New FCC Ruling on Robocalling: A Station Guide

Membership, FCC, General Management

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Co-authored by Judith A. Endejan, attorney at Garvey Schubert Barer

As if public fundraising didn’t have enough challenges! In 2015 the Federal Communications Commission (“FCC”) issued a declaratory ruling on robocalling that could make public development staffs head for the aspirin bottles. Some nonprofits engage in “robocalling” as part of fundraising. This practice involves calls or text messages (the ruling affirms that SMS text messages are covered by the TCPA) made either with an automatic telephone dialing system (“autodialer”) or with a pre-recorded or artificial voice. It even includes internet-to-phone text messaging sent from a computer to a wireless phone. Robocalls can be used for many purposes as an efficient way to connect with supporters. However, their use is subject to restrictions in the Telephone Consumer Protection Act (“TCPA”), as interpreted by the FCC.

The most recent pronouncement by the FCC attempts to clarify its existing rules but really highlights the risks of robocalling that nonprofits need to be aware of. Of course, the safest practice might be to cease robocalling because the TCPA does not apply to calls or texts that are placed manually (i.e., by a person). If that does not work for your organization, then be aware of key aspects of the FCC’s “clarified” rules.*

1. The Basics

Here is a brief refresher on the elements of the TCPA:

For-profit:

  • Robocalls require express written consent.
  • Cannot call those on National Do Not Call registry (must search it every 31 days, and must maintain company-specific DNC list.)
  • Must ID organization and telephone # at start of call.
  • Consent cannot be transferred.

Nonprofit:

  • Robocalls require prior express consent (oral or written) and no consent for residential landline.
  • Exempt from DNC restrictions.
  • Must ID organization and telephone # at start of call.
  • Consent cannot be transferred.

Telemarketers acting for nonprofit:

  • Robocalls require prior express consent (oral or written) and no consent for residential landline.
  • Exempt from DNC restrictions but must comply with entity-specific DNC requirements under TSR.
  • Must ID organization and telephone # at start of call.
  • Consent cannot be transferred.

Mixed commercial calls (i.e. gives gifts for contributions):

  • Robocalls require prior express written consent
  • Exempt from DNC restrictions.
  • Must ID organization and telephone # at start of call.
  • Consent cannot be transferred.

2. The Question of Technology: Are You Really Robocalling?

Today’s world is exploding with new devices for communication and apps that can be used on new communications devices. Creative marketers collaborate with techno-geeks to devise innovative ways to reach out to mass markets via texts, emails, and calls. Whether the equipment involved constitutes an “autodialer” can be a difficult question to answer under the ruling, which defines “autodialer” quite broadly. According to the FCC, an autodialer is equipment that has the capacity to store or produce and dial random or sequential numbers even if it is not used for that purpose at the time of calling. “Capacity” is not limited to the current configuration of the device but includes “potential” functionalities.

Thus, under the Commission’s ruling, any phone that has the capacity to store and dial numbers from a list is apparently an “autodialer,” and any phone that could hypothetically be altered to do so has the requisite capacity. That test likely subjects every uninvited call or text to a wireless number from almost any modern phone – including smartphones – to the TCPA. Because nonprofit calling would most likely be based upon a prepared list (i.e., donors), then equipment capable of calling the list could be an autodialer. This includes equipment use to originate internet-to-phone text messages to wireless numbers via email or via a wireless carrier’s web portal. Moreover, an entity wanting to use some form of autodialer cannot escape liability by separating the ownership of the equipment from ownership of the database. Special agreements between an equipment owner and a third-party database provider may subject the equipment owner to the TCPA. Such a “voluntary combination enables the equipment to have the capacity to store or produce telephone numbers.” (See ¶ 24 of the ruling).

The ruling states that predictive dialers clearly are autodialers. These pair hardware with certain software to store numbers and dial those numbers at random in sequential order. Yet on the other hand, the FCC found that smartphones probably would not be autodialers even though they have the capacity to store numbers, but the FCC will continue to monitor their use. The reasoning in the ruling is inconsistent but designed to err on the side of finding that any piece of equipment used for mass connection not initiated by a real human is an autodialer.

3. The Reassigned Number Issue

Many times a number in the nonprofit’s database no longer corresponds to the original called party (i.e., donor) and has been assigned to a new person or to a wireless phone. The TCPA heightens protection for wireless customers because of potential charges they might incur for unsolicited calls. Hence the requirement that robocalls placed by a nonprofit to a wireless number requires prior express consent (oral or written). The FCC said that the TCPA requires consent of the current subscriber and not of the intended recipient of a call (the person your organization has connected to the called number).

Because more and more Americans rely solely on wireless phones, obtaining consent may be harder in a number of scenarios. In the first scenario, the called party has taken, or “ported” his landline number to a wireless carrier, and your organization’s robocaller has no way to know that. As long as the call is placed within 15 days of the porting of the number from landline to wireless service, TCPA liability can be avoided (this exemption applies as long as the number is not on your specific do-not-call list but which would seem to be the case or it would not be called for nonprofit reasons in the first place!) If you somehow have a record of consent from the subscriber when the number was associated with a landline phone “the caller can continue to rely on that consent after the number is ported to wireless.” (See ¶ 54 of the ruling).

