How to Minimize Exposure to Risk & Lawsuits

There are a quite a few ways to run afoul of the TCPA, resulting in compliance violations. The biggest risk that companies face today is inadvertently contacting a professional plaintiff or serial litigator who files a class action lawsuit. In this eGuide, you'll discover how to protect your business against penalties, fines and litigation.

Within this mobile-friendly guide, you'll discover:

  • The 7 main provisions of the TCPA
  • What impact the TCPA can have on your business
  • The 2 types of consent recognized under the TCPA
  • How to handle wireless, VoIP & reassigned numbers

Experience this guide now.


TCPA Compliance Guide

The year was 1991. Cellphones were still rare, a novelty to most people. The most pressing telecommunications issue for many average Americans was getting interrupted at dinner by annoying telemarketing calls, or watching their office fax machine spit out pages and pages of unsolicited advertisements. Something had to be done, and that something was the Telephone Consumer Protection Act (TCPA).

The TCPA statute was created to address a growing volume of nuisance phone calls received by consumers. The statute restricts the use of automatic dialing technology and pre-recorded voice messages from telemarketers, debt collectors, and many other industries. The restrictions cover both calls and texts, and both cell phones and landlines. Even certain business-to-business calls are restricted, such as calls to business cell phones.  The TCPA also restricts unsolicited faxes.
The TCPA is interpreted and enforced by the Federal Communications Commission (FCC). More importantly though, the TCPA contains a private right of action, opening the door for consumers to bring individual or class action lawsuits for both DNC and auto dialer violations.



Main Provisions of the TCPA

Essentially, the TCPA pertains to DNC lists (suppressing numbers on the Federal, state, and internal databases), robocalling, and/or the use of automatic dialers (which can incur charges for the recipient).

Call Time Restrictions

To prevent unwanted phone calls from disturbing people’s sleep, companies are only allowed to contact residential customers between 8:00 AM and 9:00 PM in the customer’s local time zone.

Automatic Telephone Dialing System (ATDS)

The TCPA restricts autodialed marketing calls and text messages to cellphones and other devices (arguably including VoIP phones), where the recipient might be charged for the call. Companies must obtain written consent to place autodialed marketing calls to these lines (or at least “express” consent for non-marketing calls.


Artificial and prerecorded voice calls cannot be made to residential landlines or wireless numbers for marketing purposes, unless prior express written consent has been obtained.  Non-marketing recorded calls are allowed to land lines, but note that many states have stricter rules.

Identification Requirements

Callers must identify themselves to recipients. Among other information, the TCPA requires callers to provide their name, the name of the company they are calling on behalf of, and a telephone number or address which can be used to contact them.

National DNC List

Companies making marketing calls or sending texts to consumers are required to suppress phone numbers on the National DNC Registry. Keep in mind that some states have their own local DNC lists as well, separate from the Federal database.

Internal DNC List (Opt Outs)

Companies are required to maintain an internal DNC list of consumers who asked not to be called or texted, and honor those requests.  Marketers must immediately honor, and consumer’s revocations or prior consent given.

Private Right of Action

This provision allows individuals, not just companies or governmental organizations, to bring TCPA lawsuits directly against the violators and obtain $500-$1,500 per violation.

As you can see, there are quite a few ways to run afoul of the TCPA. In our opinion, the biggest recent TCPA risk companies face is inadvertently contacting a professional/serial TCPA litigator, who files a class action.


The Impact of TCPA on Business

On average, the FTC receives a quarter of a million complaints about possible TCPA violations each month. Between 2010 and 2017 the number of TCPA lawsuits increased 1,251 percent—from 351 cases in 2011 to 4,392 in 2017.

There are three avenues for businesses to be impacted by litigation premised on TCPA violations.

First, we have litigants who are simply trolling for any kind of TCPA violation and threatening to put forth a claim. Legally speaking, this might not be blackmail, but it sure looks like it. These litigants will approach the company before they file any suit and try to convince them to settle out of court prior to any formal hearings. Their goal isn’t to go to court, but to get the company to pay them to go away. These litigants usually target small businesses, mom-and-pop stores that don’t have deep pockets or expert legal teams.

