The Federal
Communications Commission (the “FCC”) recently released its Declaratory Ruling
and Order regarding the requirements of the Telephone Consumer Protection Act
of 1991 (the “TCPA”). The FCC Order provides
some good news for financial institutions, exempting certain automated calls to
cell phones and text messages from the prior express consent requirement. Here’s what you need to know:
Prior Express Consent Exemption:
Under the TCPA, the
general rule is that calls made with an automated telephone dialing system to
cell phones, automated messages to cell phones and text messages all require
the recipient’s prior express consent.
The FCC Order exempts from the consumer consent requirements certain
pro-consumer calls which are made about time sensitive financial matters so long as they are made free to the end
user and do not count against the recipient’s plan minutes or texts. Specifically,
the exemption applies to:
- Calls or texts for the purpose of notifying the customer of transactions and events that suggest a risk of fraud or identity theft.
Recognizing
that such situations require immediate attention and it may be damaging to the
customer if the financial institution is prohibited from contacting the
customer for lack of prior express consent, the FCC concluded that financial
institutions may call or text a customer’s cellular phone number to notify him
of possible fraudulent activity on his account.
- Call or texts for the purpose of notifying the customer of a possible breach of the security of the customer’s personal information.
Recognizing
the need for expediency in the event of a data breach, the FCC held that it is
in the best interest of consumers to receive immediate notification of such an
occurrence regardless of whether the consumer provided prior express consent.
- Calls or texts for the purpose of conveying measures consumers may take to prevent identity theft following a data breach.
When
a customer’s personal and financial account information is at risk following a
data breach, financial institutions seek to inform the customer of measures he
can take to prevent identity theft. Thus,
the FCC exempted such calls from the express consent requirement. The FCC, however, cautioned financial
institutions that informing a customer of an instance of identity theft or
measures to prevent identity theft does
not include marketing products a customer may use to prevent or remedy
identity theft.
- Calls or texts regarding actions needed to arrange for a receipt of pending money transfers.
Financial institutions want
to have the ability to notify the recipient of a money transfer of steps to be
taken in order to receive the transferred funds; however, money transfers must
often be delivered to individuals who do not have a relationship with the
transferring institution and therefore have not even had the opportunity to
consent to calls or text messages from the financial institution. Based on the fact that both the transferring
and receiving party have an interest in the details and status of the money
transfer, combined with the time-sensitive nature of money transfers, the FCC
granted the exemption to notifications regarding actions needed to arrange for
receipt of a money transfer.
Requirements for Exempted Calls
The FCC’s exemption is
not unfettered and financial institutions seeking to take advantage of the
exemption must comply with the limitations imposed by the FCC Order:
General Requirements:
- All calls and texts must be free to the end user and not count against the recipient’s plan minutes or texts.
- Calls and texts may only be sent to the wireless telephone number provided by the customer of the financial institution;
- Calls and texts are strictly limited to purposes specified above and must not include any telemarketing, cross-marketing, solicitation, or advertising content; and
- Calls for debt collection purposes still require prior express consent.
Frequency of Calls:
The FCC ruling provides
that a single financial institution may call or message a customer, who has not
given their prior express consent, no more than three (3) times over a
three-day (3) period. These limits apply
per event warranting the exempted calls, regardless of which exemption is
triggered. Any contact beyond the
limited number of three (3) calls or messages per event, over a three-day
period, is not exempt and requires the express consent of the consumer.
Opt-out
Requirements
Financial institutions
must include in their message a method for recipients to easily opt out of
future calls and messages. Voice calls
that could be answered by a live person must include an automated, interactive
voice and/or key press-activated opt-out mechanism that enables the call
recipient to make an opt-out request prior to terminating the call, voice calls
that could be answered by an answering machine or voice mail service must
include a toll-free number that the consumer can call to opt out of future
financial calls, text messages must inform recipients of the ability to opt out
by replying “STOP,” which will be the exclusive means by which consumers may
opt out of such messages
If the customer chooses
to opt out of future calls, the opt-out request should not opt the customer out
of receiving all financial calls for that account. As such, the financial institution should
customize the opt-out provision so that a customer is aware that a decision to
opt out of future calls from the financial institution is specific only to the
category of exemption referenced in that message or call. Financial
institutions are required to honor opt out requests immediately.
Call Content Requirements:
- Voice calls and text messages must state the name and contact information of the financial institution (for voice calls, these disclosures must occur at the beginning of the call); and
- Voice calls and text messages must be concise, generally one minute or less in length for voice calls (unless more time is needed to obtain customer responses or answer customer questions) and 160 characters or less in length for text messages.
The
FCC ruling provides much needed exemptions related to urgent financial matters, but caution should be used by financial institutions seeking to take advantage of the exemptions. First and foremost, financial institutions needs to keep in mind that this is not a blanket exemption. All calls and texts must be free to the end user and not count against the recipient's plan minutes or texts. The ability to use the exemption, therefore, will require financial institutions to work closely with wireless carriers and third party servicers to insure the messages and notices do not result in a charge to the recipient. Secondly, content and frequency of calls must likewise be closely monitored as the exemption will be tightly enforced. Failure to strictly comply, therefore could result in costly litigation.
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