August 1, 2018 at 5:00 am ET
Everyone hates telemarketer calls. Even if we’re on the Do Not Call List, many of us can expect at least one scam call each day. This has become part of everyday American life.
While scam calls are a problem, however, legitimate telemarketing campaigns play an important role in our economy. They provide marketing avenues that allow companies to target campaigns to their customers and corporate telemarketing centers to subsidize the cost of modern telecommunications systems. Without marketing calls, many innovative products would fail and the cost of landline and cellular service would increase.
Plaintiff’s lawyers, however, have used judicial activism and regulatory overreach to abuse our legal system where even those who are using the system lawfully still may be exposing themselves to liability. This occurs because the Telecommunications Consumer Protection Act of 1991 was written in the infancy of the modern telecommunication system. The TCPA was a response to the abuses of the system that had arisen in the late 1980s and the early 1990s. The act dealt harshly with offenders to create an effective deterrent for telecommunications industry.
The telecommunications industry has since evolved well beyond what 1980s science fiction movies could have predicted. The legal system surrounding telecommunications has not kept pace. While there were amendments to the TCPA in 1999 and 2014-2015, developments in the legislative arena have moved at the pace of government, which is to say they have not changed much. This leaves companies and associations trying to work in the modern telecommunications arena with a legal framework basically out of the 1980’s. This puts American companies at risk, presents dangers to the American consumer and gives lawyers and legal associations a system where they can take advantage of companies and people who are trying to work lawfully in the system. This is the perfect storm of legislative failure; the inability of the federal government to regulate itself out of a problem that it created.
One of the greatest costs of this system is the class-action attacks it facilitates against legitimate companies. We are not talking about “scams” that are borderline legitimate because someone has found a technicality. We are talking about companies that have legitimate reasons to call people, with an auto caller, so that they can interact with customers and potential customers within the law. Examples include:
Businesses that have permission to call a number, then the owner of a number changes. Sometimes a number is on the “do not call” list but the owner sells or loses control of the number. The number then is taken over by another owner. Companies that have permission to call the original owner may find themselves in an actionable position when the owner changes hands. Therefore, effectively calling a wrong number can cost a business $1,000 per instance;
Class actions against small business. The worst abuse is when legal teams “manufacture” a class action suit by seeking out people who did not know that they had been “offended.” As a result, small companies are brought into cases which can be devastating as compliance with the regulatory committees and case law is often contradictory and varies by jurisdiction. Small companies cannot keep up with non-legislated changes to the regulatory environment, let alone the changes that are created by activist courts and judges.
Business that have permission to call, but that permission was revoked by the customer on short notice and has not been entered into the system. Companies are generally pretty good at taking people off their calling list assuming people actually make the request. When a company calls millions of people a day, it may take a day or two to remove people from their list. Since a “do not call” is entered as a “non-call” generally the computer system will continue to call that number until it is removed from the system. This can result in people being called after they have requested to be removed, which in turn can expose a company in the process of complying with the law to fall awry of the legal system.
Congress must step in. The TCPA is due for a major modernization specifically addressing the ability of companies to contact clients and potential clients who are not on a do-not-call list, and maintain contact with clients without worrying about the “cell-phone shuffle” of modern telecommunications.
Companies also need liability protection in several circumstances. One is from mistakes associated with “one-day” numbers. ISPs also should not be held accountable for phone number cloning and Digital Network Protection systems within their networks. Finally, class action tort reform is necessary to prevent law firms from aggressively seeking out class members who were not “harmed.”
Congress must reform the TCPA to protect business and customers alike. Businesses legitimately contacting clients in the course of business should not be subject to the abuse of expensive and wasteful lawsuits that make trial lawyers rich and do nothing to help consumers. The system needs to be fixed.
Dr. Christopher W. Smithmyer, LLM, is a certified mediator specializing in telemarketing cases and a freelance writer who serves as the strategic resource development consultant with Brāv, an online platform to manage conflicts.
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.