The Telephone Consumer Protection Act of 1991 is a groundbreaking federal legislation that protects consumers from intrusive telemarketing practices. This law limits the hours businesses can legally make calls, prohibits specific equipment from being used, and compiles a national “do not call” registry to enforce its regulations. These apply to telemarketers, common carriers, and debt collection agencies. By instituting TCPA guidelines, citizens have invaluable peace of mind knowing their privacy is respected even during unsolicited phone conversations.
Businesses are embracing the benefits of SMS marketing due to its tremendous potential for success. Text messages generate an impressive read rate of 98%, leaving email in the dust with a mere 20%. If you want your customers to be informed expeditiously and maintain active engagement, there’s simply no better solution than texting them directly. But before anything else, businesses must comply with the TCPA in administering their SMS marketing campaign to avoid violations that lead to fines and penalties. The TCPA regulates various telemarketing practices, and understanding these regulations leads to better marketing strategies, customer trust, and loyalty.
What Is the TCPA?
The Telephone Consumer Protection Act of 1991 was passed to safeguard consumers from the potentially intrusive effects of phone solicitations and automated calls. This federal law creates a shield through SMS compliance against those who would take advantage of unsuspecting individuals by bombarding them with unsolicited messages. With TCPA, citizens are now granted greater protection regarding their privacy on telephone lines. Through this Act, the government has enacted regulations to curb unwanted solicitation calls, such as restrictions on the times of day that solicitors can call & equipment they can employ. An extensive ‘Do Not Call’ registry is also available for consumers, including telemarketers, debt collectors, and carriers.
President George W. Bush signed the Telephone Consumer Protection Act (TCPA) into law in 2002, formally codified as 47 USC § 227, and amending the Communications Act of 1934 to protect telephone subscribers from unsolicited telemarketing calls that can cause disruption and distress. Businesses found to be violating this act face heavy financial penalties should they continue these practices without consent or authorization.
Businesses and consumers must be informed about The Telephone Consumer Protection Act (TCPA) regulations to protect all parties. Consumers should be well-versed in their rights to take appropriate action if needed. On the other hand, call centers must remain knowledgeable about TCPA laws to avoid unintentionally violating them and facing penalties.
Who is required to comply with the TCPA?
Any businesses or organizations using telemarketing and automated calls must comply with the TCPA. It includes common carriers, debt collectors, and companies engaging in phone solicitation. Typically, the TCPA applies to the following entities.
- Individuals who initiate any telephone call or text message using an automatic telephone dialing system (ATDS) or an artificial or prerecorded voice.
- Businesses and organizations that make telemarketing calls or send telemarketing text messages.
- Sellers and telemarketers.
The Telephone Consumer Protection Act (TCPA) applies to calls and texts sent to wireless numbers or residential lines. It also extends to any communication promoting a commercial sale of goods/services. Essentially all non-emergency-based calling or texting is subject to TCPA regulation.
What Are the Fines and Penalties for Violating the TCPA?
Businesses that disregard TCPA regulations may face severe repercussions, such as hefty fines ranging from $500 to a whopping $1500 for each violation. Consumers who experience violations and abuse of telemarketing may also file a private right of civil action suit, which can result in additional penalties.
Fines and penalties are brought to the Federal Communications Commission’s (FCC) attention. The FCC will investigate whether or not a business violates TCPA regulations. If proven guilty, then the company may face fines and lawsuits. These include the following listed below:
- Companies that violate the National Do Not Call Registry will be hit with a hefty fine of $500 per offense.
- Any phone calls that breach the TCPA rules are subject to a fine of $500 per incident.
- If a consumer can testify that the business purposefully engaged in activities prohibited by TCPA laws, they are eligible for $1,500 per phone call.
On the other hand, there are also penalty exceptions in the form of mitigation factors, which the FCC may consider before imposing fines. If your business satisfies the criteria of the FCC’s “safe harbor” rule, you are exempt from sanctions or legal actions for sending out unsolicited contacts. To meet these requirements, it is essential that:
- You have created systems to adhere to the Do Not Call requirements, ensuring compliance with applicable regulations.
- You have kept all personnel up to date on the most recent training procedures.
- Uphold and monitor adherence to set protocols for optimal compliance.
- Keep an exclusive internal list of phone numbers your business is not permitted to call.
- Make sure to access the Do Not Call Registry at least 31 days before calling any consumer, and keep a record of your efforts for compliance.
- Affirm that any phone call made in violation of the Do Not Call regulations was an unintentional mistake.
Additionally, there are also new TCPA penalties that you must know. On December 31, 2019, the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act was officially enacted. This groundbreaking legislation increases the FCC’s legal authority to enact civil penalties of up to $10,000 for each call in cases with clear evidence of a willful violation of federal robocalling regulations.
What Is Regulated Under the TCPA?
