By: Tim Prugar
For businesses that leverage telecommunications as a primary method for selling, whether through voice or SMS channels, the election of Donald Trump to the presidency signified a potential sea change in the way that the Telecommunications Consumer Protection Act (TCPA) would be viewed and enforced. On the one hand, Trump has spoken frequently and publicly about the need to grow American business and remove regulatory barriers that might inhibit that growth. On the other hand, Trump’s new Chairman of the FCC, Ajit Pai, has come out swinging in his vows to stop the “scourge” of robocalling, a major business tool of telemarketers. With these two seemingly competing views of how to approach telemarketing and other telecommunications-based sales outreach, what can businesses expect from TCPA interpretation over the course of the Trump presidency?
One of the only ways to make accurate predictions is to monitor, analyze, and discuss TCPA cases that are taking place right now.
Kern v. VIP Travel Services
Last week, a United States District Court in Michigan issued an opinion in a class action lawsuit against a series of hotels by consumers who had been marketed to on their cell phones. According to the consumers, third-party travel agents were leveraging autodialers to reach them on numbers that were registered with the Do Not Call (DNC) Registry. The consumers alleged that these agents were not only violating TCPA, but that they were doing so with the full blessing of the hotels, who they alleged had provided material assistance in the form of resources and marketing collaboration. The consumers also alleged that the hotel logos were clearly visible on the third-party agent web sites.
Naturally, the hotels objected to these allegations, and stated emphatically that the third-party agents were acting of their own accord. The courts sided with the hotels, noting that the contracts between the hotels and the the third-party agents clearly established the agents as independent contractors and explicitly stated that all laws governing marketing, including TCPA, should be adhered to. The courts found no evidence that the hotels gave consent for their logos to be used on the web site.
The theme at the center of this legal dispute is the concept of “vicarious liability.” Essentially, the consumers were alleging that the Hotels should be held responsible for the behavior of the third-party agents. In this case, the courts argued that in order to prove “vicarious liability” in a TCPA suit, the party making the allegations has to prove more than the “mere nexus” of the defendant and the caller. They have to provide solid evidence - which the courts believed the plaintiffs failed to do.
So what does this mean for businesses? First, these kinds of lawsuits still cost defendants in the form of time, stress, and legal fees. Second, businesses working in the telemarketing space (whatever form that must take) need to be aware of and tuned in to the business practices of any third-party vendors to whom they might outsource sales or marketing. Their actions can come back to haunt you. Third, make sure that you are checking the validity of a number before every single outbound dial – cross-referencing the DNC Registry, checking for changes in porting, and confirming line type.
The future of TCPA enforcement is still uncertain, but being wary, informed, and compliant will never go out of style.
Tim Prugar is Next Caller's Director of Customer Success. He can be reached at firstname.lastname@example.org.