TCPA OUTLOOK FOR 2017

STEVEN A. AUGUSTINOsaugustino@kelleydrye.com(202) 342-8612

MAY 25, 2017

LAURI A. MAZZUCHETTIlmazzuchetti@kelleydrye.com(973) 503-5910

LEE TERRYlterry@kelleydrye.com (202) 342-8859

KEN SPONSLERSenior Vice President and GM CompliancePoint

Calling Consumers = Highly Regulated

Federal Telephone Consumer Protection Act

(TCPA) Telemarketing Sales Rule (TSR)

State Telemarketing Laws e.g., Registration/Bonding; Wireless

restrictions; DNC

Rules on How, When, What You Need Before You Dial, and Exceptions Vary

Telephone Consumer Protection Act (TCPA) TCPA prohibits, among other things:

Calls/text messages to wireless phones (ATDS) without consent

Pre-recorded message calls to cell phones and residential landlines without consent

Telemarketing calls to do-not-call lists

Telemarketing calls to numbers on the National Do Not Call Registry

Fax advertisements sent without consent

Inaccurate caller identification information, fraudulent caller ID information

Consent Depends on Type of Call/Text

Mistakes Can Be Costly Not just telemarketing

B2B communications

Third party liability

TCPA Statutory Damages

$500 to $1,500 per violation

TSR Civil Penalties

Up to $40,000 per violation

State Enforcement

State AGs can enforce TCPA and pursue state law remedies

Debt Collection Challenges Debt Collection Industry TCPA Challenges

Among the most common TCPA class action sources Current state of TCPA unsupportive of legitimate collection

efforts Revocation of consent vs. Do Not Call Skip tracing minefield Lack of reliable number porting sources Subscriber vs. authorized user

What the Data Reveals: Individualized agent note review imperatives Falsely reported wrong number contacts Revocation of consent & subsequent inbound contacts Intentional/unintentional contact information errors Family/relative mobile telephone sharing

The FCC and the TCPA –2014 Fax Advertisement Order 2 Main Issues:

“Opt out” Notice on Solicited Faxes Retroactive Waiver of the “Opt Out” Requirement

D.C. Circuit Court Ruling: 2-1 decision Overturned the opt-out rule for solicited faxes because the

FCC has no statutory authority with regard to solicited faxes Rejected the FCC’s public policy argument

The issue going forward in fax-based TCPA litigation will be the validity of consent

The FCC’s July 2015 Omnibus Order

FCC Ruling Adopted on June 18, 2015; released July 10, 2015

3-2 vote (dissenting in part, approving in part)

Expands “autodialer” definition

No real safety net for reassigned or wrong number calls to cell phones

Confirms consumer’s ability to revoke consent in any reasonable way

Bottom line: Order created as many concerns as it clarified

Industry Reactions and Challenges

Myriad of “Manual Dial” Solutions Current vs. potential/future capacity Hardware/software considerations How contracts can help Open vs. closed software sourcing

Revocation of Consent Absence of an acceptable timeline to honor DNC safe harbor = no longer than 30 days

Calls for Legislative Response

The Appeal –2015 Omnibus Order 3 Main Issues:

Definition of Autodialer – Current capabilities v. potential future capabilities of devices

Definition of Called Party – Current subscriber v. intended recipient Revocation of Consent – Revocation at any time and through any reasonable

means, and no limits on the manner in which revocation may occur

Observations from Oral Argument at the D.C. Circuit: Argument lasted nearly 3 hours Significant debate of the contours of the “autodialer” definition in the TCPA Concerns about notice to callers of number reassignment

The D.C. Circuit’s decision will significantly impact both pending and future TCPA litigation.

The FCC and the TCPA –What’s Next? Action on Robocalls and Spoofing

Industry-led Robocall Strike Force Pending NPRM/NOI seeks to reduce spoofing by allowing carriers to

block calls: Upon request from a subscriber whose telephone number is being

spoofed If the calls are placed from:

Invalid numbers Valid numbers that are not allocated to a voice service provider Valid numbers that are allocated but not assigned to a subscriber

Industry-Specific TCPA Exemptions Calls on Behalf of the Federal Government Government Debt Collection

The FCC and the TCPA –What’s Next? (cont’d)

New TCPA Issues and Questions Provision of phone number as evidence of consent

(consumer-based petition) Applicability of the TCPA to direct-to-voicemail

technology and services Emerging challenges involving VoIP services

Novel questions raised in litigation will continue to bethe driving force behind petitions for FCC rulings and

clarification on TCPA issues.

Recent Trends in TCPA Litigation• Call/Text campaigns = Hot docket of TCPA litigation ($500 to

$1,500 per violation)

• Cases focus mainly on autodialer and lack of sufficient disclosure and consent

• New FCC leadership …

Recent Trends in TCPA Litigation (cont’d)

Fax cases before and after the Bais Yaakov decision Class certification issues Types of new cases being filed Court views on “stays” of TCPA cases pending FCC or

D.C. Circuit action

Outlook for TCPA Legislative Reform

Reform Efforts by Private Parties KDW has developed and manages the A-Z

Communications Coalition working to modernize and update the TCPA

Meetings with the Commission and Congressional staff continue.

These efforts have produced a draft legislative fix for decision makers to consider.

The anticipated court decision will help to drive the coalition's next action items.

CONTACTS

STEVEN A. AUGUSTINOPartner (202) 342-8612saugustino@kelleydrye.com

LAURI A. MAZZUCHETTIPartner(973) 503-5910lmazzuchetti@kelleydrye.com

LEE TERRYPartner(202) 342-8859lterry@kelleydrye.com

16

KEN SPONSLERSenior Vice President and GM CompliancePoint