Federal Communications Commission upends telemarking consent rules

Closing the Lead Generator Loophole

The FCC’s stated intent is to close “the lead generator loophole” for telemarketing robotexts and robocalls. The type of “abuses” the FCC is attempting to curb include TCPA disclosures allowing consumers to consent to contact from multiple “marketing partners” through a single consent. The number and/or identities of those telemarketing partners may only be apparent by visiting another website or reading fine print. The FCC found that the practice of obtaining blanket consent for numerous companies at a time amounts to a lead generator “loophole” that bad actors have exploited, much to the annoyance of the public. To curb such practices, the FCC clarified that a lead generator cannot simply hyperlink to a list of telemarketers to which the consent may apply, and a single prior express written consent to call or text a consumer cannot apply to multiple telemarketers.

Instead “texters and callers must obtain a consumer’s prior express written consent,” a requirement that “applies a single seller at a time, on the comparison shopping websites that often are the source of lead generation.” Order at 30. Moreover, the consent must be logically and topically related to the website through which a consumer provides the consent.

As amended, the regulations will state:

The term prior express written consent means an agreement, in writing, that bears the signature of the person called or texted that clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called or texted advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice. Calls and texts must be logically and topically associated with the interaction that prompted the consent and the agreement must identify the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered.

47 C.F.R. § 64.1200(f)(9) (amendments in italics).

The one-to-one consent rule drew a blistering dissent from Commissioner Nathan Simington, who warned that “the factual record on the question of 1-to-1 consent is so thin, and the Report and Order so impoverished in its reasoning supporting a rule upending the consumer financial products industry, that it gives every appearance of an arbitrary and capricious action by the Commission.” Although Commissioner Simington agreed with the rest of the Order (discussed below), which he described as “more-or-less well-trod regulatory territory that members of the Commission and staff are trained to understand,” he argued that the one-to-one consent rule was not well researched or considered, and went against the recommendation of the Small Business Administration. According to Commissioner Simington, a more appropriate approach to curb unwanted robocalls and robotexts could have been, for example, to limit “consumer consent to robotexting to only those entities ‘logically and topically related’ to the predicate of the consumer inquiry.” By adopting the one-to-one consent rule without consideration of a full record, Commissioner Simington warned, the FCC risks harming businesses that rely on lead generation and could risk a successful challenge to the Order in court.

Expanding Other Regulations

In addition to closing the so-called lead generator loophole, the FCC’s Order codifies that protections for numbers on the National Do Not Call (DNC) Registry extend to text messages, as well as calls. Order at 26. Thus, a company must obtain prior express consent prior to sending a marketing text to a number on the DNC Registry. The Order also “require[s] terminating providers to block all texts from a particular number or numbers when notified by the [FCC] Enforcement Bureau of illegal texts from that number or numbers.” Order at 16. Finally, the Order “encourage[s]” providers to make email-to-text an opt-in service, noting that email-to-text technology “enable[s] anyone to send a text message to a mobile subscriber in relative anonymity.” Order at 29.

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The one-to-one consent rule will be effective twelve months after publication of the Order in the Federal Register. Lead generators – and companies that use lead generators – will need to come into compliance by that deadline or risk significant liability risk under the TCPA. 

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