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Unsolicited JUNK FAXES


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* I confirm that I do not have an established business relationship with the advertiser and that I have not expressly consented or permitted the advertiser to send me the attached fax advertisement.

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What is the TCPA?

A copy of the statute is here.  A copy of the FCC regulations is here.

The Federal TCPA Statute (Telephone Consumer Protection Act). In an effort to address a growing number of telephone marketing calls, Congress enacted in 1991 the Telephone Consumer Protection Act (TCPA). The TCPA restricts the making of telemarketing calls and the use of automatic telephone dialing systems and artificial or prerecorded voice messages. The rules apply to common carriers as well as to other marketers. In 1992, the Commission adopted rules to implement the TCPA.
The TCPA specifically bans the transmission of unsolicited advertisements to telephone facsimile machines.
By law, each fax transmission must have a header or footer that clearly states the caller's name, telephone number and the date and time of transmission. All fax machines manufactured after 12-20-92 must have the capacity to print this information on either the first page or, preferably, every page of the transmission. Again, the company or person on whose behalf the fax has been sent is ultimately responsible for compliance.

Under the Junk Fax Prevention Act of 2005, the sender of an unsolicited advertisement sent to a person's fax machine is still liable for a minimum of $500 per page, and damages may also be trebled at the court's discretion upon a finding that the violation was willful or knowing. A "willful" violation is simply one that is "volitional", while a "knowing" violation is one that occurs when the sender merely knew "or should have known" that he was sending a fax even without specific knowledge of the law.
The statute is one of strict liability; even if one sends an unsolicited advertisement by fax by accident, minimum liability of $500 per page attaches. The only real defense for the sender is that the transmission was protected by the EBR exception created by the Junk Fax Prevention Act of 2005 and contains a complete and valid opt-out provision. To qualify the sender:

Must already have an EBR with the recipient;
Must have received the recipient's fax number voluntarily from the recipient in the context of the EBR; and
A notice on the first page of the unsolicited advertisement that instructs the recipient how to request that they not receive future unsolicited facsimile advertisement. 21 FCC Rcd 3787, 3800 (FCC 2006); and
A domestic contact telephone number to opt out. 21 FCC Rcd 3787, 3800 (FCC 2006); and
A facsimile machine number to opt out. 21 FCC Rcd 3787, 3800 (FCC 2006); and
At least one cost-free mechanism for transmitting an opt-out request. 21 FCC Rcd 3787, 3800 (FCC 2006); and
It must be available 24 hours a day, 7 days a week. 21 FCC Rcd 3787, 3818 (FCC 2006); and
The notice must be clear and conspicuous and on the first page of the advertisement (21 FCC Rcd 3787, 3801 (FCC 2006); and

The notice must be distinguishable from the advertising material through, for example, use of bolding, italics, different font, or the like. 21 FCC Rcd 3787, 3801 (FCC 2006); and

It cannot be in the form of a "negative option. A facsimile advertisement containing a telephone number and an instruction to call if the recipient no longer wishes to receive such faxes, would constitute a "negative option" as the sender presumes consent unless advised otherwise. 21 FCC Rcd 3787, 3811 (FCC 2006); and
the sender must honor all opt-out requests within a reasonable period of time (not to exceed thirty days).
Failure to comply with all of these requirements leaves the sender liable for a violation of the statute, and unable to claim protection under this exception. See Par. 8(C)(iii).

To understand the revised rules, you must first understand the meaning of the terms “unsolicited advertisement” and “established business relationship.” As defined in FCC rules, an “unsolicited advertisement” is “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.”
Also as defined in FCC rules, an “established business relationship” or EBR is “a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a business or residential subscriber with or without an exchange of consideration [payment], on the basis of an inquiry, application, purchase or transaction by the business or residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.”
Amended Fax Rules and Established Business Relationship Exemption
The rules provide that it is unlawful to send unsolicited advertisements to any fax machine, including those at both businesses and residences, without the recipient’s prior express invitation or permission. Fax advertisements, however, may be sent to recipients with whom the sender has an EBR, as long as the fax number was provided voluntarily by the recipient. Specifically, a fax advertisement may be sent to an EBR customer if the fax has complete and valid opt-out provision and if the sender also:
•obtains the fax number directly from the recipient, through, for example, an application, contact information form, or membership renewal form; or
•obtains the fax number from the recipient’s own directory, advertisement, or site on the Internet, unless the recipient has noted on such materials that it does not accept unsolicited advertisements at the fax number in question; or
•has taken reasonable steps to verify that the recipient consented to have the number listed, if obtained from a directory or other source of information compiled by a third party.
If the sender had an EBR with the recipient and possessed the recipient’s fax number before July 9, 2005 (the date the Junk Fax Prevention Act became law), the sender may send the fax advertisements without demonstrating how the number was obtained.

Opt-out Notice Requirements
Senders of permissible fax advertisements (those sent under an EBR or with the recipient’s prior express permission) must provide notice and contact information on the fax that allows recipients to “opt-out” of future faxes. The notice must:•be clear and conspicuous and on the first page of the advertisement;
•state that the recipient may make a request to the sender not to send any future faxes and that failure to comply with the request within 30 days is unlawful; and
•include a telephone number, AND fax number, and cost-free mechanism (including a toll-free telephone number, local number for local recipients, toll-free fax number, Web site address, or e-mail address) to opt-out of faxes. These numbers and cost-free mechanism must permit consumers to make opt-out requests 24 hours a day, seven days a week.

