FCC’S Year-End TCPA Orders Place New Limitations on Automated & Prerecorded Calls

Financial Services, Healthcare, and Technology sector clients — and any company that places non-marketing calls or text communications to customers by automated means — should pay close attention to two new FCC orders from year-end 2020. The orders place new restrictions and rules on how often companies can place certain types of communications to customers, and establish new opt-out requirements. If your business makes automated calls or texts to clients and potential clients about such things as appointment reminders, security threats or data breaches, payment reminders or similar messages, you should read this update.    

On December 30, 2020, the Federal Communications Commission (“FCC”) issued two orders, FCC 20-186 and FCC 20-187, to implement certain restrictions on existing exemptions to the provisions of the Telephone Consumer Protection Act (“TCPA”) relating to automated calls and text messages and certain calls to residential landlines — i.e., Sections 227(b)(1)(A)(iii) and (b)(1)(B) of the TCPA — and expand its efforts to allow telephone carriers to block what the FCC describes as “illegal robocalls.”  

Clients who make automated and prerecorded calls to communicate with consumers, even for non-marketing purposes, or utilize an automatic telephone dialing system (“ATDS”) to place calls to wireless numbers, should prioritize considering the implementation of a system to monitor the number of calls made under the TCPA exemptions to ensure compliance with new call number limits and opt-out requirements. In order to do so, clients will need to navigate several potentially conflicting aspects of the FCC’s new order (FCC 20-186) on automated and prerecorded calls, which imposes different requirements depending on the purpose of the call and whether the call is placed to a cellphone or residential landline. In many ways, the new restrictions represent a renewed concern for the privacy of callers reached in their homes — representing a shift in focus from recent efforts to provide protections to cellphone users.

Clients should also familiarize themselves with the FCC’s order (FCC 20-187) permitting carriers to block illegal robocalls pursuant to the TRACED Act. Under the new order, carriers must provide immediate notification and prompt dispute resolution so as to allow callers the opportunity to identify and respond on any calls that are wrongly blocked by call carriers.

KEY TAKEAWAYS

• Clients relying on the TCPA exemptions to place automated or prerecorded calls or texts will now be restricted in how many exempt calls they can make to consumers.
  
  • The frequency limitations depend on the particular exemption relied upon — the number of permissible calls may be different depending on the purpose of the call, and whether the phone number called is a landline or a cellphone.
    
    
  • The exemptions for wireless calls do not apply at all where the called party is charged for the call.
    
    
  • Obtaining the requisite prior consent is always best — clients who wish to call in excess of the frequency limitations may do so if they have consent from the called party, or if they use live agents to place the calls.
    
    
• Clients relying on the TCPA exemptions must implement appropriate opt-out mechanisms for consumers.
  
  • The opt-out requirements differ for calls to landlines and calls to cellphones.
    
    
  • Clients placing exempt calls to landlines must adopt sufficient internal do-not-call procedures that were previously required only for telemarketing calls.
    
    
  • Financial institution and healthcare provider clients placing exempt calls to cellphones must honor opt-out requests for such calls immediately.

BACKGROUND

The TCPA and its implementing regulations restrict certain calls to residential and wireless telephone numbers placed using certain technology without first obtaining the prior express consent of the called party. Under Sections 277(b)(2)(B) and (C) of the Act, the Commission is also authorized to issue (and has issued) certain exemptions to these restrictions, thereby permitting what would otherwise be restricted calls.

Section 227(b)(1)(B) of the TCPA prohibits initiating any telephone call to a “residential telephone line” with “an artificial or prerecorded voice” without the prior express consent of the called party. The FCC has exempted certain calls from this restriction, including calls:

(1) made for an emergency purpose;
(2) made for a non-commercial purpose; 
(3) made for a commercial purpose but which do not include or introduce an advertisement or constitute telemarketing; 
(4) made on behalf of a tax-exempt non-profit organization; and 
(5) to deliver a “health care message” subject to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).  

Courts have interpreted this “residential telephone line” provision — and, it follows, the corresponding exemptions — to apply to residential landlines only (and not cellphones).

Separately, Section 227(b)(1)(A)(iii) prohibits initiating any call to a telephone number “assigned to a . . . cellular telephone service” using “an automatic telephone dialing system” or “an artificial or prerecorded voice” without the prior express consent of the called party. The FCC previously has recognized exemptions to this prohibition for certain calls from (1) package delivery companies, (2) financial institutions, (3) inmate phone service providers, and (4) certain healthcare callers. Calls may only qualify for these exemptions, however, if they are not charged to the called party.

