Appeals of the FCC Declaratory Ruling and Order to be Heard in the D.C. Circuit
On July 10, 2015, the Federal Communications Commission’s (“FCC” or the “Commission”) released its omnibus Declaratory Ruling and Order (“TCPA Declaratory Ruling and Order” or “Ruling”). ACA International, Inc. announced an appeal the same day, and two other parties filed petitions shortly thereafter. Following procedures for handling multi-jurisdiction litigation, the appeals were consolidated in the D.C. Circuit for review. The lead case is ACA International v. FCC, D.C. Cir. No. 15-1211. Other petitions consolidated in the appeal have been filed by: Professional Association for Consumer Engagement (PACE), Sirius XM Radio, Inc., Salesforce.com Inc., Exact Target, Inc., Consumer Bankers Association, Rite Aid and Vibes Media, LLC. Intervenors include Council of American Survey Research Organizations (CASRO), Marketing Research Association (MRA), MRS BPO LLC, Cavalry Portfolio Services, LLC, Diversified Consultants and Mercantile Adjustment Bureau, LLC.
Petitioners are challenging the FCC’s rulings on the definition of “autodialer,” liability for calls to reassigned telephone numbers, and the ability of consumers to revoke consent by any reasonable means. (American Bankers Association has filed a petition for reconsideration or modification of the same order, but addressing the new exemptions established for financial or healthcare messages.)
FCC Bureau Grants 117 Retroactive Waivers of Fax Opt-Out Rules
On August 28, 2015, the Consumer & Governmental Affairs Bureau released an Order granting 117 petitions for a retroactive waiver of the FCC’s rules governing opt-out notices to be provided on facsimile transmissions sent with the recipient’s consent. Petitioners sought a retroactive waiver of the FCC’s rules requiring faxes contain specified information informing the recipient how to “opt-out” of receiving future faxes. Petitioners contended that the FCC’s requirement was unclear and that it was not intended to apply to faxes sent with the recipient’s express permission.
Consistent with the Commission’s October 2014 decision in Anda, the Bureau granted a retroactive waiver of the fax rules, for all “solicited” faxes sent through April 30, 2015. In Anda, the FCC granted a retroactive waiver to the petitioners and other similarly situated parties because the scope of the opt-out requirement was previously unclear. The Bureau order grants all “me-too” waiver petitions filed through June 23, 2015.
FCC Clarifies Applicability of its Fax Rules to E-Faxes and Job-Seeking Services
In separate orders released on August 28, 2015, the Consumer & Governmental Affairs Bureau of the Federal Communications Commission issued two rulings affecting the scope of the FCC’s rules regarding unsolicited faxes. In the first order, the Bureau declared that “efaxes” are subject to the TCPA’s rules. The case involved a service in which a facsimile message is originated on telephone lines, reaches a fax server at the recipient’s destination, and is converted by the recipient’s server to an email for delivery to the recipient. Under this scenario, the Bureau ruled, the fax is subject to the TCPA because the particular efaxes described in the petition “are sent as faxes over telephone lines” and the equipment used on the receiving end qualifies as a “telephone facsimile machine” under the TCPA. The Bureau contrasted the decision with a 2003 decision involving computers with attached fax servers or modems (in which the FCC concluded that the TCPA rules do not apply), because the latter service involves faxes which are “sent as an email over the Internet” rather than sent as faxes over telephone lines. Westfax, Inc. Petition for Consideration and Clarification, Declaratory Ruling, DA 15-977 (rel. Aug. 28, 2015).
In the second order, the Bureau clarified that faxes promoting a business’ job placement services are “advertisements” within the meaning of the TCPA. In that proceeding, an employer had posted a request seeking job candidates. iHire, which describes itself as an “employment service,” faxed six “summary resumes” to the employer in response to the listing. In response to iHire’s petition for clarification, the Bureau concluded that iHire’s faxes were unsolicited advertisements because its submissions “amount to a ‘teaser’” to induce the employer to subscribe to iHire’s employment services for companies. The Bureau disagreed with iHire’s assertions that the faxes were purely informational, concluding that the faxes amounted to advertisements by considering, among other things, the “amount of space” devoted to iHire’s for-fee services, and concluded that the faxes were unsolicited, despite the job posting, because iHire was not itself a job candidate.
FTC and FCC Closes Investigation Involving Proposed Changes to PayPal’s Terms
Earlier this year, PayPal announced planned changes to its User Agreement that would have, among other things, given the company broad rights to contact people by phone or text messages. The provision stated, in part:
You consent to receive autodialed or prerecorded calls and text messages from PayPal at any telephone number that you have provided us or that we have otherwise obtained. We may place such calls or texts to (i) notify you regarding your account; (ii) troubleshoot problems with your account; (iii) resolve a dispute; (iv) collect a debt; (v) poll your opinions through surveys or questionnaires, (vi) contact you with offers and promotions . . . .
The provision was set to go into effect on July 1, 2015, and the only option to avoid being contacted in this manner was to stop using the service. FTC staff contacted PayPal to remind them of their obligations under the Telemarketing Sales Rule and the Do Not Call Registry, and concerns over non-compliance.
Although the TSR permits telemarketing calls to numbers on the Registry if a consumer has provided express written consent to receive such calls, the FTC staff stated that the proposed language did not meet the requirements for the exception. The staff noted, for example, that the request seeking consent must be “clear and conspicuous” and cannot be “buried” in a lengthy user agreement. The staff further added that calls may only be placed to a number specified by a consumer – not to any number “otherwise obtained.” The FCC raised similar concerns with PayPal's proposed changes.
On June 29, 2015, PayPal revised the proposed language such that the company only reserved rights to place calls or texts to “(i) provide notices regarding your Account or Account Activity, (ii) investigate or prevent fraud, or (iii) collect a debt owed to us.” Based on these changes – and because the company hadn’t yet made any telemarketing calls under the proposed language – the FTC staff and the FCC decided not to recommend enforcement action.