US Private Sector Privacy Telecommp1 PDF

MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP CHAPTER 11 Telecommunications and Marketing Telecommunications and marketing involve very important privacy issues. One set of privacy telecommunications issues concerns specific communications channels and methods...

MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP CHAPTER 11 Telecommunications and Marketing Telecommunications and marketing involve very important privacy issues. One set of privacy telecommunications issues concerns specific communications channels and methods such as telemarketing, texts and electronic mail. For these channels, U.S. law has specific rules that regulate how organizations can communicate with individuals for direct marketing and related purposes. Another set of marketing issues concerns the rules that apply to personal information collected by the companies themselves in the course of providing their services. Along with websites themselves, companies in sectors such as telephone, cable, internet service, and social media can potentially learn a great deal about individuals by the phone calls they make, the television shows they watch, and the internet sites they visit. This chapter examines the statutes that govern the commercial use of that type of telephone, cable and internet activity. 1 The chapter ends by examining the ethics of digital advertising. 11.1 Regulations Governing Telemarketing U.S. federal and state laws place legal limits on the manner in which organizations can call individuals for marketing and fund-raising purposes. Legislators and regulators have issued restrictions in response to complaints by families about deceptive marketing practices as well as unwanted marketing calls. In examining the legal and theoretical underpinnings of these government actions, it is insightful to compare one traditional privacy tort action known as “intrusion on seclusion” to telemarking regulations. The tort of “intrusion on seclusion” imposes liability on “one who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns.” 2 To succeed in an intrusion tort claim, the plaintiff must show that “the intrusion would be highly offensive to a reasonable person.” 3 In contrast with intrusion tort requirements, telemarketing regulations in the United States address milder intrusions, which do not require a showing of “highly offensive” intrusion. Telemarketing laws in the United States provide considerable detail about what types of “intrusions” are permitted under federal law. The Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) have coordinated closely in their requirements. The FCC issued regulations under the Telephone Consumer Protection Act of 1991 (TCPA) that place restrictions on unsolicited advertising by telephone and facsimile and updated them in 2012 to address robocalls. 4 The FCC has determined that these prohibitions encompass text messages. 5 The FTC first issued its Telemarketing Sales Rule (TSR) in 1995, implementing the Telemarketing and Consumer Fraud and Abuse Prevention Act. It has since amended the TSR in 2003, 2008, 2010 and 2015. 6 The TSR defines telemarketing as “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 telephone call.” 7 1 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP The focus of this discussion will be on the FTC rule. This chapter first examines the rules governing how telemarketing calls can be made and then turns to who can receive such calls consistent with the Do Not Call (DNC) list. 11.1.1 Rules Governing How Calls Can Be Made Under Telemarketing Laws The TSR provides detailed rules about many aspects of how telemarketing calls can be made. The vast majority of telemarketing calls are from legitimate businesses trying to achieve their business goals while satisfying consumers. The telemarketing field, however, has also been plagued with a history of intrusive and fraudulent callers. Such callers sometimes intrude repeatedly on consumers, making frequent calls at inappropriate hours and in other ways that bother consumers. Such callers also sometimes take advantage of their anonymity and physical distance from consumers to try to defraud consumers. This combination of intrusiveness and fraud has led to periodic TSR updates to address new forms of problems for consumers. The TSR requires covered organizations to: Call only between 8 a.m. and 9 p.m. Screen and scrub names against the national Do Not Call list Display caller ID information Identify themselves and what they are selling Disclose all material information and terms 8 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 Under the rules, telemarketing is defined as “a plan, program, or campaign... to induce the purchase of goods or services or a charitable contribution” involving more than one interstate telephone call. 9 With some exceptions, all businesses or individuals that engage in telemarketing must comply with the TSR (or the FCC counterpart) as well as applicable state laws. 10 Neither the TSR nor the FCC rules preempt state law. As the FTC notes, compliance is required both of “telemarketers,” entities that initiate or receive telephone calls to or from consumers, and “sellers,” the entities that provide or arrange to provide the goods and services being offered. 