63 Pages Posted: 18 Sep 2013 Last revised: 18 Dec 2013
Date Written: September 17, 2013
In the late 1980’s, spurred on by advances in technology, the telemarketing industry began aggressively seeking out consumers in the hundreds of thousands. Companies began using machines that automatically dialed consumers and delivered prerecorded messages (“robocalls”). Marketers also took advantage of another new and increasingly available piece of technology known as the facsimile machine (“fax machine”). With the fax machine, marketers could now send tens of thousands of unsolicited advertisements (“junk fax”) each week to consumers across the nation.
Consumers and businesses became overwhelmed with unsolicited telemarketing calls and advertisements. Calls for action grew louder. States enacted laws, but could not reach the interstate practices of telemarketers. After reviewing and debating ten different pieces of legislation, Congress enacted the Telephone Consumer Protection Act of 1991 (“TCPA”).
The primary focus of this report is the Telephone Consumer Protection Act of 1991. The TCPA was born out of abusive telemarketing practices, made more intrusive by advances in technology. Originally, the TCPA imposed restrictions on the use of telephones for unsolicited advertising by telephone and fax. The TCPA has since been expanded and adapted by administrative rule, judicial interpretation, and congressional amendment.
The original purpose of the TCPA was to regulate certain uses of technology that are abusive, invasive, and potentially dangerous. The TCPA effectively regulates these abuses by prohibiting certain technologies altogether, rather than focusing specifically on the content of the messages being delivered. The expansion of the TCPA into areas outside of telemarketing and new technologies over the years is consistent with its original purpose.
Private parties are largely responsible for the enforcement of the TCPA, and have done so primarily through the class action mechanism. While this has drawn some criticism because of the provision of high statutory damages, the threat of class action has provided a significant deterrent to violators. Historically the government has only enforced the TCPA to a limited extent, yet the statute has been relatively successful in reducing the conduct it was enacted to regulate.
Technology is again rapidly changing and a number of trends are emerging. The number of entities that are operating in intentional disregard of the TCPA are growing, and they are using technology to help evade detection and enforcement. According to the FTC, about 59% of phone spam cannot be traced or blocked because the phone calls are routed through “a web of automatic dialers, caller ID spoofing and voice-over-Internet protocols.” Although the traditional scheme of TCPA enforcement, with its strong reliance on the private right of action, has been successful in the past, two main issues are becoming clear. The private right of action is limited in both incentivizing lawsuits against, and deterring the actions of, intentional violators; and FCC enforcement is limited by its slow process.
In order for the TCPA to stay relevant over twenty years later, certain modifications and improvements can be made. We recommend improving government enforcement efforts and increasing the uniformity of interpreting the statute. The FTC's recent contest for a technical solution to robocalls is commendable, and should be followed with respect to other types of media currently exposed to unsolicited commercial messages such as text messages and e-mail.
In order for the TCPA to continue to remain relevant going forward, this report recommends:
1. Increase government enforcement of the TCPA by providing State Attorney Generals with a larger incentive to bring TCPA cases, and empowering the FTC to bring suit under the TCPA;
2. Increase uniformity of application of the TCPA by encouraging more frequent and quicker FCC rule making procedures;
3. Continue to protect cell phones by requiring prior express consent for any communication (call or text) made to a cell phone;
4. Place a time limit on the Junk Fax Established Business Relationship;
5. Create incentives for fax broadcasting companies to determine whether the faxes they are sending on behalf of clients are in violation of the TCPA;
6. Rebuff efforts to remove or otherwise modify the private right of action; and
7. Place additional restrictions on entities that enable caller ID manipulation.
Keywords: TCPA, Telephone Consumer Protection Act, robocall, junk fax, do not call, FTC, FCC, caller ID, opt out, established business relationship, class action
JEL Classification: D11, D83, K1, K2, K4, L5
Suggested Citation: Suggested Citation
Heidtke, Daniel B. and Stewart, Jessica and Waller, Spencer Weber, The Telephone Consumer Protection Act of 1991: Adapting Consumer Protection to Changing Technology (September 17, 2013). Loyola University Chicago School of Law Research Paper No. 2013-016 . Available at SSRN: https://ssrn.com/abstract=2327266 or http://dx.doi.org/10.2139/ssrn.2327266