Members of Congress continuously face two incongruous complaints about the TCPA. First, countless consumers complain each year about the number of unwanted and unlawful robocalls received at all hours of the day. On the other hand, diligent companies who strive to comply with the TCPA complain about being the target of class action litigation where the TCPA’s $500-per-call statutory damages are used as a means to extract millions of dollars in settlement payments from companies that endeavor to comply with the law. Thus, while legislators are no doubt concerned about the lawsuit abuse that the TCPA promotes, it is politically challenging to address that issue without engendering the anger of consumers and consumer protection groups.
Indeed, a recent Congressional hearing saw these exact arguments play out. On June 13, 2017, the House Subcommittee on the Constitution and Civil Justice heard testimony as part of a hearing titled “Lawsuit Abuse and the Telephone Consumer Protection Act.” During the hearing, members of Congress heard about how the TCPA was being abused—including the abuse by individuals who obtain dozens of cellphone plans in order to better position themselves to cash in on the TCPA—while plaintiffs’ lawyers argued that the TCPA’s statutory damages are an effective deterrent preventing more widespread abuse.
Three new developments from the FCC signal that Republican Chairman Pai is seeking to end this impasse. Through these actions, Chairman Pai has demonstrated his intention to address consumer concerns regarding unwanted robocalls and text messages, while at the same time promoting reforms that may make it easier for businesses to comply with the TCPA. If successful, his efforts would lay the groundwork for an environment in which further reform efforts on Capitol Hill may be more likely to succeed.
On June 22, 2017, the FCC announced three major actions related to the TCPA. Collectively, these actions serve as a reminder that companies that want to see legislative reforms for the TCPA should consider enhancing engagement with the FCC. In my view, only when more companies speak out about the TCPA challenges they face, and support common-sense changes that help address consumers’ concerns, will it be politically palatable to explore the changes necessary to curb the lawsuit abuse that plagues the TCPA today, such as reducing or capping the TCPA’s statutory damages.
Let’s look at each of the FCC's TCPA-related actions, how those actions may impact the larger debate about the TCPA, and why those actions are a reminder that a good TCPA defense strategy includes active participation with the FCC.
1. Enforcement Power
In a show of force aimed at cracking down on bad actors, the FCC proposed a $120 million fine against Mr. Adrian Abramovich and his company, Marketing Strategy Leaders, for making 96 million spoofed robocalls during a three-month period. The FCC’s basis for the fine is violation of The Truth in Caller ID Act of 2009, including FCC rules that prohibit spoofing with the intent to cause harm, defraud, or wrongfully obtain anything of value. According to the FCC, TripAdvisor received complaints in 2016 claiming the company had been using robocalls to offer discounted travel. Upon investigation, TripAdvisor uncovered Abramovich’s scheme: placing calls with TripAdvisor’s name in the caller ID.
In addition to the fine proposed for violating the Truth in Caller ID Act, the FCC’s Enforcement Bureau also issued a citation to Mr. Abramovich for violating the TCPA. Abramovich is accused of calling numbers on the Do Not Call List, making robocalls to emergency medical pagers, making advertising calls to residential lines using precordeded messages and without appropriate consent, and placing autodialed calls to mobile phones without consent. For individuals and companies that are not FCC-licensed common carriers, the FCC must issue a warning before it can impose fines for violating the TCPA. However, if the FCC finds that Abramovich continues to violate the TCPA, he may be subject to monetary forfeitures of up to $19,246 per violation.
While your company is likely complying with the Truth in Caller ID Act, that’s not enough in this situation to stop the FCC’s Enforcement Bureau from knocking on your door. If your company, like TripAdvisor, is the victim of spoofing, good relationships at the FCC may be important to resolving the issue quickly and getting the FCC’s support in protecting your company’s valuable brand.
2. Using Technology to Authenticate Callers and Avoid Caller ID Spoofing
The Chairman proposed a Notice of Inquiry to solicit comment on potential technical solutions to authenticate caller ID so that consumers can avoid uninvited robocalls and ensure the accuracy of the caller ID. According to the Notice of Inquiry, the Commission is considering whether it should implement standards to verify and authenticate caller ID information when calls are carried in IP format. The inquiry proposes that the caller-ID authentication may be a necessary companion to other efforts that the Commission is considering, including technological solutions to block unauthorized robocalls. However, as the Commission notes, the technologies are not likely to succeed if robocallers are still able to easily alter their caller ID.
The Notice of Inquiry specifically seeks comment on how the Commission should encourage telephone providers to adopt authentication mechanisms, including whether it should mandate adoption of these new mechanisms. It also asks how the Commission should oversee governance and policy aspects of certifying entities serving as authenticators for the caller ID. The Commission’s inquiry requests the benefits and drawbacks of designating an existing numbering administrator, such as the North American Numbering Plan Administrator (NANPA), to oversee the call authentication policy, or whether a new entity should be created.
In sum, the FCC appears to be actively considering the creation of new rules or regulations that would make it difficult for bad actors to spoof caller IDs. If the proposed technology is adopted, it has the potential to cut down on the unlawful robocalls that generate so many consumer complaints. In my view, this type of movement is a good thing. As long as the FCC is flooded with complaints about bad actors, it is going to be difficult to ignore these common-sense reforms.
3. Creating Practical Solutions to Avoid Liability for Reassigned Phone Numbers
Chairman Pai proposed a Second Notice of Inquiry that he intends to ask the Commission to adopt at its next opening meeting on July 13, 2017. This NOI seeks to address the issue of automated calls made to reassigned telephone numbers. Under existing FCC rules (currently pending appeal at the D.C. Circuit), companies have a “one call” safe harbor to learn that a number has been reassigned to a new user that, unlike it’s prior user, has not given consent for robocalls or text messages. If the company’s "one call" does not actually inform the company that the number has been reassigned, the company may nevertheless face damages for violation of the TCPA.
The Second Notice of Inquiry, if adopted in July, would invite comment on the best ways for service providers to report information about reassigned numbers, and how to share that information with companies that make automated calls. The FCC notes that 35 million numbers are disconnected each year, and approximately 100,000 are reassigned by wireless carriers each day. According to the FCC, existing technology can help identify many of the reassignments, but there’s no guarantee that the technology captures all number reassignments. The FCC is therefore considering whether to require carriers to report number reassignments in an accurate and timely way. The Commission will also consider whether to extend the reporting requirement to all carriers, including landline and VoIP providers, or whether to extend it only to wireless carriers. Finally, the Commission will consider who the reassignments should be reported to. The reporting alternatives include:
- A new centralized, FCC-established database;
- Multiple reassigned data aggregators and robocallers;
- Providers to create and operate queriable databases; or
- Public reports available for download.
The Second Notice of Inquiry is a clear signal that, regardless of whether the D.C. Circuit upholds the controversial rules adopted in 2015, Chairman Pai is looking for solutions that will make it more feasible for companies to avoid sending calls to reassigned phone numbers. This will be a win for both consumers and the companies that are expected to avoid calls to reassigned phone numbers without any guaranteed way to do so. For this reason, I would encourage companies to take an active role in supporting this effort and offering suggestions on how to most efficiently address this issue.
How can the industry be involved? If you are interested in the issues raised by the Notice of Inquiries discussed above, now is the time to develop your FCC engagement strategy. The FCC’s Commissioners welcome the opportunity to hear directly from businesses that are impacted by these issues – particularly those that are doing the right thing.
TCPA Defense Force has liaised with the FCC on behalf of many companies. We are here to help your company prepare and file written comments or schedule in-person meetings.