Next are the individuals who actually file lawsuits. Mid-size to enterprise-level companies are the usual targets. These litigants aren’t going for a quick payoff, they’re trying to win formal awards of compensatory fines for TCPA violations. These claims can take up considerable time and resources from companies and their legal departments.

Lastly, the biggest danger of violating TCPA regulations is the class action lawsuit. This is the worst possible outcome, with potentially hundreds of millions of dollars at stake. The big law firms that launch these cases are going after damages for every customer that might have been affected by your TCPA violations, but those customers often only get a small portion of the payout—much of it goes to the lawyers. Class action lawsuits often target enterprise-level companies that have big cash reserves but have been filed against many small and mid-size companies as well recently.


Damages Under the TCPA

Statutory penalties for TCPA violations can range from $500 per call (or actual damages, whichever is greater) and trebled up to $1,500 per call for willful or knowing violations. There is no cap on statutory damages, so there is great potential for devastating penalties resulting from class action lawsuits.

Multi-million dollar settlements are not uncommon. The most famous TCPA settlement occurred in August 2014, when Capital One agreed to pay $75.5 million to end a class action suit that arose from their use of an auto dialer to call customers’ cell phones. As costly as that was, it’s only the third-biggest TCPA settlement in history. Here are some others:

  • Dish Network: $280 million in June 2017
  • Caribbean Cruise Line: $76 million in September 2016
  • US Coachways: $50 million in March 2018
  • Wells Fargo: $30.4 million in February 2017

If those numbers aren’t enough to scare you, there are a few more reasons why you should care about the impact of TCPA violations on your business. Defending against claims, even invalid ones, will cost you substantial legal fees. Any time you spend dealing with TCPA issues is distracting you from your core competency and using up internal resources. Worst of all, TCPA suits can bring unwanted negative publicity that damages your brand and harms your business relationship with customers.


How to Minimize TCPA Exposure

The first and best way to avoid fines, lawsuits, and other TCPA-related hazards is to understand and comply with all TCPA provisions.

You’ll want to identify and avoid the litigators and professional plaintiffs that may already be lurking in your customer databases. Compile lists of phone numbers belonging to litigators and plaintiff’s attorneys who have filed TCPA complaints in the past, and scrub against it on a regular basis—new cases are filed every day.

Don’t forget to check for reassigned numbers, too. When a phone number is reassigned from one person to another, any consent you’ve obtained for calling or texting that number becomes invalid. Identifying reassigned numbers in your database is critical for TCPA compliance.

Identifying wireless and VoIP numbers is also important. Obtaining the prior consent you’re required to have starts with knowing which numbers you need it for, and which you don’t.

Finally, make sure that the language on consent forms is clear and that you have it well-documented. You should include a robust, legally-vetted arbitration clause stating that customers agree to go into arbitration and are not allowed to enter into a class action lawsuit if any dispute arises about the services provided under your terms and conditions. These clauses can and do successfully stop class action lawsuits. Every direct marketer should take this extremely important step.


Wireless and VoIP Numbers

According to several court decisions, the TCPA treats certain VoIP numbers the same as wireless numbers, even though it’s less common for VoIP numbers to carry pay-per-minute charges. The same restrictions and consent requirements arguably therefore apply.

In the early days of cell phones, users were charged in a pay-per-minute structure, even for received calls. As soon as you made that wireless connection, the meter started ticking, no matter who was on the other end or why they were calling.

Nowadays we have unlimited calling and texting plans, but the TCPA legislation still protects wireless numbers from autodialed calls and texts. To use an ATDS to call these numbers, you must have obtained express written consent to do so, and then you can only make those calls for agreed-upon reasons.

There used to be prefixes that would signify wireless numbers, making it easy to distinguish cell phones from landlines, but numbers are transferred so frequently today that identifying wireless numbers is much more complicated.

According to several court decisions, the TCPA treats certain VoIP numbers the same as wireless numbers, even though it’s less common for VoIP numbers to carry pay-per-minute charges. The same restrictions and consent requirements arguably therefore apply. Many households and businesses have VoIP numbers these days; they often come included with cable and wireless internet packages. Direct marketers must be vigilant about identifying VoIP numbers and scrubbing their call lists to remove them.