Last year, Congress passed Section 8 of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (the “TRACED Act”), requiring that, for any exemptions granted pursuant to Sections 227(b)(2)(B) and (C), the FCC must define requirements for who may make such calls, who may be called, and the number of such calls that a calling party may make to a particular called party.  

The FCC’s December 30, 2020 orders implement and expand upon the TRACED Act, codifying prior exemptions as compliance with Section 8 of the TRACED Act and setting forth new restrictions.  

SECTION 8 ORDER

FCC Order 20-186 (the “Section 8 Order”) takes steps to implement Section 8 of the TRACED Act by (1) codifying in its rules all existing exemptions for calls to wireless numbers, (2) amending previously-codified exemptions for calls made to residential telephone lines to satisfy the requirements of Section 8, and (3) adding new opt-out requirements for non-exempted calls. Calling parties will have at least six months to implement the new requirements after they are published in the Federal Register.

The FCC advises that callers who wish to place more artificial or prerecorded voice message calls than permitted by the Section 8 Order obtain prior express consent from the called party to receive additional calls. Alternatively, callers may forgo prerecorded messages and place additional calls (including to obtain consent) with a live agent. In that regard, the FCC’s Order reflects a preference for live calls over prerecorded ones, finding that “artificial and prerecorded voice calls are often a greater invasion of privacy than live calls because the call recipient cannot interact with the caller.”

Frequency of Exemptions for Calls to Cellphones

The FCC determined that its previously recognized exemptions to the Section 227(b)(1)(A)(iii) prohibition on calls to wireless telephone numbers from its 2015 order (30 FCC Rcd 7961), already comply with Section 8 of the TRACED Act. The Section 8 Order codified those exemptions but left their substance largely unchanged.   As confirmed by the Section 8 Order, callers need not obtain prior express consent before using an automatic telephone dialing system or an artificial or prerecorded voice to place the following types of calls to a wireless number:

• Package Delivery Calls  Exempted calls must be “made by a package delivery company to notify a consumer about a package delivery” and “sent only to the telephone number for the package recipient.” Callers may only send one notification per package, except that one additional notification may be sent for each attempt to deliver if the recipient’s signature is required and he or she was not available to sign for the package on the previous delivery attempt.
  
  
• Financial Institution Calls  Exempted calls must be made by a “financial institution” and “sent only to the wireless telephone number provided by the customer,” and only concerning (1) events that suggest a risk of fraud or identity theft, (2) possible data security breaches, including steps customers can take to prevent harm from such breaches, and (3) actions needed to arrange for receipt of pending money transfers. Callers may send no more than three messages per event over a three-day period for an affected account.
  
  
• Healthcare-Related Calls  Exempted calls must be made by or on behalf of “healthcare providers” and “sent only to the wireless telephone number provided by the patient,” and only concerning (1) appointment and exam confirmations and reminders, (2) wellness checkups, (3) hospital pre-registration instructions, (4) pre-operative instructions, (5) lab results, (6) post-discharge follow-up intended to prevent readmission, (7) prescription notifications, and (8) home healthcare instructions. Callers may initiate only one message per day to each patient, up to a maximum of three voice calls or text messages combined per week to each patient.

In adding these exemptions to a new subsection within the TCPA’s implementing regulations, 47 C.F.R. § 64.1200(a)(9), the FCC made clear that such calls are only exempt if the called person is not charged or if the call or message does not count against the called person’s cellphone plan limits on minutes or texts.  

Frequency of Exemptions for Calls to “Residential Lines”

Unlike wireless telephone numbers, there was previously no limit on the number of times a caller place exempted artificial or prerecorded voice calls to residential landlines without prior express consent. The Section 8 Order adds such limits, which the Commission states it will monitor to determine whether the call limits need adjustment.

For non-commercial calls, commercial non-telemarketing calls, and tax-exempt nonprofit calls, the Section 8 Order restricts callers to placing only three artificial or prerecorded voice calls within any consecutive 30-day period without prior express consent. For “health care messages” regulated by HIPPA, callers may place no more than one artificial or prerecorded voice call per day to each patient’s residential line, up to a maximum of three calls combined per week. The Section 8 Order does not restrict the number of “emergency calls” that can be placed.

