For more than twenty years, the federal government has attempted to limit the number of unsolicited phone calls consumers receive through the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), which is perhaps best known for governing the famous “Do Not Call” list. Businesses, including banks and financial institutions, must understand the statute and stay abreast of its changes because the penalties for violating the TCPA are steep. In this article, we provide a brief overview of the TCPA, highlight recent developments, and illustrate why compliance with the TCPA is important.

Enacted in 1991, the TCPA prohibits or restricts a number of activities. The TCPA generally prohibits the use of automated calls or prerecorded messages and text messages to certain types of numbers, including, but not limited to, cellular phones, emergency phone numbers, medical facilities, and common radio carriers. In addition, the TCPA prohibits using an automated system to call two or more telephone lines simultaneously when the telephone lines are at the same business. The TCPA prohibits callers from providing false identification information to the recipient, whether verbally or through electronic transmission or a caller-identification. The TCPA further prohibits unsolicited advertisements from being sent to a facsimile machine unless certain exceptions are met. Previously, automated calls and prerecorded messages to landlines, cell phones, and facsimile machines could be made if there was an “established business relationship,” the caller had prior express consent, or the call was for an emergency purpose.

In addition to the above prohibitions, on October 16, 2013, new TCPA regulations went into effect. Among other changes, these new regulations state that prior express consent is now required even if the caller has an established business relationship and the prior express consent must be in writing.

Penalties for violating the regulations are hefty. For example, if a person receives more than one telephone call during a twelve month period in violation of the TCPA, the individual has a private cause of action against the caller. The person is entitled to recover actual damages for each violation or “up to $500 in damages for each such violation, whichever is greater.” The penalty may increase to $1,500 if the actions of the company making the call are determined to be “willful.” The person may also request that the company be enjoined from future violations.  In addition to a private cause of action, the TCPA permits both the federal and state authorities to pursue companies that violate the TCPA.

Compliance with the TCPA is important. Since 2011, more than half a dozen companies have faced class action lawsuits for alleged violations of the TCPA. These lawsuits have led to sizeable settlements ranging from $4 million to $47 million. If you have questions about how to comply with the TCPA or are facing a claim for TCPA violations, please consult an attorney.