FCC Changes Rules in the Telephone Consumer Protection Act, 47 U.S.C. § 227 Enforceable October 16, 2013


Recent changes to the TCPA do affect automotive dealerships and the requirements under the FCC are enforceable as of October 16, 2013. The original act was created due to consumer protest about telemarketers. The change is intended to reduce the number of unsolicited telemarketing calls and messages as airtime minutes on cellular telephones incur costs and are out of pocket damages to the consumer. Changes require that consumers provide prior express written consent for telemarketing calls and text messages with any automatic dialing system and the use of prerecorded messages. A Consent Disclosure must be provided to consumers which includes: 1) a clear and conspicuous disclosure explaining that by providing consent the consumer may receive auto-dialed or prerecorded calls or text messages on behalf of the dealership; and 2) a clear and unambiguous acknowledgement that the consumer consents to such future calls and texts.

The requirements and regulations under the FCC may apply to dealerships even if the dealership does not use automatic dialing or prerecorded messages for telemarketing purposes. The Federal Communications Commission provides the following:

The term “automatic telephone dialing system” means equipment which has the capacity: (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.

The term “telephone solicitation” means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

The term “unsolicited advertisement” means any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.

First, look at the CRM and DMS system at your dealership. Your dealership does not have to use an automatic dialing system to trigger FCC compliance requirements. Pursuant to the FCC, the equipment merely has to have the “capacity” or the ability to automatic dial for your dealership to fall within TCPA requirements. This is a broad standard. If the dealership has a telephone system or program that can potentially be programmed to dial automatically, then the system or program is considered to be an automatic telephone dialing system and is regulated by the TCPA and FCC. Courts nationwide have followed and upheld the FCC’s broad definition.

Do these changes apply to you?
Some dealerships have received correspondence regarding FCC changes and compliance. These new changes may apply to your dealership. Below are questions to ask yourself to determine applicability:

  • Does your dealership’s CRM program have a click to call system?
  • Does your dealership have the ability to extract a telephone number from its CRM program and dial without an individual in the store dialing the physical numbers?
  • Do your vendors have programs that have a click to call system?
  • Do your vendors have the ability to extract a telephone number from a CRM program and dial without an individual dialing the physical numbers?

Application as to Landlines
Another significant change is the elimination of the established business relationship exemption for telemarketing calls to residential landlines. The FCC defined an “established business relationship” as a prior or existing relationship formed by a voluntary two-way communication . . . on the basis of the subscriber’s purchase or transaction with the entity within the eighteen (18) months preceding the date of the telephone call or on the basis of the subscriber’s inquiry or application regarding products or services offered by the entity within the three months immediately preceding the date of the call, which relationship has not been previously terminated. An established business relationship will no longer serve as an exemption for prerecorded telemarketing calls to residential landlines. These calls will require prior express written consent for all future calls. Consent cannot be a condition to the purchase of goods or services and there is no “grand-father” condition alleviating the requirement of the prior express written consent from the consumer. The changes apply to both personal and business cellular telephone numbers. A consumer need not answer a call or open a text message to trigger a violation. Courts have found that even calls to wrong numbers are actionable under the FCC and TCPA because the caller does not have the required “prior express written consent.”

Consequences to Violations
Consumers can recuperate damages in the amount of $500.00 per violation. Courts may enter injunctions against violators and order treble damages if it is found that violations were committed “willfully” and “knowingly.” Attorneys are soliciting for consumers to report such calls or texts and encouraging consumers to file suit. These attorneys have the ability to subpoena dealership telephone records and will scour records to find every violation they can. There also is a potential for a class action to be brought against violators. Attorneys and consumer protection agencies are equipping consumers with knowledge of how to document and evidence TCPA violations. The caller or person text messaging has the burden of proving that consent has been obtained.

Below is a list of what you can do to stay compliant with the new changes to the TCPA:

  • Use a disclosure that clearly authorizes your dealership to call using an automatic telephone dialing system, call using prerecorded messages or to send text messages.
  • Use a disclosure on all websites, mobile applications and any other electronic source requesting that a telephone number be entered.
  • Update your dealership forms that provide a space for consumers to enter telephone numbers.
  • Use a disclosure and acknowledgement in your service and sales departments.
  • Obtain consent verified by the signature of the individual consenting.
  • Provide a consent disclosure on repair orders.
  • Verify that all phone numbers in your CRM system are appropriately marked as cellular telephone numbers and landline telephone numbers.
  • Verify with your vendors and other 3rd parties that they are compliant with the new rules provided under 47 U.S.C. § 227.
  • Ask to see 3rd party disclosures as you may be held responsible and liable for their violations.
  • Non-compliance may result in breach of agreements with vendors and other third parties.

Sample disclosure:

If you have entered a cell phone number or another number that you later convert to a cell phone number, you agree that we may contact you at this number. You also agree to receive calls and messages such as, pre-recorded messages, calls and messages from automated dialing systems, or text messages. Normal cell phone charges may apply.