Telecommunications and Marketing

Question 1

Define:

regulations under Telephone Consumer Protection Act of 1991 (TCPA)

Answer 1

issued by FCC that place restrictions on unsolicited advertising by telephone or facsimile (robocalls and text messages included)

Question 2

Telemarketing Sales Rule (TSR)

Answer 2

issued by the FCC to implement the Telemarketing and Consumer Fraud and Abuse Prevention Act

Question 3

Define:

telemarketing

under TSR

Answer 3

a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate call

Question 4

What does the TSR require covered organizations to do?

Answer 4

• call only between 8 am - 9 pm
• screen and scrub names against the national Do Not Call list
• display caller ID info
• identify themselves and what they are selling
• disclose all material information and terms and provide accurate and complete info
• comply with special rules for prizes and promotions
• respect requests to call back
• retain records for at least 24 hours
• comply with special rules for automated dialers

Question 5

Who has to comply with the TSR?

Answer 5

telemarketers AND sellers

Question 6

Define:

internal suppression list

under TSR

Answer 6

internal lists of any consumer who has asked not to be called again

Question 7

What must be disclosed?

under TSR

Answer 7

ten broad categories of info must always be disclosed:
1. cost and quantity
2. material restrictions, limitations or conditions
3. performance, efficacy or central characteristics
4. refund, repurchase or cancellation policies
5. material aspects of prize promotions
6. material aspect of investment opportunities
7. affiliations, endorsements or sponsorships
8. credit card loss protection
9. negative option features
10. debt relief services

Question 8

What does the TSR prohibit telemarketers from doing with respect to an outbound telephone call?

Answer 8

abandoning an outbound telephone call with “hang-ups” or “dead air” where abandoned: if a person answers it and telemarketer does not connect the call to a live sales representative within two seconds of the person’s completed greeting

• must be live person (no pre-recorded message)

Question 9

Define:

abandoned call safe harbor

under TSR

Answer 9

telemarketer won’t face enforcement action for violating if telemarketer:
* uses technology that ensures abandonment of no more than 3% of all calls answered by a live person, measured per day per calling campaign
* allows telephone to ring for 15 seconds or four rings before disconnecting an unanswered call
* plays a recorded message stating the name and telephone # of seller on whose behalf the call was placed whenever a live sales rep is unavailable within two seconds of a live person answering the call
* maintains records documenting adherence to these three reqs

Question 10

Define:

unauthorized billing

Answer 10

billing consumers for any goods or services without the consumer’s express, informed consent –> is prohibited by TSR

Question 11

How can a telemarketer obtain express, informed consent or verifiable authorization?

Answer 11

generally, telemarketer must identify account with enough specificity for the consumer to understand which account will be charged and obtain the consumer’s express agreement to be charged using that account number

Question 12

Define:

robocallers and auto-dialers

under TCPA

Answer 12

• robocalls: prerecorded calls
• autodialers: automatic telephone dialing systems (does not include text message campaigns)

Question 13

TCPA rules on robocalls and autodialers

Answer 13

• FCC revised established business relationship exemption for robocalls → still have to get prior express written consent for all robocalls to residential lines even if have established business relationship
• consumers can opt out of future robocalls during a robocall
• robocalls made by health care-related entities governed by HIPAA and exempt from above requirements

Question 14

Define:

robotexts

under TCPA

Answer 14

sending messages without human intervention

Question 15

TCPA and robotexts

Answer 15

• robotexts prohibited absent express consent
• consent can be revoked by consumer at any time by any reasonable means
• mere fact that consumer’s wireless number appears in contact list of another wireless customer not sufficient to establish consent
• when caller has consent for wireless number and number has been reassigned, caller isn’t liable for the first call but will be liable for subsequent calls if new consumer makes caller aware of the change

Question 16

Define:

prior written consent under the TCPA

robocalls and robotexts

Answer 16

prior written consent now means the consent obtained must include a clear and conspicuous disclosure that telemarketing calls or texts can be made with an autodialer or artificial voice AND consent can’t be obtained as requirement of purchase

Question 17

What is the record requirement under the TSR?

Answer 17

sellers and telemarketers must keep substantial records that relate to their telemarketing activities
* must maintain following records for 2 years from date produced: advertising and promotional materials; info about prize recipients; sales records; employee records; all verifiable authorizations or records of express informed consent or express agreement

Question 18

Who can the TSR be enforced by?

Answer 18

enforced by FTC and state AGs

Question 19

What penalties can be brought under TSR?

Answer 19

violations currently punishable by civil penalties of up to $50,120 per call

Question 20

Does the TSR provide a private right of action?

Answer 20

• limited private right of action against telemarketers as an individual that must meet threshold of $50k in actual damages to be able to file suit
• o bring class action, must show actual harm

Question 21

Define:

Do Not Call Registry

Answer 21

program allows U.S. residents to register residential and wireless phone number they do not wish to be called for telemarketing purposes (part of TSR)
* sellers and telemarketers must access the registry prior to making any phone-based solicitations
* must update call lists every 31 days with new registry information
* only sellers, telemarketers and service providers may access the registry

Question 22

Who does the DNC not apply to?

