TCPA Laws at the State Level: What You Need To Know

A Q&A with Michele Shuster, Managing Partner at Mac Murray & Shuster LLP

The Telephone Consumer Protection Act (TCPA), first signed into law in 1991, is a federal act regulating the telemarketing industry. The TCPA includes regulation of autodialed phone calls, those that use pre-recorded or artificial voices, as well as communications made via texts and faxes. It includes the National Do-Not-Call Registry, and it is enforced by the Federal Communications Commission (FCC). In addition to penalties that may be levied by the FCC, a private right of action for actual damages and/or statutory damages of up to $1500 creates significant risks for callers. Importantly, the TCPA does not preempt state laws.

Most businesses utilizing telephone marketing on any scale will be familiar with the TCPA, but lately, greater enforcement has been occurring on the state level as a result of the case Facebook v. Duguid, in which the Supreme Court narrowly defined what constitutes an automatic telephone dialing system. Until the Facebook decision, state laws generally took a backseat to the TCPA. But in its wake, states have begun to revive and amend their own laws now that the TCPA has reduced application. It is critical for businesses to monitor both TCPA and state law actions, particularly over the next 12-18 months, to minimize the risk associated with outbound campaigns.

Read on to learn more about this important topic in this Q&A with Michele Shuster, former consumer protection regulator and M&S Managing Partner.

Why do companies need to worry specifically about state-level TCPA-like laws if they are already compliant with the TCPA?

Good question. Compliance with state laws is increasingly important thanks to the Supreme Court’s recent decision in a case called Facebook v. Duguid, which minimized the reach of the national law. While a lot of companies expected that restrictions on calling would loosen as a result of this decision, states have actually begun to step up with stiffer enforcement and regulations.

If these calling laws differ from state to state, can you give us some examples of states with more restrictive laws in place? 

Florida comes to mind as one of the most restrictive, as they amended their regulations in July 2021. They set forth provisions that we don’t see in the TCPA and also don’t see in a lot of other state provisions. For example, they changed allowable calling hours so that telephone solicitation calls may only be made from 8 am-8 pm, put a three-call limit on the number of calls that can be made to one number in a 24-hour period, and instituted caller ID regulations, such as prohibiting a caller from preventing their name and number to be transmitted to the called party.

Florida also restricts callers from using, without prior express written consent, an automated system for the selection or dialing of telephone numbers or the playing of a recorded message when a connection is completed. Similar to the TCPA, Florida now grants a private right of action to recover the greater of actual damages or statutory damages of up to $1500 per violation. While Florida is the most prominent example at the moment of state telemarketing regulation, many other states have varying requirements.

How do companies that rely on calling as part of their business deal with increasing regulation? Do they have to have separate calling campaigns on a state-by-state basis? 

This really varies by company. Some will limit their entire effort to meet the restrictions set forth by the most strictly regulated state, while others will segment their efforts on a state-by-state basis. Either way, it’s critically important that companies utilizing calling campaigns stay up to date on regulations and understand individual state laws, which can change frequently and are often put into practice on extremely rapid timelines.

What are the penalties for unlawful calling? How do they differ from the federal to state level? 

The penalties are serious, and they differ not only from state to federal, but also from state to state. The important thing to know is that penalties are enforced on a per-call basis, meaning that penalties and private litigant damages can snowball quickly. Also, if a company is found to have violated the TCPA and state laws, it can face penalties and damages under both frameworks. Take an example of a hypothetical company that makes a modest 5,000 calls per day. If it violates both the TCPA’s prohibition on calling using an automatic telephone dialing system without proper consent and Florida’s similar prohibition, it could face up to $15,000,000 in potential private litigant damages from just that one day of calling. And that isn’t even counting the potential penalties imposed by regulators. Some states even have criminal penalties for certain violations.

What role do the telephone carriers play in managing calls, both legal and illegal? 

In 2020, Congress passed the TRACED Act, which said that all voice service providers (aka carriers) need to implement a call authentication protocol called STIR/SHAKEN.

Through STIR/SHAKEN, an “attestation level” is assigned by the originating voice service provider to all IP-based telephone calls, from A to C. An A-level attestation means the originating voice service provider knows who the caller is and that they have the right to make the call using the caller ID info presented. In this case, the call is the most likely, though not guaranteed, to go through. A B-level attestation means the originating voice service provider knows who the caller is but does not know if the caller has the right to make the call using that caller ID. A C-level attestation means the originating voice service provider is the point of entry to the IP-based telephone network but doesn’t know anything about the call. In other words, the originating voice service provider just acts as a “gateway” to the network. C-level calls have a high probability of being blocked by the terminating voice service providers, keeping them from reaching the consumer.

This is a really important point for businesses engaging in telemarketing efforts. It’s worth the time to work with your voice service provider to get that A-level attestation and ensure your caller ID and other credentials are in place, or else you’re likely spending money and time on calls that may never even reach your intended audience. Additionally, having those credentials in place will lead to more connected calls, and more sales. Telemarketing is not illegal, and it can be a very effective sales tool for businesses, but it must be done right.

To ensure my clients are staying on the right side of the regulations and that their attestations are in place, I often seed the call list so that I can actually see how the calls are coming through (and if they are). I highly recommend businesses do this to avoid wasting money and potentially incurring costly penalties.

How can businesses stay on top of constantly changing regulations like these? 

Many firms, including ours, offer legislative monitoring services. These services keep track of changes to regulations on both the federal and the state level. Because the laws change fast, and often give businesses fewer than 30 days to implement changes to practices, having experienced advisors on your team is really necessary.

Still have questions about the TCPA or your calling campaigns? We’re here to help! Contact us at compliance@mslawgroup.com.