Opt-Out Requirements

The Section 8 Order also amends opt-out requirements for exempted calls.

The TCPA’s implementing regulations previously required all artificial or prerecorded voice messages made for telemarketing purposes to both residential lines and wireless numbers to provide an automated, interactive voice- and/or key press-activated opt-out mechanism for the called person to make a do-not-call request. The Section 8 Order extends these opt-out requirements to not only telemarketing calls, but also to all exempted calls. Going forward, therefore, even a caller that places only non-commercial calls using a prerecorded voice message must now include the requisite opt-out mechanism in each such call. The FCC notes that this “opt out mechanism” requirement does not apply to “those artificial or prerecorded voice message calls that are made . . . with the prior express consent of the called party because such calls are not made pursuant to an exemption adopted under section 227(b)(2)(B).”

Further, the wireless call exemptions include a new requirement that exempted text messages must inform recipients of the ability to opt out by replying “STOP.” For exempt financial institution and healthcare providers, a “STOP” text will be the exclusive means by which consumers may opt out of such messages. The amendments do not require that callers treat a “STOP” message as the “exclusive means” to opt out of any non-exempt calls, however.  

Prerequisites to Placing Exempted Non-Telemarketing Calls to Landlines

The TCPA’s implementing regulations prohibit making any telemarketing calls to residential landlines or cellphones without first implementing adequate procedures for maintaining and honoring an internal do-not-call list pursuant to 47 C.F.R. § 64.1200(d). For example, callers must record do-not-call requests “at the time the request is made,” and honor such requests “within a reasonable time” not to exceed 30 days. These requirements previously applied only to telemarketing calls, including the exempted classes of calls. The Section 8 Order amends Section 64.1200(d) to extend these requirements to exempted calls to residential landlines only.  

While the FCC has not required that callers relying on the wireless number exemptions comply with all requirements of Section 64.1200(d), it does demand that for exempted financial institution and healthcare provider calls to wireless numbers, the Section 8 Order requires that callers “honor opt-out requests immediately.” Conversely, exempted package delivery callers must honor opt out requests “within a reasonable time from the date such request is made, not to exceed 30 days.”

These disparate requirements reflect that the FCC is primarily concerned with the reported annoyance and aggravation of potentially unwanted calls to homes — this renewed concern may in part be spurred by the ongoing coronavirus pandemic. As the FCC noted, “[i]nterruptions caused by artificial and prerecorded voice messages are especially concerning during the current COVID-19 pandemic when many people are working from home and many children are participating in remote instruction from home.”  

Callers who previously made telemarketing calls subject to Section 64.1200(d) may be able to rely on much of their existing do-not-call training and infrastructure to ensure compliance as to exempt calls, whereas non-telemarketers (such as healthcare providers) likely will need to develop and implement such procedures in the coming months.

CALL BLOCKING ORDER

FCC Order 20-187 (the “Call Blocking Order”) will expand upon the TRACED Act by:

• Requiring all voice service providers to take affirmative steps to stop illegal traffic on their networks and assist the Commission and law enforcement in tracking down callers that make such calls.
  
  
• Expanding the FCC’s existing call blocking safe harbor based on reasonable analytics to cover network-based blocking under certain circumstances. A terminating voice service provider must ensure its network-based blocking targets only calls highly likely to be illegal, not simply unwanted.
  
  
• Adopting rulings to provide greater transparency and ensure that callers and consumers can better identify blocked calls and ensure those that are wanted are un-blocked.
  
  
• Broadening the FCC’s point-of-contact requirement to cover caller ID authentication concerns under section 4(c)(1)(C) of the TRACED Act.

The Call Blocking Order seeks to enhance transparency and redress requirements for when a voice service provider erroneously blocks a party’s call. For callers who believe their calls have been erroneously blocked, the Commission outlines the following dispute resolution process:

1. Immediate Notification  By January 1, 2022, terminating voice service providers that block calls must immediately notify calling parties of such blocking and use specific, existing codes when blocking calls.
   
   
2. Blocked Calls List  Terminating voice service providers that block calls on an opt-in or opt-out basis must provide, on the request of the consumer-subscriber to a particular number, a list of all calls intended for that number that the voice service provider or its designee has blocked.
   
   
3. 24-Hour Dispute Resolution  All voice service providers must respond to blocking disputes they receive through their established point of contact by providing a status update to the party that filed the dispute within 24 hours.

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