Businesses must comply with three regulations under the Telephone Consumer Protection Act (TCPA). These regulations are:
1. Robocalls and Pre-recorded Voice Messages
Despite its alluring name, a robocall is not initiated by any robot. The exact definition of when an automated call or text is made using an autodialer has confused judges in various appeals courts and have interpreted it differently—so much so that the Supreme Court had to step in and settle this debate until Congress decides otherwise.
According to the Telephone Consumer Protection Act (TCPA), an autodialer is any device that can generate and store phone numbers, either randomly or in sequential order. This equipment applies to calls and text messages; telemarketers may use it as a tool for mass communication with consumers. With automated dialing systems, they can target thousands of people at once!
The definition of an autodialer still needs to be clarified and unsettled among federal courts. Therefore it’s paramount to exercise caution when sending messages such as texts with automated technology. Always ensure that you have obtained the recipient’s prior express consent before transmitting any message.
Additionally, in terms of prerecorded voice messages, the same protocol applies.
While businesses are legally allowed to call customers for marketing purposes, a live person must always be on the phone to remain compliant with the Telephone Consumer Protection Act (TCPA). It is strictly prohibited by law to use prerecorded voice messages without obtaining prior express consent from the customer.
2. Do Not Call Registry
The Telecommunications Consumer Protection Act established a National Do Not Call Registry that prohibits any third-party marketer from contacting anyone registered on it, with specific exemptions (like if they have permission).
The Federal Trade Commission governs the Do Not Call List and oversees any complaints of violations. To protect citizens from intrusive calls, you must register your business on the list to avoid being sued. Furthermore, you must access the registry at least 31 days before calling or texting customers and maintain a record of compliance efforts made.
3. Calling and Texting Time Restrictions
In addition to the Do Not Call Registry, the Telephone Consumer Protection Act also outlines when businesses can and cannot call or text customers. Companies cannot contact consumers in the customer’s time zone between 9 pm and 8 am. They are also prohibited from calling without prior express consent if that customer has previously requested in writing to be put on a “do not call” list.
Learn more about What’s the best time to Send Marketing Text Messages to ensure the efficacy of your SMS campaign and avoid violating this regulation.
What is Considered a TCPA violation?
Violations of the Telephone Consumer Protection Act can range from simple oversight mistakes to malicious intent. Generally speaking, here are three TCPA violations every business must be aware of and avoid.
1. Calls or Texts to Those Listed on the National Do Not Call Registry
Begin by respecting the wishes of those who do not wish to be contacted. The FTC (Federal Trade Commission) maintains and upholds a National Do Not Call Registry where consumers can add phone numbers to restrict telemarketing calls. This list, enforced jointly by the FTC, FCC (Federal Communications Commission), and state administrations, ensure customer privacy is respected across all levels.
If a customer has formally consented to receive text messages, you may still contact them even if they’re registered in the National Do Not Call Database.
However, there are also Do No Call Exemptions per the FTC. If your company is looking to call or text customers, you must become a Do Not Call Registry member. Fortunately, not-for-profit organizations are exempt from this requirement. However, for-profit companies that fit specific categories can register as exempt organizations and be exempted from needing to join the said registry. These include the following:
- Informational messages
- Polls and surveys
- Business-to-business calls
- Advocate for a political party or champion a candidate
- Inviting donations for a noble cause
- Reaching out to customers who are already established with your business.
It is important to remember that if you are not an exempt organization but have registered as such with the DNC registry, you may be subject to legal repercussions. These can range from civil fines and penalties to criminal charges.
2. Unsolicited Calls and Text to Residential Phone Numbers
The TCPA and Federal Communications Commission (FCC) have a strict no-tolerance policy against companies making unsolicited calls to residential or cell phones without obtaining prior written consent from the customer. Unless there has been an active commercial transaction in the past eighteen months, an “existing relationship” is any prior exchange between a customer and a business.
Automated dialing and prerecorded messages are strictly forbidden. Even though it’s permissible to reach out to potential customers if they’re not on the “Do Not Call” list, a real person must make the call for it to be legitimate.
3. Unsolicited Automated Calls and Texts to CellPhones
It is illegal for businesses to send unsolicited texts, just as it would be to make undesired calls. Companies must get written permission from customers before adding them to any contact list or sending marketing materials. This consent must be documented and stored for companies to comply with the law.
Customers must opt-in for communication from your business by checking a box, but this cannot be pre-selected.
How to remain TCPA Compliant?
Business owners must take the necessary steps to ensure that every organization member is aware and compliant with TCPA regulations. Here are five of most important things to consider about SMS Compliance:
Streamlining Opt-Ins and Opt-Outs
The Telephone Consumer Protection Act (TCPA) deems it essential to obtain consent from your patrons before sending any messages. Additionally, ensure that you provide them with the option of opting out of further communication with you. It may sound easy, but companies need help keeping track of customers who gave permission and those who opted out of future messages.