Answer 22

• nonprofits calling on their own behalf
• calls to customers with existing relationship within last 18 months
• inbound calls, provided no “upsell” of additional products or services
• most business-to-business calls

Question 23

Define:

established business relationship exemption

under TSR

Answer 23

sellers/telemarketers may call a consumer with whom a seller has an established business relationship provided the consumer hasn’t asked to be on the seller’s entity-specific DNC list

• EBR exists with a customer if customer has purchased, rented or leased the seller’s goods or services (or completed a financial transaction with seller) within 18 months preceding a telemarketing call
• EBR exists with a prospect if the consumer has made an application or inquiry regarding the seller’s goods and services within 3 months preceding a call

Question 24

How can a seller/telemarketer get a customer’s consent to make calls?

under TSR

Answer 24

• consent must be in writing, state the numbers to which the call may be made, and include consumer’s signature
• request for consent must be clear and conspicuous
• must be opt-in

Question 25

DNC Safe harbor

under TSR

Answer 25

seller/telemarketer won’t be held liable for erroneously calling a consumer who has asked not to be called or is on the National DNC Registry if seller/telemarketer can establish that as part of its routine business practice, it meets the following requirements:
* has established and written procedures to honor consumers’ requests that they not be called
* has trained its personnel in these procedures
* has maintain and recorded and entity-specific DNC list
* uses and maintains records documenting, a process to prevent calls to any telephone # on an entity-specific DNC list or National DNC Registry
* monitors and enforces compliance with entity’s written DNC procedure

Question 26

fax marketing under TCPA

Answer 26

• TCPA also prohibits unsolicited commercial fax transmissions
• consent can be explicit or inferred from an EBR

Question 27

Junk Fax Prevention Act (JFPA)

Answer 27

• 2005 amendment to TCPA
• specifically provides that consent can be inferred from an EBR and permits sending commercial faxes to recipients based on an EBR as long as the sender offers an opt-out in accordance with the act

Question 28

penalties under Junk Fax Prevention Act

Answer 28

private right of action and statutory damages of up to $500 per fax

Question 29

Define:

Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003

Answer 29

covers transmission of commercial email messages with a primary purpose of advertising or promoting a product or service

Question 30

Who does CAN-SPAM apply to?

Answer 30

any entity that advertises products or services by e-mail directed to or originating from US

Question 31

Who is CAN-SPAM enforced by?

Answer 31

• enforced primarily by FTC and carries fines of up to $50,120/violation
• state AGs, other federal regulators and other state officials can also enforce
• ISPs adversely affected by violation may sue violators for injunctive relief and monetary damages
• no right of action for other parties

Question 32

Who has rule-making authority under CAN-SPAM?

Answer 32

FTC

Question 33

What does CAN-SPAM generally require of commercial emails?

Answer 33

• prohibits false or misleading headers
• prohibits deceptive subject lines
• requires commercial emails to contain a functioning, clearly and conspicuously displayed return email address that allows the recipient to contact the sender
• requires all commercial emails to include clear and conspicuous notice of the opportunity to opt out along with a cost-free mechanism for exercising the opt-out
• prohibits sending commercial email (following grace period of 10 business days) to an individual who has asked not to receive future email
• requires all commercial email to include (1) clear and conspicuous identification that the message is a commercial message (unless the recipient has provided prior affirmative consent to receive the email) and (2) a valid physical postal address of the sender
• prohibits aggravated violations relating to commercial emails
• requires all commercial email containing sexually oriented material to include a warning label

Question 34

Define:

transaction or relationship message

under CAN-SPAM

Answer 34

message with a primary purpose to:
* facilitate or to confirm an agreed-upon commercial transaction
* provide warranty or safety information about a product purchased or used by the recipient
* provide certain information regarding ongoing commercial relationship
* provide information related to employment or a related benefit plan
* deliver goods or services to which the recipient is entitled under the terms of an agreed-upon transaction

(is NOT commercial email message)

Question 35

Define:

sender

under CAN-SPAM

Answer 35

anyone who initiates an email message and whose product or service is advertised or promoted by the message

Question 36

Does CAN-SPAM preempt state laws?

Answer 36

CAN-SPAM preempts most state laws that restrict email communications

Question 37

Define:

mobile service commercial message (MSCM)

under CAN-SPAM

Answer 37

commercial electronic mail message that is transmitted directly to a wireless device that is utilized by a subscriber of a commercial mobile service
* must use a unique electronic address that includes a reference to internet domain
* covers messages sent using SMS technology but not phone-to-phone messages

Question 38

How does CAN-SPAM regulate MSCMs?

Answer 38

CAN-SPAM Act prohibits senders from sending any MSCMs without the subscriber’s express prior authorization

Question 39

What must an authorization contain?

CAN-SPAM MSCMs

Answer 39

each authorization must include certain req’d disclosures stating that:
* subscriber is agreeing to receive MSCMs sent to their wireless device from a particular (identified) sender
* subscriber may be charged by their wireless provider in connection with receipt of such messages
* subscriber may revoke authorization at any time

authorization must be specific to sender and must clearly identify the entity that is being authorized to send the MSCMs

Question 40

How can a consumer revoke authorization or opt-out?

CAN-SPAM MSCMs

Answer 40

• senders must enable consumers to revoke authorizations using same means they used to grant
• MSCMs must include functioning return email addresses or other internet-based mechanism that is clearly and conspicuously displayed for purpose of receiving opt-out requests

Question 41

Define:

wireless domain registry

Answer 41

FCC has created a registry of wireless domain names to help senders of commercial messages determine whether those messages might be MSCMs (rather than regular commercial email)

Question 42

Define:

Telecommunications Act of 1996

Answer 42

Section 222 of the act governs the privacy of customer information provided to and obtained by telecommunications carriers