Telemarketing Laws and Regulations
Navigating the Complex Landscape of Telemarketing Laws and Regulations
The Ecommerce Innovation Alliance (EIA) is at the forefront of representing ecommerce companies in the ever-evolving landscape of telemarketing laws and regulations. We are active both at the federal level with the Telephone Consumer Protection Act (TCPA) and across various states with “mini-TCPA” and state telemarketing laws.
Above all, we understand that while these regulations aim to protect consumers, their current interpretation and application are increasingly leading to frivolous litigation that poses a significant threat to ecommerce businesses of all sizes.
The Rising Tide of Frivolous Litigation
Small and mid-sized ecommerce businesses rely on direct communication channels, including text messaging, to engage with their customers. In most cases, the customers have provided explicit consent to receive these marketing messages. However, ambiguities and expansive interpretations of the TCPA and state laws are being exploited by serial plaintiffs and opportunistic law firms. This has resulted in a surge of costly and often meritless lawsuits alleging violations, even when businesses are acting in good faith and with consumer consent.
These lawsuits often focus on technicalities and can demand significant statutory damages for each message. This can potentially lead to crippling legal expenses and even bankruptcy for ecommerce companies. Examples of these abusive practices include:
Exploitation of “Quiet Hours” Provisions
Law firms are actively soliciting plaintiffs claiming that any text message received outside the 8 a.m. to 9 p.m. window, even with prior consent, constitutes an illegal text entitling them to significant damages.
Overly Broad Definitions in State Laws
Newly enacted or proposed state “mini-TCPA” laws often feature overly broad definitions of telemarketing and automatic dialing systems. This is creating uncertainty and the risk of litigation for legitimate business communications.
Manufactured Claims Based on Opt-Out Methods
Serial plaintiffs are bypassing standard opt-out commands like “STOP” and instead claiming that only hard copy letters constitute a valid opt-out. After that, they are arguing they are entitled to substantial damages for subsequent messages.
Location-Based Laws Applied to Mobile Phones
EIA is helping state and federal regulators understand that applying laws that depend on the location (including state) of a mobile phone creates an impossible situation for businesses who are unable to access real-time location data for consumers’ mobile phones, making compliance a near impossibility.
Demands for Individual Sender Identification
Some plaintiffs claim violations for the failure to include the first and last name of an individual sender in marketing text messages, even when the company is clearly identified.
EIA: Your Advocate for Fair and Balanced Regulations
The EIA is dedicated to creating a more predictable and fair legal environment for the ecommerce industry. For instance, our work on TCPA and state telemarketing regulations focuses on several key areas:
Engaging with the Federal Communications Commission (FCC)
We actively participate in FCC rulemakings, such as the current docket on the Implications of Artificial Intelligence (AI) Technologies. We advocate against overly broad regulations that would require new consent for the use of AI in SMS marketing to existing consenting subscribers. This would negatively impact personalization efforts and increase litigation risks. In addition, we emphasize that disclosure requirements, if adopted, should be carefully considered to avoid becoming ubiquitous and ineffective
For example, the EIA has filed a Petition for Expedited Declaratory Ruling and/or Waiver with the FCC to address the surge in frivolous litigation exploiting the TCPA’s “quiet hours” provision. We are urging the FCC to confirm that the “quiet hours” restriction does not apply when prior express written consent has been given. Similarly, we are seeking for clarification on the unworkable standard for determining a called party’s location for wireless devices. The FCC has accepted our petition and is seeking public comments.
Advocating Before State Legislatures
The EIA actively monitors and engages with state legislatures considering “mini-TCPA” and telemarketing laws. A few examples of our work:
- Virginia: We spearheaded the effort to amend the Virginia Telephone Privacy Protection Act (VTPPA) through the passage of Senate Bill 1339. This addressed loopholes and ambiguities that led to a surge in frivolous lawsuits against ecommerce businesses across the country. This victory demonstrates our ability to deliver tangible results for our members.
- Oregon: The EIA testified before the Oregon House Committee on Commerce and Consumer Protection regarding House Bill 3865. We raised concerns about unclear definitions, impractical requirements for text message marketing, and the potential for unintended consequences for small businesses.
- Michigan: We successfully advocated against the advancement of a problematic “mini-TCPA” bill (Senate Bill 1037) in the Michigan Senate. Specifically, its overly broad definitions, unworkable requirements, and potential for excessive litigation.
- New York: The EIA is closely tracking New York Senate Bill 859 (The Robocall Prevention Act). We have expressed concerns about its expanded scope, increased damages, and the potential for more litigation against ecommerce companies.
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