Spinning Junk Faxes into Bars of Gold...or Pigs of Lead
by Ray Horak

In an effort to address a growing number of telephone marketing calls and certain other telemarketing practices thought to be invasions of privacy, Congress enacted the Telephone Consumer Protection Act of 1991 (TCPA), codified at 47 U.S.C. § 227. We all know about the restrictions on unsolicited telemarketing calls to consumers and the national do-not-call list that effectively ended those annoyances…or opportunities, depending on your perspective. Many of us also are aware that, with some enumerated exceptions, the TCPA made it unlawful “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement unless….” The TCPA defined a telephone facsimile machine to “mean equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to transmit that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper.” This very specific language was later broadened in FCC regulations which themselves were codified in 2003 at 47 CFR Parts 64 and 68. 
These FCC rules added personal computers equipped with fax modems and fax servers to the list of devices covered by the law, but specifically exempted “fax sent as email over the Internet.” There also is an exemption if you can prove an existing business relationship (EBR). It’s not quite that simple, of course, as there remain technical arguments about the definitions of such critical terms as facsimile machine, transmit, email and regular telephone line, to name a few.

If a plaintiff can prove the transmission of a single unsolicited fax, the prescribed penalty is $500. If the violation can be proved to be willful, the penalty is trebled to $1,500. You may think that $500 or even $1,500 is trivial. After all, that’s the sort of issue that a really irate business person takes to small claims court, which is exactly where Senator Hollings, sponsor of the TCPA in the House of Representatives, says the Congress intended these things to be resolved. But if you multiply those penalties by thousands, the numbers get real big and the matter becomes very serious, indeed. That’s what happens if a law firm that specializes in suing businesses for huge recoveries prevails in a class action suit. Defending yourself can be a very expensive proposition and winning your case can be tough.
The scenario may go something like this. A fax broadcaster (i.e., fax blaster) approaches you with the idea of a $200 advertising campaign comprising faxes to 5,000 businesses of a certain size and SIC in the immediate ZIP code or area code. The fax blaster represents that it will select the fax recipients from a commercially available list of companies who have indicated their willingness to receive unsolicited advertisements. That sounds like a real bargain, so you, as the business owner or manager, agree and collaborate with the fax blaster to customize a simple ad template, offering a discounted dental exam, free insurance evaluation or something of the sort. Some of the recipients don’t appreciate the unsolicited fax. One actually files a claim in small claims court or contacts an attorney, who files a claim on his behalf, subpoenas the transmitting fax logs, notes the fact that there were as many as 5,000 other faxes involved and seeks class action status on behalf of the one active and 5,000 or so passive plaintiffs.
The fax broadcaster is no longer in business and nowhere to be found. That leaves you, the advertiser, holding the bag, i.e., separately liable. If my math is correct, the exposure is in the range of $2,500,000 or $7,500,000 if the violations are proved to be willful. Note: Such cases often involve thousands of faxes, thousands of passive plaintiffs across dozens of jurisdictions (Remember that we’re talking federal law here, but there are overlapping state laws that can increase your exposure, affect the statute of limitations, etc.) and millions of dollars. If your ad happened to be one of a dozen on a page, multiply the aggregate risk times a factor of 12. A business liability insurance policy may cover some of that, but contemporary policies typically exclude TCPA matters. 
These cases rarely go to trial but rather are settled out of court and the records sealed to mask the strategies and settlement amounts. In any case, so to speak, the class action attorneys at the firm of Rumpelstiltskin LLP can spin 1 junk fax into bars of gold for themselves and pigs of lead for the unsuspecting business-to-business advertiser. 

Note: if the fax logs contain evidence of other clients of the same fax broadcaster, you may have lots of company, as if that were to bring you any solace.

There are preventions and defenses, of course. Perhaps the best advice is to scrutinize your fax marketing practices. Avoid faxing anything at all to any company or person with whom you do not have a provable existing business relationship (EBR) or permission, be sure to include an opt-out provision and maintain the EBR proof for at least 4 years, which is the TCPA statute of limitations. 

All unsolicited faxes must include a very specifically worded opt-out provision. The corollary here is to avoid using a third-party fax broadcaster—unless the company is absolutely rock solid ethically, operationally and financially. Also, avoid using a publicly available list of fax numbers. Avoidance is the operative word.
There also are a variety of defenses that can be more or less successful, depending on the specifics of the case, the jurisdiction (state vs. federal) in which it is filed, and the skill and experience of the attorneys for the plaintiffs and defense. The attorneys representing the plaintiffs often are highly skilled and experienced in TCPA class action litigation. But there also are excellent attorneys who have successfully defeated class action junk fax claims and/or mitigated plaintiffs’ damage claims. Attorneys for both the plaintiffs and the defendant typically engage an expert witness, a role that I sometimes play—for the defense.--------------

Disclaimer: Ray Horak is a respected author and consultant and is a Technology Editor. He provides litigation support services as a consulting and testifying expert across a wide range of telecom matters, including the TCPA. He is not an attorney and does not offer legal advice. The legal information provided herein is, at best, of a general nature and cannot substitute for the advice of a competent, licensed professional with specialized knowledge who can apply it to the particular circumstances of your case. Please contact a local bar association, law society or similar organization in your jurisdiction to obtain a referral to a competent, licensed attorney.
The original version of this article initially appeared in the January 2010 issue of Telecom Reseller, The Newspaper for Telecom Networks, for which Ray is the Technology Editor.

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