11.1.1.1 Entity-Specific Suppression Lists The TSR prohibits any seller (or telemarketer calling on the seller’s behalf) from calling any consumer who has asked not to be called again. Sellers and telemarketers are required to maintain internal suppression lists to respect these DNC requests. 11 11.1.1.2 Required Disclosures The TSR requires that, at the beginning of the call, before delivering any sales content, telemarketers disclose: The identity of the seller 2 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP That the purpose of the call is to sell goods or services The nature of those goods or services In the case of a prize promotion, that no purchase or payment is necessary to participate or win, and that a purchase or payment does not increase the chances of winning The FTC has issued guidance on how and when these four basic disclosures must be made. For example, disclosures must be truthful. A company cannot say it is making a “courtesy call” to the consumer if the purpose of the call is telemarketing. If a call has multiple purposes (such as the sale of different types of products or different overall purposes), disclosures have to be made for all sales purposes. The following examples are from the FTC’s “Complying with the Telemarketing Sales Rule” guide: 12 A seller calls a consumer to determine whether he or she is satisfied with a previous purchase and then plans to move into a sales presentation if the consumer is satisfied. Since the seller plans to make a sales presentation in at least some of the calls (the seller plans to end the call if the consumer is not satisfied), the four sales disclosures...must be made promptly during the initial portion of the call and before inquiring about customer satisfaction. However, a seller may make calls to welcome new customers and ask whether they are satisfied with goods or services they recently purchased. If the seller doesn’t plan to sell anything to these customers during any of these calls, the four oral sales disclosures are not required. That’s the case even if customers ask about the sellers’ other goods or services, and the seller responds by describing the goods or services. Because the seller has no plans to sell goods or services during these calls, the disclosures are not required. 11.1.1.3 Misrepresentations and Material Omissions The TSR prohibits misrepresentations during the sales call. Telemarketers must provide accurate and complete information about the products and services being offered. They may not omit any material facts about the products or services. There are ten broad categories of information that 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 3 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP The rule was also amended to require specific disclosures when a telemarketer accepts payment by means other than a credit card or debit card, such as with phone or utility billing. In this case, the seller must obtain “express verifiable authorization.” In amending the rule, the commission noted that many new payment methods lacked basic consumer protection provisions that exist in credit card transactions. Because the consumers may not have protections against, for example, unauthorized charges, or recourse in the event they are dissatisfied with the goods or services, the TSR now requires telemarketers to meet a higher standard for proving authorization when consumers use new payment methods. 11.1.1.4 Transmission of Caller ID Information The TSR requires entities that make telemarketing calls to transmit accurate call identification information so that it can be presented to consumers with caller ID services. In particular, each telemarketer may transmit its own name and phone number, or it may substitute the name of the seller on whose behalf the telemarketer is making the call. The telemarketer may also substitute the seller’s customer-service telephone number for its number, provided that the seller’s number is answered during normal business hours. Telemarketers are not liable if, for some reason, caller ID information does not reach a consumer, provided that the telemarketer has arranged with its carrier to transmit this information in every call. The FTC guidance states that “telemarketers who can show that they took all available steps to ensure transmission of Caller ID information in every call will not be liable for isolated inadvertent instances when the Caller ID information fails to make it to the consumer’s receiver. Nevertheless, a telemarketer’s use of calling equipment that is not capable of transmitting Caller ID information is no excuse for failure to transmit the required information.” 