NADA REGULATORY ADVISORY: Congress Passes Junk Fax Prevention Act Curbing Compliance Burdens for Dealers

Congress recently passed the –Junk Fax Prevention Act of 2005” to overturn a 2003 FCC fax regulation which would have created tremendous compliance burdens for businesses and associations by requiring written consent prior to sending a commercial fax. NADA was part of a coalition that successfully backed the legislation, S. 714, and helped achieve a delay of the 2003 FCC regulations. (See WANADA Bulletin 27-05, July 7, 2005.) The new law became effective July 9, 2005 when signed by the president. It permits dealers and others to continue sending fax ads to their established business customers (unless prohibited under state law), while preserving a prohibition on junk-faxes, according to NADA. It is also beneficial to trade associations that will not have to send out a flood of consent requests to association members.

The American Society of Association Executives, where WANADA CEO Gerard Murphy serves on the public policy committee, also had an important role in passing this legislation.

NADA is sending a –Special Bulletin” and –Compliance Guidance” to all dealers to detail the major provisions of the commercial fax legislation now that the president has signed the legislation into law. Because of liability arising from the underlying statute and the current litigious climate, NADA has asked all state and metro dealer associations to remind dealers of the requirements of this new law. Although the law will require an education effort, the legislation is far preferable to the alternative of having to obtain written permission forms prior to faxing commercial messages.A brief explanation of the background of the 2003 regulation will also be included in the NADA package.

The Special Bulletin may also generate calls regarding state laws relating to unsolicited faxes. NADA wants to remind dealers that the new legislation does not preempt more restrictive state laws.

For your convenience, NADAês –Special Bulletin” and –Compliance Guidance” are enclosed with this WANADA Bulletin. More information is also available at www.nada.org, scroll down to Special Features and click on –New Regulatory Guidance for Dealers.”