Understanding TCPA: Maximizing Consumer Outreach & Mitigating Risk


Executive Overview:

In May 2013, Papa John’s International, Inc. agreed to pay $16.5 million in damages to resolve a nationwide class action lawsuit alleging that it unlawfully advertised its pizzas by sending unwanted SMS text messages to customers in violation of the Telephone Consumer Protection Act (TCPA)1. Although this federal law has been in place since 1991, new rules became effective on October 16, 2013 that prohibit companies from contacting consumers with telemarketing phone calls or text messages without their prior express written consent.

Papa John’s is not alone. TCPA violations have become the target of choice for class action litigation. The number of suits increased 65% in the past year2 and is expected to continue to grow. Two things account for this: first, consumers have a private right of action to bring a lawsuit in response to TCPA violations, and second, you don’t need to show any injury to recover. With statutory damages between $500 and $1,500 per infraction, the cost mounts up quickly. For a company that’s distributing 1,000 calls, the damages can quickly add up to $500,000 and reach at least $5 million for 10,000 calls3. The Federal Communications Commission can also bring an enforcement action, imposing civil penalties of up to $16,000 per violation.

Enterprises are vulnerable to costly investigations and stiff civil penalties and face expensive class action litigation with the threat of multi-million dollar payouts and negative publicity. In addition to the new regulations, inconsistent court interpretations of TCPA are creating confusion for many companies4 leaving many questions as to what they need to do to mitigate their risks.

In this paper, we will discuss the new TCPA regulations and the associated risks that can result in fines and time-consuming litigation for TCPA violations. We will also explore the impact of the new regulations on your outbound communication strategies and offer recommendations and best practices that can help mitigate TCPA risk. Lastly, we will examine the operational and business value of phone data attributes including phone type, phone ownership, accurate consumer data, and how these capabilities extend beyond TCPA compliance.

Contending with Dynamic TCPA Regulations

TCPA regulations continue to change dynamically. As new regulations are promulgated under the Act by the Federal Communications Commission (FCC), the stakes are higher than ever for creditors, collection agencies, marketers, and other organizations that conduct outbound communications to consumers. TCPA regulations prohibit the use of auto- dialers and pre-recorded messaging to wireless devices, healthcare facilities, or any number where the called party pays without that party’s prior express consent5. Companies that overlook TCPA compliance rules – or don’t understand how broadly the term “auto-dialers” has been applied to outbound communications systems – are placing their organizations in jeopardy.

“It’s absolutely critical for business leaders to understand how the legal interpretations of TCPA are changing and the steps they need to take to mitigate compliance risk now,” says Becky Burr, Deputy General Counsel and Chief Privacy Officer at Neustar6. For example, companies that use auto- dialers need to know whether a phone number is a landline or associated with a mobile device. If it is a mobile number, each company needs to verify that they have acquired prior written consent to communicate using automated technology AND that the person who gave consent still owns the number.

“It can result in a huge pay-out if you get it wrong,” says Burr. Indeed, lawyers are aggressively pursuing class action lawsuits against companies that violate the law7.

Because the requirements of TCPA depend on phone type – landline versus wireless – the first step is knowing what kind of number you are calling. In this day of instant porting from landline to wireless (and back again) and re-assignment of wireless numbers, this is harder than it sounds. The FCC, charged with implementing TCPA, requires that companies who are telemarketing must have a consumer’s prior express written consent to contact them on their wireless devices using automated dialing technology, or they can be held in violation of TCPA8 9. This new consent amendment requires a business to obtain a signed written agreement by the person receiving the call or text including a clear and conspicuous disclosure that specifically authorizes the company to send telemarketing communications using an automatic telephone dialing system or an artificial or prerecorded voice message. Determining whether the phone number is assigned to a wireless or a landline device and confirming the consumer’s consent to receive auto- dialed calls to a wireless number are critical requirements creditors, collection agencies, contact centers, and companies that send auto-dialed or pre-recorded marketing communications to wireless numbers or pre-recorded marketing communications to landlines.

But that’s not all you have to do. Courts have ruled that telemarketers must have the consent of the current wireless subscriber. So, if the individual who previously gave you consent got a new number, and the carrier re-assigned the number you are dialing to someone else, you will not meet the standard. In order to further mitigate risk associated with TCPA rules and avoid costly litigation fees, organizations that conduct consumer outreach must also authenticate that each mobile number in use still belongs to the person who gave consent. This is a huge challenge since phone data changes every day as phone numbers can be reassigned from one subscriber to another. Now that one out of every three households in the U.S. are wireless only10, this dramatically increases the odds for falling out of compliance. Contacting the wrong person on their mobile device – even inadvertently – is a violation under the regulation and subject to regulatory fines and damage awards.