However, this exemption does not apply after the 15-day period, and because nonprofit calls to residential landline numbers need no prior consent, the new wireless number may have no associated consent. Somehow the organization will have to figure out if the number has been converted and then obtain consent. Thus, under scenario one, TCPA liability may accrue inadvertently because of the conversion.

The second scenario involves a number that has been reassigned to a wireless number and is not associated with the intended recipient of the call. This happens a lot as individuals frequently change phone numbers. Your organization may have had prior express consent from the prior owner of the wireless number, but that consent does not transfer and you must get the consent of the current owner. As with scenario one, the caller may not know the called party number has become a wireless number.

The ruling provides some relief for inadvertent calls placed to wireless numbers that have been re-assigned. If the caller does not reasonably know of reassignment, the caller can initiate one call to the reassigned number after reassignment (conversion) without TCPA liability. This call is supposed to allow the caller to obtain actual or constructive knowledge of the reassignment and cease calls to the new subscriber without express consent. The ruling presumes that one call should be enough for an organization using a robocaller to determine that the number is a wireless number. It assumes that “there are solutions in the marketplace to better inform callers of reassigned wireless numbers.” (See ¶ 72 of the ruling).

Because this assumption is dubious, the most conservative practice now may be to assume a number is a wireless number and build in to the call a means for the caller to detect the nature of the called number.

The ruling suggests options such as including an opt-out mechanism in all artificial or pre-recorded voice calls so that recipients may easily report a reassigned or wrong number. (See ¶ 86 of the ruling).

While establishing the nature of the call (i.e. wireless) is the first hurdle to jump the next one may be even harder: obtaining consent.

4. The Ruling Makes “Consent” a Moving Target

The ruling creates a conundrum for nonprofits using robocalls. It sternly states, “We reiterate that the TCPA places no affirmative obligation on a called party to opt out of calls to which he or she never consented; the TCPA places responsibility on the caller alone to ensure that he or she has valid consent for each call made using an autodialer, artificial voice, or prerecorded voice.” (See ¶ 81 of the ruling).

While nonprofits can obtain consent either orally or in writing, a record must be kept establishing consent from the subscriber to the called number, rather than the intended recipient of the call. The FCC does not define the procedure for obtaining consent. The ruling complicates matters by failing to define the procedure for revoking consent. Rather, a called party may "revoke consent at any time and through any reasonable means.” (See ¶ 47 of the ruling). Thus “consent” can evaporate through revocation.

This revocation rule could create a record-keeping nightmare, as the numerous challenges to the ruling point out in the pending appeal of the ruling in the United States Court of Appeals for the DC Circuit (#15-211). It will be impossible for callers to process revocations if they can come in any form.

The ruling did clarify some instances where consent can be presumed and some where it cannot. The fact that a consumer’s wireless number is in the contact list on another person’s wireless phone does not establish consent. However, when a caller leaves a voicemail message that generates an automated text message via an app in response consent is established. Consent can always be demonstrated when a person gives his or her wireless number to the person initiating the autodialer or prerecorded call.

Further, consent of a “customary user” of a telephone number may bind the subscriber. The ruling does not define the category of “customary users” which could include, but not be limited to, family members.

Finally, a nonprofit robocall may contain a mixed nonprofit/for-profit message, such as stating that a certain level of contribution will provide an associated “gift.” Such calls will have to abide by the “for-profit” rules which demand prior express written consent.

5. The Consequences of Violating the TCPA

The TCPA is quite strict, with few exemptions. The ruling does exempt certain financial and health care messages due to the nature of the communications sought (i.e., identify theft) with very strict limitations. However, most nonprofit calls using autodialers may not be in the health care or financial industries.

The TCPA allows actual and statutory damages that range from $500 to $1,500 per unsolicited message, plus multi-thousands in penalties from the FCC. Enforcement can be either by private action from an angry subscriber or by the government. In any event, it is easy to see that a mistake – no matter how inadvertent – could be costly to a nonprofit.

In sum, the benefits of using any form of robocalling as a means of mass communication to donors etc. must be weighed against the risks of violating the TCPA. (Remember, it does not cover calls placed manually by staff or volunteers). Each situation is extremely fact-dependent. While this article provides generalized advice on the new ruling, specific legal advice should be sought before embarking on a defined robocalling program.

*The Federal Trade Commission (“FTC”) shares jurisdiction over the issue of unwanted robocalls. See the FTC’s Telemarketing Sales Rule. 16 C.F.R. Part 310. The FCC has jurisdiction over the telephone service providers and the authority to regulate communications by radio, wire, and satellite, while the FTC enforces federal consumer protection laws that protect against fraud and deception found in most illegal robocalls. These agencies can bring enforcement actions and issue monetary penalties which can end up costing companies or individuals millions of dollars.

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