For small business owners who use telemarketing, each call puts your business at risk of paying millions in fines under the TCPA. Are you familiar with the regulations and their court interpretations? If not, the risks to your business have now increased. Unfortunately, intent and a lack of understanding are not a defense in court. Without consideration for fault, intent, or even knowledge of wrong conduct, the TCPA sets fines at $500 for each call and up to $1,500 for each knowing or willful violation. The higher your call volume, the greater the financial risk of your small business owning millions for conduct you may not have known was illegal.
When Did The TCPA Became a Threat?
The Telephone Consumer Protection Act (TCPA) was enacted by Congress in 1991 to protect consumers from unwanted and intrusive telemarketing calls. That time period was prior to most households becoming wireless-only and long before smartphones. Since then, the law has morphed into a cash cow for shrewd lawyers and fake consumers. They know how to work the system to enrich themselves by filing bogus claims at the expense of unsuspecting business owners.
The technology used today by the teleservices industry and consumers is far more advanced than what was common in 1991. This has caused uncertainty within the TCPA when it comes to applying outdated regulations to today’s advanced telecommunications technology. More and more lawsuits now require the courts to provided additional interpretations and clarifications to determine the merits of each TCPA case.
A major turning point came in July 2015 when the Federal Communications Commission (FCC) issued an Omnibus TCPA Declaratory Ruling to address autodialers, reassigned numbers and revocation of consent. Good intention became an invitation for additional TCPA lawsuits. According to a recent study, between July of 2015 and December 2016, over 3,000 TCPA cases were filed. That number represents a 50% increase in TCPA litigation.
It doesn’t matter if you are a business-to-consumer or business-to-business telemarketer; the risks are the same as cell phones have increasingly blurred the line between business and personal phone usage. Now more than any other time, businesses are at increased risk of lawsuits if telemarketing plays a role in your marketing plans.
How Does the TCPA Affect Small Businesses?
For small business owners, the year-to-year increase in TCPA litigation poses a threat to your business as the odds of your involvement in a lawsuit rise. For the small business owner there are fewer financial and legal options available, than those of large publically traded companies, to put up a good defense. You are more likely to settle or risk losing your business. This fact makes you a greater target for serial litigators who abuse the TCPA for profit.
As an example of the runaway costs, imagine you are working with a third-party call center that makes 5,000 marketing calls per month on your behalf. After a year of marketing, you’re served with a lawsuit claiming that someone on your monthly call list had not provided their prior consent. Suddenly all of your contacts are in question. You need a lawyer to defend against a potential class action lawsuit. In addition to the cost of the lawyer, each monthly call could cost you $500. That means that for calls made over a twelve month period you could pay a fine totaling $2.5 million.
Today’s TCPA forces good businesses to pay millions in TCPA fines and rewards those who know how to work the legal system. Typically the plaintiff’s attorneys get 30% of the settlement amount which can be in the millions from a class action. The supposed victims get about $32, enough to pay for dinner. Is this justice?
Congress and the FCC need to address the deficiencies inherent to the TCPA in total and make sweeping revisions that bring it into the 21st century. Regulators should take a practical approach that addresses technology and offers companies, attempting in “good faith” to communicate with customers, protection from lawsuits that abuse the legal system.
How Can I Protect My Business From TCPA Lawsuit Abuse?
It is important for every small business owner to follow all Federal and State regulations. That includes the TCPA and DNC Registry. It doesn’t matter if you call 100 or 100,000 consumers. The rules are the same, as are the punishments. If you are unsure of the regulations, you can turn to a compliance service provider such as Contact Center Compliance. They have systems in place for managing your contact lists that ensure their regulatory compliance.
Most small businesses use one or more third-party call centers to conduct telemarketing. Because of their shared legal compliance responsibilities, the relationship is more of a partnership. As such, it is important that both parties are in agreement with how to handle leads. Don’t forget that your third-party partners are an extension of your business. If a lawsuit arises, the focus will be on your business and what you did or did not do that led to the allegations.
Because of confusion in understanding the TCPA regulations, many businesses are reluctant to implement compliance monitoring programs out of fear that they will be targeted for future litigation. The reality is that closing your eyes to the problem won’t save you from a lawsuit. It is best to approach the issue with eyes wide open and have a compliance plan.
Call Center Tips For Protecting Your Business
- Before you begin marketing through a call center, conduct due diligence to verify that they are in compliance with all TCPA and DNC regulations.
- Make sure the call center maintains records and has a process for monitoring and review. Someone from your business needs to be regularly involved.
- Whether its telemarketing scripts, text messages, or faxes, review every word of copy. Verify that your copy is exactly what you want and that it follows Federal and State regulations. Ask questions. If call center adds or removes copy, have them explain the reason. Remember, every word communicated to your contact list is a reflection of your business to both consumers and regulators.
- Someone within your business should personally listen to complaints and take them seriously. Acting quickly with a thorough investigation can resolve issues and spare your business a lawsuit.
- If you are launching a marketing program using a new marketing platform that is unfamiliar to you, consult with an attorney. Not including the correct disclosures or opt-out language could easily become a lawsuit.
- Double check your copy to make sure it contained the proper opt-out language.
- Seek out a reputable TCPA compliance provider to insure your calling data is compliant with all telemarketing regulations.
CLOSING THOUGHTS
Congress and the FCC need to seriously address the deficiencies in TCPA regulations. Instead of allowing the courts to slap patches on it, they need to sit down and bring it up to date with the technology current used in the industry. Small business owners who follow the TCPA should not be afraid that a new court interpretation of regulations will put them on the hook for millions in fines.
With attorneys and consumers setting their targets on big paydays from the next TCPA calls action lawsuit, every business owner should be on high alert. One errant call or misspoken word could be the trigger. The problem for small businesses is that one major lawsuit could leave them liable for millions and push them into bankruptcy.
It is time for Congress and the FCC to put an end to the abuses imposed on every business owner. They need to push forward practical solutions that protect consumers and promote corporate responsibility. The current regulations don’t make the system better; they just line the pockets of greedy lawyers without fixing the real problems.
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