13 11.1.1.5 Prohibition on Call Abandonment The TSR expressly prohibits telemarketers from abandoning an outbound telephone call with either “hang-ups” or “dead air.” Under the TSR, an outbound telephone call is “abandoned” if a person answers it and the telemarketer does not connect the call to a live sales representative within two seconds of the person’s completed greeting. Abandoned calls often result from a telemarketer’s use of predictive dialers to call consumers. Predictive dialers promote telemarketers’ efficiency by simultaneously calling multiple consumers for every available sales representative. This maximizes the amount of time telemarketing sales representatives spend talking to consumers and minimizes representatives’ downtime. But it also means that some calls are abandoned: consumers are either hung up on or kept waiting for long periods until a representative is available. The use of prerecorded-message telemarketing, where a sales pitch begins with or is made entirely by a prerecorded message, also violates the TSR because the telemarketer is not connecting the call to a live sales representative within two seconds of the called person’s completed greeting. 14 For a company to use prerecorded sales messages, it must have the prior express consent (opt-in) of the consumer. 11.1.1.6 Abandonment Safe Harbor According to the FTC guidance, the abandoned call Safe Harbor provides that a telemarketer will not face enforcement action for violating the call abandonment prohibition if the telemarketer: 4 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP Uses technology that ensures abandonment of no more than 3 percent of all calls answered by a live person, measured per day per calling campaign Allows the telephone to ring for 15 seconds or four rings before disconnecting an unanswered call Plays a recorded message stating the name and telephone number of the seller on whose behalf the call was placed whenever a live sales representative is unavailable within two seconds of a live person answering the call Maintains records documenting adherence to the preceding three requirements To take advantage of the Safe Harbor, a telemarketer must first ensure that a live representative takes at least 97 percent of the calls answered by consumers. Any calls answered by machine, calls that are not answered at all, and calls to nonworking numbers do not count in this calculation. 15 Finally, to be within the Safe Harbor, the telemarketer must keep records that demonstrate its compliance with the other Safe Harbor provisions. The records must demonstrate both that the per-day, per-campaign abandonment rate has not exceeded 3 percent and that the ring time and recorded message requirements have been met. 11.1.1.7 Prohibition on Unauthorized Billing The detailed rules in the TSR have been amended over time to address specific problems that consumers have experienced. For instance, the TSR strictly prohibits telemarketers from billing consumers for any goods or services without the consumer’s “express, informed consent.” If the consumer provides the billing account information to the telemarketer during the call, then express, informed consent can be obtained in any nondeceptive manner. If, on the other hand, the telemarketer has obtained the consumer’s account information from some other source (“preacquired account information”), the TSR imposes an array of specific requirements on how express, informed consent must be obtained. In particular, the TSR has special requirements for “free-to-pay conversion” offers (offers that begin with a free trial but then convert to paid service at the end of the trial period). These rules are designed to combat the high incidence of unauthorized charges made to consumer accounts where consumers did not understand that the service provider would charge the consumer at the end of the trial period. If preacquired account information is used in connection with a free-to-pay conversion offer, the telemarketer must: Obtain from the customer at least the last four digits of the account number to be charged Obtain the customer’s express agreement to be charged for the goods or services using the account number for which the customer has provided at least the last four digits Make and maintain an audio recording of the entire telemarketing transaction If preacquired account information is used in connection with any other type of transaction, the telemarketer must still (at minimum) identify the 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. 11.1.1.8 Updates to the TCPA Rules Concerning Robocalls and Autodialers 5 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP In 2012, the FCC revised its TCPA rules governing prerecorded calls (robocalls) and the use of automatic telephone dialing systems (autodialers) to reconcile its rules with the TSR. 16 First, the FCC revised its established business relationship exemption for robocalls. Now, even if a company has an established business relationship with a consumer, it is required to receive “prior express written consent” for all robocalls to residential lines. 17 Second, the rules include a provision that allows consumers to “opt out of future robocalls during a robocall.” In addition, the revisions increase harmonization with the FTC’s rules to require “assessment of the call abandonment rate to occur during a single calling campaign over a 30-day period, and if the single calling campaign exceeds a 30-day period, we require that the abandonment rate be calculated each successive 30-day period or portion thereof during which the calling campaign continues.” Finally, also consistent with the FTC, robocalls to residential lines made by healthcare-related entities governed by the Health Insurance Portability and Accountability Act (HIPAA) are exempt from the above requirements. 