Washington Restaurant Market Watch: Restaurants need clarity on telephone communication regulations

Washington Restaurant Market Watch: Restaurants need clarity on telephone communication regulations https://wahospitality.org/wp-content/uploads/2013/12/fccbuilding-605x198.jpg

By Paul Schlienz

Complying with the Federal Communication Commission’s (FCC) is about to get much more difficult.

Earlier in 2015, the National Restaurant Association joined with the US Chamber and other groups calling for the FCC to provide clarity on how the Telephone Consumer Protection Act (TCPA) treats the kind of non-telemarketing communications that restaurants and other businesses use to provide information to customers.

Unfortunately, in a public meeting on June 18, the FCC instead adopted a proposal that will make it harder for companies to comply with TCPA and easier for your company to be sued when using text messaging or informational phone calls.

“Given that compliance-minded organizations in a variety of sectors are being dragged into court and strongarmed into large settlements on an almost daily basis under the TCPA, for actions that do not remotely threaten the privacy interests that the statute was intended to protect, regulatory relief by the Commission is desperately required,” the letter stated.

While the final, official declaratory rulings from the FCC are still in process, here are the basics of the order: With regard to the scope of an automatic telephone dialing system, the FCC declined to provide a bright-line definition of “autodialer” except to clarify that rotary phones are not autodialers and that equipment used to send Internet-to-phone texts are autodialsers.

According to the FCC. consumers may revoke consent at any time through any reasonable means, including verbally. Previously, revocation of consent had to be written.

While a first informational call attempt to a reassigned number will not result in TCPA liability, all subsequent calls will, even if the caller does not have actual knowledge of the reassignment. In other words, the rules assume that a single call attempt (even if it is unanswered) is enough for callers to have “constructive knowledge” that the number has been reassigned.

The rules provide only very limited and specific exemptions for urgent circumstances. Free calls or texts that alert consumers to possible bank account fraud or reminders of important medication refills, among other financial alerts or healthcare messages, are allowed without prior consent under the rules. There is, however, no exemption for other financial or healthcare calls, including marketing or debt collection calls.

Consumers are allowed to opt-out of these permitted calls and text messages at any time.

“All of these rulings are problematic because they fail to distinguish between unwanted telemarketers and legitimate businesses trying to reach their customers,” said Blaine C. Kimrey, Lisa M. Simonetti, Bryan Clark and Charles J. Nerko in a National Law Review article. “As dissenting Commissioners Pai and O’Rielly noted, the regulations should provide some exception for ‘good faith efforts’ to comply with the TCPA. But so far the FCC has shown little interest in protecting the interests of legitimate businesses that could be faced with millions of dollars in damages—and perhaps even insolvency—as a result of highly technical TCPA claims brought by plaintiffs’ lawyers on behalf of plaintiffs who suffered little or no actual damage. As Commissioner Pai noted, ‘the primary beneficiaries will be trial lawyers, not the American public.’”

Hopefully, the courts will reject these rulings, holding that the FCC has exceeded its authority, in view of how fundamentally flawed they are. Unfortunately, however, for now, TCPA plaintiffs’ lawyers can rejoice while companies that market by phone, including many restaurants, should take cover.

“I am very interested to hear from [restaurants] who have been hit by TCPA lawsuits and are interested in learning more about potential legislative efforts to address these ongoing issues,” said Laura Chadwick, the National Restaurant Association’s director of commerce and entrepreneurship. “Please be in touch – and of course, please do not hesitate to send me questions or concerns.”

You can contact Laura Chadwick at (202) 973-3964 or lchadwick@restaurant.org.

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