TCPA has different thresholds based on the type of consent that you have. If the content is informational calls (including emergency notifications), you do not necessarily need consent, but you must honor opt-outs.

These are the two types of consent recognized under the TCPA:

  • Prior Express Consent, which is not specifically defined in the statute, but should consist of an agreement (written or oral) clearly indicating consent to receive calls at a particular number. For non-marketing calls, if a customer knowingly provides a phone number to a company without conditions in the normal course of doing business, the express consent is implied—so long as the content closely relates to the purpose for which the number was originally provided.

  • Prior Express Written Consent, which the FCC defines as a written agreement between the caller and the recipient of the call that clearly authorizes the caller to deliver “advertisements or telemarketing messages using an automatic telephone dialing system or an artificial pre-recorded voice.” This type of consent must specify the phone number to be called and must also include the recipient’s written or electronic signature. The caller must also disclose that consent is not a condition of purchase.

Prior express written consent is required any time you use a prerecorded voice to call a landline or wireless number. It is also required when using an automatic dialer to call a wireless number, except in certain circumstances: a debt collection call to a wireless number only requires express consent, and informational calls like a package delivery alert or public utility notices also only require express consent.

Calls to landlines still require scrubbing against the DNC list; express written consent is required to call a number on the National DNC Registry for marketing, unless you have an established business relationship (EBR).

How to Avoid Wireless/VoIP Violations

Difficult though it can be, the key to staying compliant with these regulations is to accurately identify wireless and VoIP numbers before loading them into an automatic dialer or doing any other kind of calling or messaging.

You have to know the level of consent you’re required to have for the numbers on your list and the types of communications you want to have with them.

You also have to know if the number has been transferred and handle it appropriately if so. There may also be cost considerations around automatically loading lists into dialers as opposed to doing so manually.


Reassigned Numbers

Always remember that in some respects, consent attaches to individuals, not numbers. In other words, if you have consent to call a particular number, that consent becomes invalid if that number is ever transferred to a different individual.

Until the D.C. Circuit Court struck down an important FCC order, you were allowed one erroneous call to a reassigned number. Now, however, with that interpretation invalidated, plaintiffs have resumed suing companies over even one reassigned call.  Therefore, companies need to scrub against a list of reassigned numbers.

How to Avoid Reassigned Number Violations

To minimize exposure to a TCPA violation or lawsuit, you must understand if and when numbers are reassigned, and use the right products or data sets to scrub your list against those numbers.

The good news is, a new FCC Reassigned Number Database is expected to be made available soon. Currently, there is no authoritative source for reassigned or transferred numbers, but if you can show a thorough, good faith effort to obtain consent and scrub for prohibited numbers, you may have safe harbor under the TCPA.

The Right Experts With The Right System

If you’re worried that professional TCPA litigators might be hiding out in your customer database, or if you’re having trouble keeping up with all of the relevant provisions required to cleans a particular list, there’s a good chance you’d be well-served by an expert solution. The right specialists, utilizing solutions flexible enough to fit seamlessly with your existing internal processes, can transform your business and eliminate the distractions that can result in costly violations or lawsuits, thus freeing you to focus on the things your business does best.

At Contact Center Compliance, we deploy an advanced do not call scrubbing tool called DNC Scrub® that includes Litigator Scrub®, an award-winning, cloud-based defense against serial TCPA litigators and professional plaintiffs. This solution encompasses all of the legislative compliance requirements we discussed above, helping our clients eliminate exposure to both TCPA and DNC risk.

Our DNC Scrub® solution includes the right ecosystem and IT resources to fully manage your Federal, state, and Internal DNC scrubs and all TCPA provision requirements in a single job. We offer simple, flexible processes that allow our customers to come to our website and manually upload a list of phone numbers, schedule nightly SFTP jobs, or set up real-time API connectivity. Additionally, you can get real-time updates and increased efficiency from our enterprise-level integrations with platforms you’re already using.

With over 70 billion scrubs performed (and counting) and 0 violations, fines or lawsuits incurred by our clients, you can market with confidence.

If you'd like to learn more about how we can help your business minimize exposure to DNC and TCPA compliance risk and threats, request a consultation with one of our experts today.

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