18 11.1.1.9 Updates on the FCC Approach to Robotexts In 2015, the FCC issued an order explicitly stating that text messages sent to wireless devices are subject to the same consumer protections as voice calls under the TCPA. This means that the TCPA prohibits companies from sending text messages via equipment that sends the messages without human intervention, known as “robotexts”—absent express consent. 19 The order then altered the definition of “prior written consent” to require that the consent obtained must include a “clear and conspicuous disclosure” that telemarking calls or texts can be made with an autodialer or artificial voice. Further, it required that the consent could not be obtained as a requirement of purchase. 20 In 2017, the FCC provided further guidance on robotexts, including: (1) consent can be revoked by the consumer at any time by any reasonable means, (2) the mere fact that a consumer’s wireless number appears in the contact list of another wireless customer is not sufficient to establish consent, and (3) when a caller has consent for a wireless number and the number has been reassigned, the caller is not liable for the first call but will be liable for subsequent calls if the new consumer makes the caller aware of the change. 21 In 2021, the U.S. Supreme Court limited the TCPA’s definition of automatic telephone dialing system (autodialers) to equipment that has the “capacity to use a random or sequential number generator to either store or produce phone numbers to be called,” reversing broad interpretations of autodialers by lower courts that included text messages. 22 The effect of this ruling is to clarify that text message campaigns are permitted under the TCPA – so long as they comply with other requirements of the Act. 23 11.1.1.10 Record-Keeping Requirements To make enforcement more effective, the TSR requires sellers and telemarketers to keep substantial records that relate to their telemarketing activities. In general, the following records must be maintained for two years from the date that the record is produced: Advertising and promotional materials Information about prize recipients Sales records Employee records 6 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP All verifiable authorizations or records of express informed consent or express agreement These records may be maintained in whatever manner, format or medium the company uses in the normal course of business. For example, the records may be maintained in electronic or paper formats. Additionally, the TSR requires only one copy of the records to be maintained. In particular, sellers and telemarketers can decide which party should maintain which records as part of the services contract. 24 In the event of dissolution or termination of the business of a seller or telemarketer, the principal of the business must maintain all records of the business. In the event of a sale, assignment or other change in ownership of the seller or telemarketer’s business, the successor business must maintain the records. For each type of record previously listed, the TSR includes lists of the information that must be retained. For example, sales records must include (1) the name and last known address of each customer, (2) the goods or services purchased, (3) the date the goods or services were shipped or provided, and (4) the amount the customer paid for the goods or services. Similarly, for all current and former employees directly involved in telephone sales, records must include (1) the name (and any fictitious name used), (2) the last known home address and telephone number, and (3) the job title(s) of each employee. Additionally, if fictitious names are used by employees, the TSR also requires that each fictitious name be traceable to a specific employee. 25 11.1.1.11 Enforcement Provisions The TSR includes significant enforcement provisions. As noted earlier, the TSR can be enforced by the FTC as well as state attorneys general. The FTC has aggressively enforced the TSR. As noted, violations of the TSR are currently punishable by civil penalties of up to $46,517 per call. 26 The FCC and state attorneys general also actively enforce their counterpart regulations. The TSR provides for a limited private right of action against telemarketers as an individual must meet the threshold of $50,000 in actual damages to be able to file suit. 27 The ability of plaintiffs to bring a class-action lawsuit under TCPA has likely been further restricted by the 2021 U.S. Supreme Court case of TransUnion v. Ramirez, where the Court found that a plaintiff must show actual harm and not the mere risk of harm to be able to bring a lawsuit. 28 Additionally, some states have their own versions of TCPA, known as min-TCPAs, as well as their own telemarketing sales rules that carry additional penalties and may have different requirements. 29 For example, Louisiana’s Public Service Commission’s DNC General Order has different allowed time frames for making calls, limits established business relationships to six months, and has established its own penalties for violators. 