August 10, 2018 at 5:00 am ET
Some government rules do not make sense in 2018. Thankfully, efforts by the Trump administration and Congress to update laws, reform thresholds and make technical changes to rules are ongoing because many fixes need to be made.
This is especially critical for small businesses, especially when misguided government rules erect barriers to effective customer communications. The Telephone Consumer Protection Act is one such statute in need of serious reform. It impedes customer communications and service and is harming small businesses across numerous sectors of the economy.
This federal telemarketing law was enacted in 1991, and in recent years has become a hotbed for litigation. In June 2017, testimony before a House Judiciary Committee hearing on lawsuit abuse and TCPA, Adonis E. Hoffman, former chief of staff and senior legal advisor to Federal Communications Commissioner Mignon Clyburn from 2013-2015, observed:
“The law has become the second most popular vehicle for class action lawyers to reap millions in the name of consumer protection. As an attorney, a consumer and a citizen, this really bothers me because it is a bastardization of the public interest and a travesty to our legal system. As a matter of equity, it just seems to be plain wrong.”
Entrepreneurs and small business owners agree.
Let’s be clear, illegal robocalls are a big problem. Regulations need to effectively target the activity and deal with the abuse. But the law needs to draw a clear distinction between the actions of bad guys and the legitimate calls and texts sent by companies that are communicating in good faith with their customers. Effective TCPA reform would make that distinction by fixing the vague and outdated framework that is fueling lawsuits and bleeding big settlements from innocent businesses.
As noted by Hoffman in his testimony, TCPA is strict and “unforgiving.” Even if a business misdials a number, or dials a reassigned number that was previously used by someone else, each violation entitles the person on the receiving end to file a lawsuit and seek damages of $500 to $1,500 per unsolicited call, text or fax per person.
These non-marketing calls can be notifications about potential fraud, or reminders about appointments, due dates and other customer-service courtesies. Yet the threat of TPCA litigation is chilling this activity, which is troublesome for customers who count on prompt outreach from a business about their accounts or information pertaining to important matters, such as medical appointments and even life-saving information.
An insidious cottage industry of plaintiffs’ lawyers and professional TCPA plaintiffs are making a very nice living off this ambiguous and outdated law. According to litigation analyst WebRecon LLC, TCPA lawsuits have increased by 1,272 percent since 2010. In 2008, there were 16 plaintiffs nationwide that filed TCPA claims in federal court. That number grew to 1,136 plaintiffs in 2012. By 2016, there were 4,860 claims in federal court.
About 100,000 telephone numbers are reassigned by mobile carriers every day, and this large amount means that companies risk triggering a TCPA lawsuit if they happen to call or text the wrong party about important or time-sensitive information.
Thankfully, steps are being taken by the FCC to fully review and modernize the TCPA. Comments are being collected on key issues such as the definition of an “auto-dialer,” how the FCC should treat reassigned numbers under the TCPA, and how a called party may revoke prior express consent to receive robocalls.
Hopefully this will serve to inform the FCC about changes that are needed to lift uncertainties that inhibit the delivery of important communications by small businesses to their customers on their mobile devices.
For example, defining an “automatic telephone dialing system” too broadly may still limit the ability of small firms to communicate with customers through their mobile devices. The perpetuation of blurred TCPA language would keep small businesses in the crosshairs of the professional plaintiffs, and deprive entrepreneurs of an important tool that helps them maintain customers in a competitive economy. After all, does it make any sense that legitimate businesses would want to harass customers through unwanted phone calls and texts when that customer can easily bring their business to a competitor?
Small businesses need every tool possible to help them find and keep good customers. Communications is critical to that end and removing government-imposed barriers that prevent customers from receiving messages that they want via their mobile phones is a win for small businesses and customers alike.
Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.
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