By Karen Kerrigan-
The need for businesses of all sizes to do more virtually, safely and efficiently in the COVID economy has underscored the need for government at all levels to modernize or change rules and policies to enable consumer purchases and engagement under restrictive conditions. The utilization of tech tools and platforms are playing a critical role in helping small businesses to stay open and to operate safely during this challenging period.
In my own experiences, for example, when I have visited doctors or other personal service providers for various appointments I have noticed an uptick in the use of text messaging to confirm my appointments or request that I communicate with the office via text to let them know when I arrive to ensure appropriate social distancing in the lobby or sign-in area. Food delivery services have also texted me when my order is on the way or being dropped off at my front door, and restaurants have alerted me when my order is ready for curbside pick-up. Of course, with most of these purchases or engagements, they all started with me using platforms or apps where I placed my order or scheduled an appointment.
The accelerated use and deployment of technology has become essential for consumers and businesses alike, and is allowing commerce and our economy to keep chugging along. However, under existing law – and specifically the Telephone Consumer Protection Act (TCPA) of 1991 – the use of texting as a form of communication is being used under a cloud of uncertainty that hangs over most businesses.
As SBE Council has previously noted in our various communications and advocacy efforts during the past couple of years, the TCPA requires a modern makeover that will align its framework with how businesses and consumers communicate in the digital economy. As I noted in an August 2018 Morning Consult Op-ed:
TCPA is strict and “unforgiving.” Even if a business misdials a number, or dials a reassigned number that was previously used by someone else, each violation entitles the person on the receiving end to file a lawsuit and seek damages of $500 to $1,500 per unsolicited call, text or fax per person.
These non-marketing calls can be notifications about potential fraud, or reminders about appointments, due dates and other customer-service courtesies. Yet the threat of TPCA litigation is chilling this activity, which is troublesome for customers who count on prompt outreach from a business about their accounts or information pertaining to important matters, such as medical appointments and even life-saving information.
An insidious cottage industry of plaintiffs’ lawyers and professional TCPA plaintiffs are making a very nice living off this ambiguous and outdated law. According to litigation analyst WebRecon LLC, TCPA lawsuits have increased by 1,272 percent since 2010. In 2008, there were 16 plaintiffs nationwide that filed TCPA claims in federal court. That number grew to 1,136 plaintiffs in 2012. By 2016, there were 4,860 claims in federal court.
About 100,000 telephone numbers are reassigned by mobile carriers every day, and this large amount means that companies risk triggering a TCPA lawsuit if they happen to call or text the wrong party about important or time-sensitive information.
Obviously, with the growth of texting and similar communications being used via smart phone and other devices, which support efficient and safe communications in the COVID-19 economy, the need to update TCPA has become even more acute. But even prior to the onset of the pandemic, consumers conveyed their support for allowing businesses and medical providers to communicate with customers and patients about critical matters that are non-telemarketing in nature. A mid-November 2019 Morning Consult Survey sponsored by SBE Council, for example, found that while there is strong support for cracking down on robocallers, 66% of voters thought it should be “less onerous for companies to contact their customers with important account information and updates.” In addition:
● Voters say they support calls and texts for non-telemarketing purposes from medical providers (87%), utility companies (84%), schools (84%) and financial institutions (82%). Over 4 in 5 voters say they support calls and texts for non-telemarketing purposes from financial institutions (82%) and say they want to be contacted with suspected fraud alerts (87%).
● Voters say they are concerned that these calls and texts from financial institutions may be blocked under the current legal regime. Two thirds of voters say they are concerned that financial institutions may be blocked from contacting consumers with time-sensitive information (67%), may be sued for alerting consumers of suspicious account activity (66%) and may not contact consumers with fraud alerts or other notifications (65%). Two thirds of voters also say they are concerned that medical providers may not contact them with important information (64%).
● By nearly a 20% margin, voters say the Federal Communications Commission (FCC) should reform the TCPA to allow companies to use automated technology to reach customers with non-telemarketing communications (48% to 29%).
● 62% of voters say it is important for the FCC to reform the TCPA to allow companies to use automated technology to reach customers with non-telemarketing communications such as data breach notifications or low account balance alerts.
● Both Democrats (63%) and Republicans (64%) think it is important for the FCC to reform the TCPA to allow companies to use automated technology to reach customers with non-telemarketing communications
Interestingly enough, 83% of voters said they haven’t seen, read, or heard anything about the TCPA. Yet, when the law was described to survey participants 77% said they support the TCPA. This high level of support for consumer protection makes sense given the problems with robocalls and aggressive telemarketing over the years. No one thinks the TCPA should be thrown out, but it does need to be fixed.
The FCC has not yet taken up TCPA modernization. However, under Chairman Ajit Pai’s leadership, the FCC has done a laudable job of advancing measures – including issuing significant fines – to help curb abusive robocalling. As noted by YouMail, the number of robocalls during the Spring of 2020 dropped significantly: “April robocalls were almost 50% lower than last October’s monthly peak of 5.7 billion calls.” (Yes, that billions.)
At the same time, the U.S. Supreme Court is considering the autodialer (read: robocaller) question, as it decided in July that it will take up Facebook v. Duguid, which “may lead to clarity for businesses that have wondered whether automated calls and texts they send consumers are legal,” according to an article in Bloomberg Law. As further explained in the piece:
The 1991 Telephone Consumer Protection Act bans companies from using an autodialer to call or text consumers without advance permission. Circuit courts are split, however, over which technologies qualify as autodialers.
Resolving the split is important for businesses, who need to know whether the technology they choose puts them in violation of the law. Companies face fines of up to $1,500 per call or text if they violate the TCPA.
“The Supreme Court now has a clear path to determine whether the TCPA applies only to random-fired calls or to all calls dialed automatically,” Eric Troutman, a partner at Squire Patton Boggs who specializes on the TCPA, said in an email. “This will be the biggest ruling ever for the TCPA.”
Facebook’s petition challenges the U.S. Court of Appeals for the Ninth Circuit’s broad interpretation of the “autodialer” term. The Ninth Circuit ruled that Facebook used an autodialer to notify a consumer of a suspicious attempt to access his account.
Several other courts, including the U.S. Court of Appeals for the D.C. Circuit, have favored a narrower definition of autodialer. Businesses back the narrow definition, which gives them more technological options for sending messages.
It is critical that both the Supreme Court and FCC consider how consumers are harmed by the existing TCPA regime. They both have the opportunity to appropriately fix the broad definition of autodialer, which will help to modernize TCPA and make it work for the massive digital shift in business-to-consumer communications (and vice versa) that is critically important in the digital – and COVID-19 – economy.
Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.