Legislative Changes Proposed for Robocall Restrictions

On September 22, Reps. Lee Terry (R-Neb.) and Edolphus Towns (D-N.Y.) introduced legislation that would modernize the Telephone Consumer Protection Act (TCPA) of 1991 to allow for the delivery of time-sensitive consumer information to mobile phones, while still protecting consumers from unwanted telemarketing calls.

The Mobile Informational Call Act of 2011 (H.R. 3035) would exempt informational calls from the restrictions that prevent businesses or organizations from using auto-dialers and prerecorded voice calls to reach consumers on their mobile phones. The types of calls that would be allowed under the new legislation include the following:

• suspicious credit card activity;
• flight cancellations;
• appointment reminders;
• service outages and restorations; and
• past due payments.

Under the proposed changes, telemarketers would still be required to get written consent prior to contacting a consumer on his mobile phone. That, according to Charles Isom, a spokesman for Terry, is an important part of the legislation. "The customer still has to have previously given consent to the company for that kind of outreach," he says. "How the company gets that [consent] could vary…but it still has to get it."

The bill, as proposed in the House Energy and Commerce Committee, of which both Terry and Towns are members, seeks to amend the TCPA, enacted in 1991 as an update to the Communications Act of 1934. The TCPA restricted the use of auto-dialers, artificial or prerecorded voice messages, text messages, and fax machines to send unsolicited advertisements.

Isom says the new bill is "updating the laws to reflect the reality of the day."

Other parts of the TCPA will remain unchanged. Solicitors will still be banned from placing calls before 8 a.m. or after 9 p.m. local time; still need to maintain "Do Not Call" lists, which they must honor for five years; and still must provide their names, the names of the people or entities on whose behalf the calls are being made, and the telephone numbers or addresses at which those people or entities can be contacted. Unsolicited advertising faxes are still prohibited, and, in the event of a violation of the TCPA, individuals are entitled to collect damages directly from the solicitor for $500 to $1,500 for each violation, or recover actual monetary loss, whichever is higher.

Within days after the bill's introduction, its supporters and opponents were already voicing strong opinions. Supporters include utility companies, banking associations, loan providers and servicing companies, and the U.S. Chamber of Commerce. Opponents include a number of consumer privacy groups and consumer advocates, such as the CEO and founder of the National Political Do Not Call Registry, Shaun Dakin.

Dakin created a Web page where consumers could register their opposition to the bill and contact members of Congress. In one day, he mobilized more than 3,000 people through the site, which he promoted on Twitter.

Advocates like Dakin are concerned that the bill would open a new avenue for telemarketers, who were banned by the Federal Trade Commission in 2009 from robocalling cell phones and subjected to high fines if they did so.

Of particular concern to privacy advocates is that under the proposed bill, debt collection agencies would be allowed to contact customers with automated calls on their cell phones. These calls are the source of more complaints to the FTC than any other.

Proponents, however, argue that current cell phone regulations have not kept pace with technology, and hope to gain greater access to the 40 percent of consumers who use cell phones as their primary or sole means of communication.

The TCPA restrictions "tied the hands of these people who wanted information," Isom says.

Bill supporters argue that current FTC regulations regarding autodialing were passed when most cell phone customers also had landlines and many paid a high price-per-minute for incoming calls. The new regulation takes into account that most mobile users today have flat-rate plans, so the cost burden of autodialing would be less for the consumer.

SoundBite Communications, which provides cloud-based, multichannel proactive customer communications, has announced its support for the bill.

"Current regulations are out of step with an increasingly mobile consumer base," said John Tallarico, vice president of product management at SoundBite, in an email. "We strongly urge individuals and consumer advocacy groups to recognize that the intent of this amendment is to improve the delivery of timely, relevant information to consumers while continuing to protect wireless consumers from unwanted telemarketing calls."

Tallarico also noted that in mid-September, President Barack Obama included a provision in his economic growth and deficit reduction plan that would allow government agencies to contact consumers on their cell phones for the purpose of debt collection.