30 11.1.2 Who Can Be Called: The U.S. National Do Not Call Registry The U.S. National DNC Registry is perhaps the best known of the FTC’s TSR requirements and remains the most popular consumer program ever implemented by the FTC. 31 The program provides a means for U.S. residents to register residential and wireless phone numbers that they do not wish to be called for telemarketing purposes (with specific exceptions, see section 11.1.2.1). The DNC Registry provisions took effect in 2003 and require sellers and telemarketers to access the registry prior to making any phone-based solicitations. They are also required to update their call lists every 31 days with new registry information. 7 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP The registry is accessed via an automated website at https://telemarketing.donotcall.gov/. 32 Only sellers, telemarketers and their service providers may access the registry. Each seller must establish a profile by providing identifying information about the organization. The seller then receives a unique Subscription Account Number (SAN) upon payment of the appropriate fee. Telemarketers accessing the registry on behalf of seller-clients are required to identify the sellerclients and provide the seller-client’s unique SAN. (Telemarketers access the registry, at no cost, through the use of their seller-client’s unique SANs. Their access is limited to the area codes requested and paid for by the seller-client.) The FTC’s guidance specifically states that: 33 A telemarketer or other service provider working on behalf of a seller may access the registry directly or through the use of its seller-client’s SAN. If access is gained through its seller-client’s SAN, the telemarketer or service provider will not have to pay a separate fee for that access. The extent of its access will be limited to the area codes requested and paid for by its seller-client. If a telemarketer or service provider is accessing the registry directly—that is, if a telemarketer or service provider decides to obtain the information on its own behalf—it will have to pay a separate fee and comply with all requirements placed on sellers accessing the registry. Such a telemarketer or service provider will be provided a SAN that can be used only by that company. In other words, that SAN is not transferable. In other words, each SAN belongs to a specific seller, and SANs are not transferable. Note that it is a violation of the TSR to place any call to a consumer (absent an exception) unless the registry has been checked. In other words, even a call to a consumer whose phone number is not on the registry is a violation of the TSR if the registry was not checked prior to the call. 34 The FTC, the FCC, and state attorneys general enforce the DNC Registry, which now contains approximately 250 million participating phone numbers—and is still growing. 35 As of the writing of this book, violations of the rule can lead to civil penalties of up to $46,517 per violation. 36 In addition, violators may be subject to nationwide injunctions that prohibit certain conduct and may be required to pay redress to injured consumers. 37 11.1.2.1 Exceptions to the DNC Rules DNC rules apply to for-profit organizations and cover charitable solicitations placed by for-profit telefunders. DNC rules do not apply to: Nonprofits calling on their own behalf Calls to customers with an existing relationship within the last 18 months Inbound calls, provided that there is no “upsell” of additional products or services 38 Most business-to-business calls 11.1.2.1.1 Established Business Relationship Exception Sellers (and telemarketers calling on their behalf) may call a consumer with whom a seller has an established business relationship (EBR), provided the consumer has not asked to be on the seller’s entity-specific DNC list. The TSR recognizes two distinct types of relationships: “customers” and “prospects.” 8 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP An EBR exists with a customer if the consumer has purchased, rented or leased the seller’s goods or services (or completed a financial transaction with the seller) within 18 months preceding a telemarketing call. The 18-month period runs from the date of the last payment, transaction or shipment between the consumer and the seller. An EBR exists with a prospect if the consumer has made an application or inquiry regarding the seller’s goods and services. This EBR runs for three months from the date of the person’s inquiry or application. 11.1.2.1.2 Exception Based on Consent The TSR allows sellers and telemarketers to call consumers who consent to receive such calls. This consent must be in writing, must state the number to which calls may be made, and must include the consumer’s signature. (A valid electronic signature is acceptable.) Note that the seller’s request for consent must be “clear and conspicuous.” If in writing, the request “cannot be hidden; printed in small, pale, or noncontrasting type; hidden on the back or bottom of the document; or buried in unrelated information where a person would not expect to find such a request.” 39 If online, the “please call me” button may not be prechecked. The FTC’s guidance also states: “In the FTC’s enforcement experience, sweepstakes entry forms often have been used in a deceptive manner to obtain ‘authorization’ from a consumer to incur a charge or some other detriment. Authorization or permission obtained through subterfuge is ineffective. The FTC scrutinizes any use of such sweepstakes entry forms as a way to get a consumer’s permission to place telemarketing calls to her number.” 