New Fax Rules Take Effect August 25 Dealers Must Get Written Consent or Face Big Fines, Law Suits
As reported in the WANADA Bulletin, August 4, 2003, the Federal Trade Commission (FTC) recently revised its Telephone Consumer Protection Act (TCPA) rules about sending unsolicited fax advertisements. Effective August 25, 2003, the FTC will no longer recognize an established business relationship exception to the prohibition. Instead, senders of fax advertisements must obtain the recipientês written prior express permission before the transmission occurs.
Recipients of unsolicited fax advertising can sue the sender and receive an award of $500 per violation, which may be tripled in the event there is a finding that the violation was a willful or knowing violation of the law. Senders have been subjected to class action lawsuits claiming millions, and even billions, of dollars for alleged violations of the TCPA. Sending unsolicited fax advertising can lead to very expensive problems, warns WANADA kindred member attorney Michael Charapp of Charapp, Deese & Weiss, LLP.
Charapp points out that the new rule pertains to all unsolicited fax advertising of commercial material and, unfortunately, goes beyond faxes that are generally considered advertising. The rule defines an unsolicited advertisement as any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that personês prior express invitation or permission.
This definition is broad enough to pick up much of a dealership’s day-to-day fax activity such as a fax in response to a telephone request for a price quote, information about a vehicle or a service estimate. Even when a customer visits or calls and requests information a dealer cannot fax the requested information without the customerês prior signed consent, says Charapp.
Clearly, dealers who regularly fax information to their customers or prospective customers must change the way they do business, he adds. One way is to change from fax communications to e-mail communications, which are not governed by the new rule. However, recognizing the present limitations of e-mail and that one day there may very well be regulation of e-mails, dealers would be better advised to actually get signed consents from customers with whom they may want to communicate by facsimile.
Dealers may also want to change their credit applications or customer statements, repair orders, night drop envelopes, parts order forms and web pages to include a fax consent form. The form should contain a block or line for the customer to provide a fax number. The following language may be used above the customerês signature: By providing the fax number above, the undersigned agrees to receive facsimile communications and/or advertisements from the dealer.
In addition, after August 25, a dealer may not fax a form to a customer seeking the consent to send future faxes; presume consent from the fact that a customer has contacted it about a vehicle, parts, bodywork or mechanical service; or use a negative option which is a statement that the recipient will continue to receive advertisements unless the recipient specifically opts out of the senderês fax list.
Any fax sent with the signed consent of the recipient must identify in a bar along the top or bottom the senderês name, the date and time the advertisement is sent, and the telephone number of the sending fax machine.
The new rule establishes the standard for civil actions under the TCPA, actions that have become a major problem for businesses, including dealers, who are increasingly targeted by class action suits.
The TCPA is enforced by the FCC with potential civil penalties of up to $11,000 per violation. It may also be enforced by private actions in which a court can award a plaintiff $500 per alleged violation or up to $1,500 per alleged violation if the violation is found to be willful or knowing, with the potential for damages into the millions of dollars in class action litigation.
Charapp adds, While the effective date for all sections of the new regulation is somewhat unclear, given the August 25 effective date for at least some of the requirements, dealers are well advised to start complying with the new requirements by that date because of the private actions that may be filed to enforce the law.
NADA currently is preparing A Dealer Guide to Federal Telemarketing Restrictions to explain the myriad of federal telemarketing rules, exceptions and implementation dates that apply to dealers. Immediate information on the existing and revised restrictions is available on the web sites of the FCC (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-153A1.pdf) and the FTC (www.ftc.gov/bcp/conline/pubs/buspubs/calling.pdf).
WANADA is also one of 700 organizations that have joined a grassroots effort headed by the American Society of Association Executives (ASAE) seeking a stay and emergency clarification of the FCC’s new regulations on unsolicited faxes. ASAE is optimistic the FTC will grant a stay, but advises all member associations to prepare to comply with the new rules. Stay tuned.
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