When sending out marketing promotions or product updates through text blasts, you need to be careful only to reach customers who have explicitly agreed to hear from you, steering clear of those clients who actively requested not to be contacted.
To remain compliant, practice opt-in and opt-out management while documenting which customers can be reached. Make it more convenient with a worthwhile SMS platform that records all activity; when customers respond to “STOP” or “CANCEL,” they are automatically removed from your list of opted-in contacts as per the TCPA regulations.
Streamline your double opt-in process with automated confirmation texts.
It is legally necessary to get an initial opt-in from your customers, according to the TCPA. However, if you also acquire double opt-in, this further secures and safeguards your customer relationships. If we look at it through a customer experience lens, customers often need to be made aware that they had permitted companies to contact them with marketing emails afterward. Thus, double opting in should be another layer of protection when dealing with new customers.
To safeguard yourself from potential customer disappointment, utilize the double opt-in system for text messaging. When a customer completes checkout and clicks on the checkbox to let you contact them via SMS, they may need to remember to do so. Including a keyword suggestion in your initial text allows customers to verify that they want messages from you – suggest something like “YES” as their response to you!
Streamline the process for your staff and executives by automating initial messages. Instantly send a double opt-in as soon as customers place an order or demand to be in touch with customer service personnel. This way, your system can ascertain which clients are on the mailing list.
Make sure your Terms and Conditions and Written Disclosures are Clearly Explained.
According to the TCPA, if a customer has permitted you to reach out with messages, they must understand what your message entails. Always be clear and concise when disclosing information during the first text exchange. Include all relevant terms & conditions in your initial communication either within or linked from the actual text – this way, and customers know exactly what to expect from you.
To make sure your opt-in messages are as effective as possible, each should contain the following information:
- Business name
- Purpose of messaging
- Expected frequency of texts per day, week, or month
- Terms and conditions
- Instructions for requesting help
- Instructions for opting out
- Register your 10-Digit Long Code Number
Verizon, AT&T, T-Mobile, and Sprint have collaborated to introduce the 10DLC program in Canada and America. This system aims to control A2P (application-to-person) texting from companies to their consumers (read: your clients). The thought behind this action is that providing insight into how businesses use A2P texting will help carriers give better assurance to customers while also lessening spam.
As an integral part of your text compliance, it is mandatory to register for A2P 10DLC and classify any applicable use cases. Disregarding these particular carrier requirements may lead you to face hefty penalties from the carriers if caught in a non-compliant state.
There are four ways to comply and avoid fees; these are the following:
- Register your A2P 10DLC
- Only send text messages to those who have explicitly given you their permission and consent to receive them.
- Avoid textually discussing prohibited content such as drugs, guns, and adult-oriented material.
- Abiding by the regulations is a must.
Furthermore, earning 10DLC registration will help your brand become more reputable in customers’ eyes. You don’t want phone carriers or customers to think you are a scammer. By staying up-to-date with all 10DLC standards, you can prove to your customer base that what you offer is trustworthy and genuine.
- Educate and Train Employees
Educating and training your employees should be a top priority, as well as setting up safety protocols to ensure compliance. Leverage technology where you can to support these efforts and prioritize consistent employee training sessions so that they understand the legal standards at play and what is expected from them.
TCPA compliance is vital for keeping your business legally protected and nurturing relationships with customers. Your employees must be aware of such standards.
Establish a well-defined corporate policy that enumerates all regulations and procedures for communication following the TCPA. It should be included in your employee manual and easily accessible from your internal knowledge base. Hold regular reviews to ensure everyone is aware of any alterations when regulatory changes occur. It will guarantee total compliance with the TCPA at all times.
What are some examples of Real-world TCPA Violation Settlements?
It is essential to adhere strictly to TCPA regulations, regardless of whether you are a brand or an agency working on behalf of a brand. High-profile cases demonstrate this point and emphasize the need for caution in telemarketing compliance.
- Dish Network – In 2017, Dish Network was forced to pay an astounding $341 million in compensation for defiance of the Telephone Consumer Protection Act (TCPA). A group of individuals filed a class action lawsuit against them, alleging that they had deliberately contacted phone numbers listed on the Do Not Call registry. In response to this, Dish attempted to claim that their telemarketing provider- Satellite System Network- should be held responsible instead. However, despite these efforts, the jury dismissed this argument and ultimately awarded $400 per call as punishment.
- Domino’s Pizza – In 2013, Domino’s Pizza had to pay nearly $10 million in a class-action lawsuit that found them guilty of sending out advertisements without prior consent from consumers. Additionally, the court discovered evidence of unsolicited marketing calls and promotional texts sent by Domino’s, leading to their hefty settlement amount.
- Wells Fargo – In 2015, Wells Fargo was forced to pay a $16.3 million settlement for multiple TCPA violations. These violations included placing numerous unwanted calls to customers utilizing prerecorded messages and sending them unsolicited marketing text messages without their consent.