Read details and analysis from Bridgeforce Law on recent FCC rulings affecting
financial institutions and their communications programs.
At its June Open Commission Meeting on June 18, 2015, the Federal Communications
Commission (FCC) voted to approve rulings put forward by FCC Chairman
Tom Wheeler aimed at strengthening the ability of consumers to prevent
unwanted auto-dialed calls and text messages sent to wireless phones;
i.e. “robocalls” and “robotexts.” This action interpreting
the Telephone Consumer Protection Act (TCPA) followed close on the heels
of the FCC’s June 11
th issuance of a letter from its Chief of Enforcement to the General Counsel
of PayPal, which received attention in the national media, regarding the
legality of pending amendments to the PayPal User Agreement.
The latter, which were to go into effect on July 1, 2015, would increase
PayPal’s ability to send auto-dialed and text messages to its customers
by requiring customers to accept such contact as a condition of using
PayPal. Together, these two actions signal a tougher enforcement stance
toward the commercial use of wireless communication.
The FCC’s June 18, 2015 press release summarized the new rulings,
which are effective immediately, as follows:
- Service providers [i.e. telecommunication carriers] can offer robocall-blocking
technologies to consumers and implement market-based solutions that consumers
can use to stop unwanted robocalls.
- Consumers have the right to revoke their consent to receive robocalls and
robotexts in any reasonable way at any time.
- If a phone number has been reassigned, companies must stop calling the
number after one call.
- A consumer whose name is in the contact list of an acquaintance’s
phone does not consent to receive robocalls from third-party applications
downloaded by the acquaintance.
- “Autodialer” is defined in the [TCPA] as any technology with
the capacity to dial random or sequential numbers. This definition ensures
that robocallers cannot skirt consumer consent requirements through changes
in calling technology design or by calling from a list of numbers.
- Consumers are entitled to the same consent-based protections for texts
as they are for voice calls to wireless numbers.
- Equipment used to send Internet-to-phone text messages are autodialer,
so the caller must have consumer consent before calling.
Very Limited and Specific Exemptions for Urgent Circumstances–Free
calls or texts to alert consumers to possible fraud on their bank accounts
or remind them of important medication refills, among other financial
alerts or healthcare messages, are allowed without prior consent, but
other types of financial or healthcare calls, such as marketing or debt
collection calls, are not allowed under these limited and very specific
exemptions. Also, consumers have the right to opt out from these permitted
calls and texts at any time.
The relevance of these rulings was highlighted in a fact sheet the FCC
posted on its website on May 27, 2015, regarding what were then proposed changes.
According to this document, a record 44% of American households relied
exclusively on wireless devices for their phone service in 2014. Briefly,
for most Americans, using a wireless device is a staple of everyday living.
In addition, the broad scope of the ruling is evidenced by the clarification
that any device with even the
potential capability (
i.e. capacity) to dial numbers randomly or sequentially is an auto-dialer,
including calls made from a list of phone numbers loaded to the device.
The FCC’s June 11
th letter to PayPal, a copy of which was published online by the
Washington Post, noted that whenever “a consumer is [asked] to consent to receive
autodialed or prerecorded telemarketing or advertising calls as a condition
of purchasing any property, good, or service…the company must give
consumer’s notice of their right to refuse such consent.”
The letter then recited the applicable regulatory requirements for obtaining
the necessary express, prior written consent from a consumer authorizing
- The agreement must be in writing;
- The agreement must bear the signature of the person who will receive the
- The language of the agreement must clearly authorize the seller (e.g.,
PayPal) to deliver or cause to be delivered ads or telemarketing messages
via autodialed calls or robocalls/robotexts;
- The written agreement must include the telephone number to which the person
signing authorizes advertisements or telemarketing messages to be delivered;
- The written agreement must include a clear and conspicuous disclosure informing
the person signing that:
- By executing the agreement, the person signing authorizes the seller to
deliver or cause to be delivered ads or telemarketing messages via autodialed
calls or robocalls/robotexts; and
The person signing the agreement is not required to sign the agreement
(directly or indirectly), or agree to enter into such an agreement as
a condition of purchasing any property, goods, or services.
According to the FCC letter, PayPal’s planned amended User Agreement
failed to comply with the above requirements and if implemented, would
constitute a violation of the TCPA that “could subject PayPal, its
affiliates, and its service providers to penalties of up to $16,000 per
call or text message.”
In this regard, the letter noted that:
A blanket User Agreement that purports to apply to ‘any telephone
number that [consumers] have provided us or that we have otherwise obtained’
does not meet the level of specificity required by law. Many consumers
have more than one telephone line. Consumers have the right to choose
on which line(s) they wish to receive telemarketing or advertising calls,
if they elect to receive such calls at all.
As noted above, the FCC’s recent actions send a clear warning to
all firms regarding the need for increased vigilance in complying with
the TCPA as general matter. Moreover, the new rulings are effective immediately.
Thus, any institutions that have not already done so should commence a
comprehensive review of their existing business practices related to the
use of auto-dialed calls and text messages without delay.
Id. at p.2, citing 47 C.F.R. § 64.1200(f)(8).