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Recent News Demonstrates Robocalling Is on Regulators' Radar

6 Mar, 2012 By: Jeffrey D. Knowles, Venable LLP’s Advertising, Mikhia E. Hawkins

On Feb. 15, the Federal Communications Commission (FCC) approved significant changes to its rules regarding telemarketing calls. Among the changes was an update of the agency’s rules governing telemarketing “robocalls” – marketing phone calls that make use of an auto-dialer or artificial or prerecorded voice.

Both the FCC and the Federal Trade Commission (FTC) have regulatory enforcement authority over marketing telephone calls made to consumers. The FCC’s changes largely harmonize its telemarketing rules, which are enforced under authority granted by the Telephone Consumer Protection Act (TCPA), with the FTC’s Telemarketing Sales Rule (TSR). The TSR requires, among other things, that marketers secure prior express written consent for all robocalls to wireless numbers and residential landlines, regardless of whether the calls are to consumers with whom the marketer has a business relationship. It also requires that marketers make automated “opt-out” mechanisms available to consumers that enable them to opt out of receiving future prerecorded calls from the marketer.

In addition, the FCC revised its rules to adopt a “per-calling-campaign” standard for measuring the maximum percentage of live telemarketing sales calls that a telemarketer may lawfully drop or abandon because of the use of autodialing software or other equipment. The agency had previously used a 30-day average of all a marketer’s calls to calculate the marketer’s abandon rate.

Demonstrating that the FTC is also paying attention to robocallers’ practices, the agency announced two settlements with marketers of robocalling technology on February 24. The two companies allegedly marketed Web-based self-service robocall platforms to businesses that enabled the services’ users to make prerecorded sales calls by uploading a recorded message and a list of telephone numbers. The Web-based service would then dial each uploaded phone number and play the uploaded prerecorded message.

The FTC alleged that the robocall service companies violated federal telemarketing laws by enabling telemarketing campaigns that unlawfully called numbers on the National Do Not Call Registry, delivered prerecorded calls without complying with federal requirements for such calls, abandoned calls by playing prerecorded messages after call recipients answered the calls, and failed to disclose the caller’s identity during the calls. The companies’ robocall services allegedly used automated dialing equipment to deliver prerecorded messages.

The two settlements with the robocall self-service companies require that the businesses pay $10,000 to the FTC, with suspended civil penalty judgments of $2 million and $1 million, respectively. Additionally, the settlements prohibit the businesses from violating federal telemarketing laws in the future.

The changes to the FCC’s rules, as well as the recent FTC settlements, demonstrate that regulators are paying attention to the robocalling space. For marketers using robocalls, whether for lead generation, upselling existing clients, or any other reason, it is critical that they understand the regulations governing robocall-based marketing and develop best practices to ensure compliance with the state and federal rules regulating telemarketing.

Jeffrey D. Knowles is a partner at Venable LLP and chair of the firm’s Advertising, Marketing and New Media Group. Mikhia E. Hawkins is an attorney at Venable LLP. They can be reached at (202) 344-4000, or at [email protected] and [email protected].

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