consenting consumer with a clear and conspicuous disclosure that he/she will receive automated calls/texts, or artificial or pre-recorded calls. The seller bears the burden of proving such consent, and should maintain its own consent records, rather than relying on the lead generator; and
- The subject calls/texts delivered to the consenting consumer must be "logically and topically" related to the website on which the consumer's consent was obtained.
Please note that the FCC declined to define what constitutes "logically and topically associated;" but it did offer an example of what is not: "[a] consumer giving consent on a car loan comparison shopping website does not consent to get robotexts or robocalls about loan consolidation."
Important New FCC TCPA Consent Issues to Consider
One of the most outspoken critics of the FCC's rulemaking is the SBA. The FCC's newly adopted consent rules will force lead generators, which small businesses rely heavily upon, to make wholesale changes. As the SBA asserts, the new rules will cause major shockwaves throughout the lead generation and telemarketing industries. The FCC addressed the SBA's concerns and explained that, in the Agency's opinion, the newly adopted rules take a balanced approach. In contrast, Commissioner Nathan Simmington, who alone voted against implementing the new rules, criticized their adoption as a last minute "parachute" job, that was both arbitrary and capricious. Commissioner Simmington questioned the FCC's decision not to constrain consumer consent to automated calling/texting only from multiple companies that are selling a product "logically and topically" related to the subject of the customer's original inquiry, as opposed to just one seller.
Our readers may find some of the language contained in the newly adopted rules to be both circuitous and confusing. The FCC received, and attempted to respond to, a great deal of comments concerning its proposed consent rules. An important takeaway, however, is that, pending any future changes to the "one-to-one consent" rule, advertisers have alternatives. One alternative is that websites may employ separate checkboxes that allow consumers to individually identify sellers that they wish to receive automated telemarketing communications from. Two other alternatives are available to businesses willing to consider manually dialing prospective customers (without utilizing an artificial or prerecorded voice):
- If a consumer provides consent to be contacted by a specific seller, for up to 3 months following the date of such request, that marketer does not need to scrub against the Federal Do-Not-Call Registry ("DNC"), nor have a telemarketing license for the state in which the dialed consumer resides in order to call the consumer.
- Generally, if a consumer is cold-called, his/her number telephone number must be scrubbed against the Federal DNC and state (in which the consumer resides) Do-Not-Call registry, and, in many cases, the marketer must have a telemarketing license for the state in which the dialed consumer resides.
Of course, what constitutes a manually dialed call as opposed to an autodialed call is not a simple analysis, with the answer often differing across jurisdictions and from court to court.
The FCC's New Consent Rules are Extremely Important for all Lead Generators and Telemarketing Businesses
Countless governmental authorities and private interest groups have been asking the FCC for years to more aggressively combat unsolicited telemarketing practices. On December 13, 2023, the FCC took decisive action. Although there were indications that the FCC planned to address existing regulations concerning what constitutes proper consent under the TCPA, few expected the wholesale changes contained in the latest version of its rulemaking.
To reiterate: businesses must migrate away from the use of all marketing partners lists, whether hyperlinked or directly available in their TCPA consent language. Contained within the FCC's rulemaking are many other consent-related issues that businesses must consider if they are lead generators or rely on them for consumer leads. While the rulemaking's prohibitions may be daunting, alternatives exist, and there is upside – leads will be of higher quality and more likely to result in sales.
The grace period officially ends 12 months after the FCC's new rules are published in the Federal Register. Additionally, if the rules are challenged in court, their implementation could be further delayed (or even prevented). Still, to limit the risk of enormous exposure under the TCPA, companies should take steps now to carefully review the language of, and their procedures used to, obtain prior express written consent. The FCC has made clear that it will continue to seek comment on ways to improve the "one-to-one consent" rule. The FCC has delegated outreach on the issue of compliance with the new FCC consent rules to the Consumer and Governmental Affairs Bureau, which will provide interpretive guidance to small business lead generators and lead buyers.
As always, it is important to ensure that your business retains experienced counsel to guide you in a field where compliance has become much more precarious.
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