Telemarketing Software Featured Article

Is the Telephone Consumer Protection Act a 'Destructive Force' in Business?

January 20, 2016
By Tracey E. Schelmetic - Telemarketing Software Contributor

The Telephone Consumer Protection Act, or TCPA, was first signed into law in 1991 and was groundbreaking legislation at the time. The TCPA was intended to regulate what telemarketers could and could not do. It specified calling hours and the proper use of automatic dialing systems. Later, it was amended to cover do-not-call list registries and recorded outbound marketing calls, or “robocalls.” Since 1991, it’s been a thorn in the side of telemarketers, who now see that the legislation is outdated and doesn’t conform to the way people communicate today.

The TCPA has been used to bring some high profile class-action lawsuits to court recently. In 2014, Capital One (News - Alert) paid the largest fine ever for violation of the TCPA when it agreed to settle a large number of class action lawsuits with a $40 million payout. Last year, HSBC Bank agreed to pay nearly $40 million to 286,000 class action lawsuit members to end litigation against them.

One of the reasons these companies were caught is due to changes to the TCPA. Last year, the FCC strengthened the legislation, adding language that protects customers against unwanted text messages as well as robocalls, and clarified the responsibilities companies have to ensure that recycled numbers – numbers that have been assigned to new users – aren’t called without permission. The stakes have never been higher for companies to remain compliant with all elements of the TCPA. The downside is that often it’s smaller businesses that take the fall for larger companies (the Capital One and HSBC ruling notwithstanding).

Becca Wahlquist, an attorney for Snell & Wilmer, recently told South Carolina’s Palmetto Business Daily that it’s rare for TCPA litigation to be brought against its original intended target—the abusive telemarketer. Instead, it’s often third parties, such as outsourced call centers, that wind up taking the blame.

“Many businesses don’t even know the TCPA exists until they are handed their first lawsuit,” Wahlquist said. “Even businesses calling to confirm appointments or collect a payment are falling victim.”

She adds that the TCPA has become a “destructive force that threatens companies with annihilation for technical violations that cause no actual injury or harm to any consumer” and that "TCPA litigation will continue to expand and to threaten well-meaning businesses.”

Consumers may not agree with Wahlquist. Many companies have a regulatory burden placed upon them, and telemarketers probably shouldn’t be exempt from following the law simply because it’s onerous. Third-party companies such as those that provide the technology for large robocalling campaigns should be more than aware of their potential liability for breaking the law, as should outsourced contact center services providers. It seems unlikely that the FCC (News - Alert) will agree to change or eliminate portions of the TCPA in the near future, since it would be highly unpopular politically. After all, no politician wants to be known as the person who made it legal for telemarketers to begin ringing at suppertime again. 

Edited by Rory J. Thompson