40 11.1.2.1.3 The Do Not Call Safe Harbor The TSR has a “DNC Safe Harbor” that sellers and telemarketers can use to reduce the risk of liability. Per the guidance: 41 If a seller or telemarketer can establish that as part of its routine business practice, it meets the following requirements, it will not be subject to civil penalties or sanctions for erroneously calling a consumer who has asked not to be called, or for calling a number on the National Registry: The seller or telemarketer has established and implemented written procedures to honor consumers’ requests that they not be called, [and] The seller or telemarketer has trained its personnel, and any entity assisting in its compliance, in these procedures, [and] The seller, telemarketer, or someone else acting on behalf of the seller... has maintained and recorded an entity-specific Do Not Call list, [and] The seller or telemarketer uses, and maintains records documenting, a process to prevent calls to any telephone number on an entity-specific Do Not Call list or the National Do Not Call Registry. This, provided that the latter process involves using a version of the National Registry from the FTC no more than 31 days before the date any call is made, [and] The seller, telemarketer, or someone else acting on behalf of the seller... monitors and enforces compliance with the entity’s written Do Not Call procedures, [then] The call is a result of error. 9 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class. MGT 6727 (Spring Semester 2024) at Georgia Tech Chapter 11 – as of 03/11/2024 © IAPP This DNC Safe Harbor provides an important protection for sellers and telemarketers because violations of the TSR can result in civil penalties, as of the writing of this book, of up to $42,530 per call. 42 11.1.3 Recent Enforcement Actions Related to Robocalls In recent years, regulators have increased efforts to deal with the billions of robocalls that U.S. consumers receive every month. 43 In 2019, state attorneys general and telephone companies announced an initiative to fight robocalls. State and federal authorities undertook nearly 100 enforcement actions against illegal robocallers. State authorities focused their efforts on pharmaceutical, credit card, and loan scams. As part of the 2019 initiative to fight robocalls, more than 10 of the U.S.’s largest telephone companies pledged to all 50 state attorneys general (plus the District of Columbia) to implement call-blocking technologies and make anti-robocall tools available for free. 44 Also, in 2019, the FTC’s focused enforcement actions on complex operations that often attempted to scam consumers. 45 In 2021, the FCC issued a record fine of $225 million to telemarketers who made approximately 1 billion robocalls. 46 11.1.4 State Telemarketing Laws As neither the TSR nor the FCC rules preempt state laws, the majority of states have enacted telemarketing laws—creating additional legal requirements for telemarketers. 47 For example, more than half the states require that telemarketers obtain a license or register with the state. 48 States can also create their own DNC lists, with differing exceptions, fines or methods of consumer enrollment from their federal counterpart. 49 Some states require that telemarketers identify themselves at the beginning of the call or that the telemarketer terminate the call without rebuttal if the recipient of the call so desires. 50 Finally, states may require that a written contract be created for certain transactions. 51 11.2 Fax Marketing In addition to regulating telemarketing and internet-to-phone short message service (SMS) marketing, the TCPA, which is enforced by the FCC, prohibits unsolicited commercial fax transmissions. Consent can be explicit or inferred from an EBR. 52 In 2005, Congress amended the TCPA by passing the Junk Fax Prevention Act (JFPA). 53 The JFPA clarified whether consent was required for commercial faxing. The JFPA specifically provides that consent can be inferred from an established business relationship (EBR), and it permits sending of commercial faxes to recipients based on an EBR, as long as the sender offers an opt-out in accordance with the act. 54 Recently, the U.S. Supreme Court decided that faxed invitations which are part of market research surveys and are in exchange for money are not considered “unsolicited” under the TCPA and amended by the JFPA.. 55 Under TCPA, penalties include a private right of action and statutory damages of up to $500 per fax. 56 In 2001, Hooters of Augusta, Georgia, was found to have violated the act and ordered to pay out $12 million in a class action suit. 57 In 2004, the FCC approved a $5.4 million fine against Fax.com for violations of the act. 58 In 2019, the FCC announced that online cloud-based fax services do not fall under the TCPA and the JFPA. The reasoning is that online fax services that receive faxes (as an email) over the internet 10 NOT FOR DISSEMINATION The materials in this course are provided only for the personal use of students in this class in association with this class.