TCPA in the Age of Trump : Kern v. VIP Travel Services

AP Photo/Charlie Neibergall

AP Photo/Charlie Neibergall

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 tim@nextcaller.com.

6 Takeaways from the RoboCall StrikeForce

Yesterday, the FCC RoboCall StrikeForce presented their final report, actions, and recommendations. Next Caller Account Executive Tim Prugar sat in on the webcast, and here are his takeaways.

There are few greater pleasures in life than taking a seat in a cozy chair, slipping on some headphones, and watching an hour-long livestream of a government hearing. Yesterday, at 1:00 PM EST, that’s precisely what I got to do. Believe in yourself kids…dreams really do come true.

Before getting to the meat of the presentation, a solid recognition, admiration, and appreciation of the work that the StrikeForce members put in is in order. The StrikeForce was assembled in Late July, and over the course of 60 days the committee engaged in over 100 meetings, produced a 47 page report, and rolled out an aggressive timeline for continued action steps. From my estimation, this committee worked at blazing speed, and should be commended for that.

Now, onto my key takeaways:

 

1.     The FCC Has Fantastic Taste in Music

The waiting music the FCC plays on its website before the livestream kicks in? A soft jazz version of Michael Jackson’s “Man in the Mirror”, inarguably one of the greatest songs ever recorded.

 

 

2.     Both the FCC and Carriers Will Focus on Increasing Consumer Information

 One of the largest tangible outputs of the StrikeForce was the launch of a brand new FCC website:

https://www.fcc.gov/stop-unwanted-calls

The site approaches RoboCalls from a perspective of lessening their impact. The site gives consumers information on what RoboCalls are, the legal regulations surrounding telemarketing, remedies that customers can take to protect themselves from RoboCalls, as well as a clearly identified place for lodging complaints.

As technical solutions are much more difficult and costly to build, look for both carriers and government actors to create better-educated consumers, particularly those consumers that fit demographics that are at-risk for phone fraud.

 

3.     VOIP Throws a Wrench in the System

 One of the trends that came up multiple times during the report is that any technical solution to be launched by Carriers to stop RoboCalls and Call Spoofing needs to be able to detect both calls that originate from traditional landlines as well as internet-based VOIP calls. AT&T stated explicitly that the majority of call spoofing originates through VOIP, so being able to analyze and detect these type of calls is of primary importance. Look for Carriers to heavily invest in R&D or vendor solutions that can analyze landline, mobile, and VOIP to detect spoofing…preferably real-time.

 

4.     Info-Sharing and Cooperation Among Carriers is a Must

One of the most celebrated outputs of the StrikeForce was the “Do Not Originate” (DNO) List. The DNO list, as documented here, allows organizations who do not make outbound calls displaying their inbound number (IRS, 911) to petition to have their number blocked by carriers when it displays as the outbound number. The IRS made written DNO Requests for a series of numbers, and reported a 90% reduction in reports of IRS scam calls following the deployment of a DNO.

To be fair, it’s unclear how much of that reduction was due to these raids in India, but it is still an impressive result.

A successful adoption of a national DNO Registry requires cooperation across Carriers. In addition, the StrikeForce made recommendations to increase sharing of information on “bad actors” across networks, effectively creating a “telecommunications profile” of a phone scammer. The committee also suggested creating “Call Categories” as an industry that will limit false positives when blocking spoofed or potentially fraudulent calls.

 

5.     The Government Has a Tolerance For False Positives

One of the largest concerns for Carriers when cracking down on RoboCalls and Call Spoofing is pretty straightforward: what are the legal and business ramifications for blocking flagged calls that are actually legitimate?

The FCC made it clear that, if Carriers are doing their due diligence and making a good faith effort when blocking calls, the FCC will push for “safe harbor” to protect Carriers from litigation, either criminal or civil.

As Commissioner Rosenworcel stated, “If you need to break things to get this done, just ask.” This was my second favorite quote of hers on the day, finishing slightly behind “I DON’T BELIEVE IN PARTICIPATION TROPHIES.” The FCC should hire Mike Gundy.

 

6.     The Carriers are Expected to Foot the Bill

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So it’s easy to agree in theory that RoboCalls and Call Spoofing are bad. It’s even somewhat easy to agree on the technology that’s most effective for stopping said calls. Where things get tricky is identifying how, and who, exactly, will be paying for the R&D, technology, training, and deployment. Luckily, FCC Chairman Tom Wheeler laid out the government’s position pretty clearly:

The Carriers will be expected to foot the bill, as stopping RoboCalls is “the cost of doing business” and falls under the umbrella of supplying a high-quality service.

It will be interesting to see what impact that stance will have on timelines, innovation, and deployment. 

The FCC vs. The Proliferation of Robocalling

 

By: ShirWan Little

 

Lets face it, few things are as annoying as answering the phone and being immediately greeted by a recording trying to lure you into handing over your credit card information. This increasingly common situation is a result of robocalling.  Currently, robocalling scams account for over $350 million in financial losses every year in the United States.  Moreover, the robocalling scourge has become the most common complaint that the FCC receives from the public. The “Do Not Call List” was created over ten years ago to resolve this very problem.  Unfortunately, the Do Not Call list has failed miserably at this goal. Let’s dive into why the DNC List fails to stop these fraudsters, why robocalling has become so popular and what the FCC is doing to try to stop it.

 

Do Not Call

At the creation of the “Do Not Call List,” the majority of robocalls were legitimate telemarketers selling real products.  Against those calls, the “Do Not Call List” has remained largely effective.  However, a lot has changed since the “Do Not Call List” went into effect in the early 2000s. In particular, the