Over the past couple of months, there has been a lot of discussion around the Telephone Consumer Protection Act (TCPA). While many organizations are very familiar with the TCPA, the volume of cases and interpretations of the requirements make it challenging to understand and ensure compliance.
At Journey Summit 2017, we brought together a panel of experts to help address that during the session on How to Navigate Through the New TCPA Changes. Moderated by Marty Collins, SVP, Corporate Development, Legal & Compliance, at Quinstreet, this panel featured experts from across industries including Deborah Solomor, Vice-President, Deputy General Counsel, Litigation, Chief Compliance Officer at Career Education Corporation, Terance Gonsalves, Partner at Steptoe & Johnson, and Rebecca Blabolil, Chief Compliance Officer, Guaranteed Rate.
Here are some of the key theme and topics covered during the session:
TCPA Compliance Risk is Real
While many carries and brands have developed a focus on ensuring that they are compliant with the TCPA, some organizations seemed to think that if they were not using autodialers that they did not need to worry about it. It seemed like many people had some inaccurate ideas regarding the requirements of the TCPA and just how real the threat of related litigation is.
So how real is it? It is very real. In a recent study by the US Chamber Institute for Legal Reform, they noted that between July of 2015 and the end of 2016, the number of TCPA related legal cases has grown more than 46%. And that statistic does not include arbitration or demand letters, which are very common, so, the risk of litigation, damages or penalties related to the TCPA is real and growing.
As the study also shows, the number of industries being targeted for litigation is also growing. TCPA compliance risk is not just an issue for one or two industries, but across every industry that engages with consumers via phone calls, texts and faxes. While industries such as mortgage, consumer lending and banking, insurance and financial services have been heavily targeted for TCPA litigation, other industries such as higher education, home services and solar, and automotive are also seeing an increased number of cases, and large settlement costs.
TCPA Compliance Includes Phone Calls, Texts and Faxes
The TCPA requires that organizations obtain and be able to provide persuasive proof that consumers have given consent before you contact them. Regardless of whether you do so via phone, text or fax. And that is not just for new customers. Recent cases involving the servicing of existing customers have recently emerged.
As a result, organizations need to ensure that consumer consent language and disclosures include all methods that will be used to communicate with consumers and ensure that only the phone number(s) provided are used for those communications. In addition, organizations need to ensure that they maintain and update their records to ensure that as phone numbers change hands or consumer revoke consent, that they are no longer being used.
In addition, making sure that the placement of disclosures and consent language is clear and conspicuous is very important. It was noted during the discussion, that the placement of consent language and opt-in buttons could mean the difference between compliance and non-compliance. So, marketing teams need to work together with their compliance teams to ensure that consent language is not only comprehensive, but prominent and clearly placed to ensure that consumers are fully aware of what they are giving consent to.
The Potential Cost of Non-compliance
The cost of non-compliance and TCPA-related litigation, arbitration and demand letters can be very costly. While cases and fees vary, just preparing for and taking a case to court can cost hundreds of thousands of dollars.
That does not take into account the internal and opportunity costs when staff are diverted from their normal functions to participate in these responses and defense. This also does not include potential cost of offsetting bad press and negative consumer sentiment which may result from any litigation, win or lose. And as recent cases have shown, if a class action suit is brought and your organization is found liable for damages and non-compliance, the penalty could be in the hundreds of millions of dollars.
While damages awarded to consumers can start at between $500 and $1,500 per non-compliance call or text, additional damages and penalties can be accessed at the judge’s discretion. So, the ability to not only have proof that consumers have given consent, but provide proof quickly and in a format which can be easily accessed and understood, is key to warding off potential litigation and winning, should you have to defend yourself in court.
Mitigating Risk Is Good Business
Addressing and mitigating TCPA compliance risk, makes business sense. But at the end of the day it is not just about mitigating risk. For leading brands, this should be part of their best practices for improving the consumer experience, ensuring that they are engaging with consumers how and when they want to be contacted.
Understanding how consumers want to be contacted can be an indicator of intent as well. So, data collected in the name of compliance, can also be applied to optimize lead acquisition, routing and prioritization. Providing a measurable ROI which can make addressing compliance a benefit, rather than simply a cost center.
Interpretations of the TCPA Continue to Evolve.
As discussed in a previous blog, the requirements for compliance with the TCPA continue to evolve. While legislators and regulators debate changes and enforcement at the federal level, judges and case law offer new interpretations on a weekly and, sometimes, daily basis. So, having an ongoing dialog with your legal, marketing and sales teams both internally and in the field, is very important.
In the end, as our experts noted, compliance is not about putting limits on marketing and business, it is about providing safeguards to limit risk and potential penalties. So, having the right strategy, collaboration and solutions can help mitigate TCPA compliance risk, and potentially avoid litigation.