There is a lot to learn when it comes to TCPA, especially as the legal and regulatory environment surrounding the law continues to change. The good news is that companies can take several steps to proactively help mitigate their TCPA risks. For instance, companies can verify the type of phones in their consumer contact lists and the identity of the current subscriber assigned to each phone number. In addition, accessing highly accurate phone data enables creditors, collection agencies, outbound call center teams, marketers, and other companies to maximize their outbound communications while driving operational efficiencies.

Even beyond TCPA, it is essential for executives to verify each mobile phone number and the phone ownership. By doing so, marketers can ensure that they are reaching the right customers with the right messaging. As a result, organizations engaged in outbound communications can dramatically improve contact rates as well as conversion and collection rates.

Understanding and Acting on the Dynamic Nature of Phone Data

Knowing where to start with TCPA compliance begins with developing a firm understanding of what the law is, how legal interpretations of the rules are constantly changing, and what tools and techniques are available for creditors, collection agencies and marketers to comply. Most U.S. courts have ruled that outbound calls or text messages made to mobile phones using an automated dialer system or a pre-recorded voice system violate TCPA if the called party did not provide prior express consent to receive such communications. However, individual courts have developed their own interpretations of the law that are adding to the confusion as to what constitutes compliance. For instance, the U.S. Court of Appeals for the Seventh Circuit ruled that faxes sent by an attorney that were nevertheless styled as newsletters constituted unsolicited advertisements under TCPA.11

Meanwhile, a Federal judge in the Southern District of Florida ruled that the fact that a consumer provided their cell phone number to a creditor is not sufficient evidence for providing prior express consent – even if the call does not involve telemarketing.12

In addition, in Soppet v. Enhanced Recovery Company LLC, the Seventh Circuit Court ruled that consent from a previous subscriber is inadequate, and companies need to confirm that the person who gave consent still owns the phone number.13

The TCPA regulations and rulings result in decision-makers’ need for a way to identify the phone type associated with the phone numbers in their databases. They also need a conservative yet effective way to confirm consent among their consumers and prospects. Finally, they need to verify that the person who gave consent still owns the phone number.

Gaining insights into mobile phone numbers is challenging because this data is often private, not public information. To make matters worse, as of December 2012, 35.8 percent of all U.S. households were wireless-only, according to CTIA – The Wireless Association14. In addition, more consumers are porting their landlines to mobile devices. With the near ubiquitous adoption of wireless phone numbers and the fact that more than 1 in 3 US households are wireless only, it is becoming critical to have a mobile data verification strategy.

Verifying phone ownership is also a major challenge. Millions of phone numbers are recycled to new users every year. In 2011, the FCC reported that almost 37 million phone numbers were reassigned to new users15. The average wireless customer switches carriers as soon as his or her two-year contract is up, according to a 2012 study by PricewaterhouseCoopers (PwC).16 Exacerbating the issue, the length of the average customer-carrier relationship has dropped from 59 months in 2010 to 48 months today, according to PwC. The number of consumers who are giving up their old phone numbers as they switch carriers has accelerated. This makes it increasingly difficult for companies that conduct outbound communications to confirm the accuracy of wireless phone data on their own.

Having access to accurate and up-to-date phone data is critical for mitigating TCPA compliance risk and avoiding massive legal bills and payouts. Accurate phone data can also offer companies benefits beyond those realized with TCPA compliance. In the next section of the paper, we will explore how reliable phone data can also enable companies to build a solid customer database, increase right-party contact rates, and enhance collection and conversion activities.

The Legal Repercussions of TCPA: 4 Case Studies

Many companies have struggled to comply with the Telephone Consumer Protection Act (TCPA) due to their failure to identify phone type, obtain the needed consent and verify ownership of the phone number. Consider the following high-profile cases:

  • In Soppet v. Enhanced Recovery Company LLC, the Seventh Circuit Court ruled that autodialing a mobile phone number that has been reassigned to a different consumer violates TCPA because the called person did not consent to be called17.
  • A Federal judge denied a motion filed by Coca Cola Co. to dismiss a class action complaint that accused the company of sending nationwide advertising text messages to consumers without their consent18.
  • In a recent ruling against Dell Financial Services, the Third Circuit Court of Appeals in Philadelphia held that consumers have the right to revoke their consent to receive robocalls on their cell phones at any time19.
  • A Jiffy Lube franchisee (Heartland Automotive Services, Inc.) agreed to pay $47 million in services and cash to settle a class action lawsuit. Plaintiffs argued the company violated TCPA by sending SMS text messages to 1.9 million consumers without their consent20. The court agreed, ruling that providing a cell phone on an invoice does not constitute consent by the consumer to receive marketing communications.

Leveraging Phone Data More Effectively

"Up to 20 percent of customer records are linked to the wrong mobile phone number21."

Neustar, Inc., Internal Study, July 7, 2013

One of the greatest continuing challenges facing creditors, collection agencies and marketers is the integrity of the customer data available to them. A 2013 Federal Trade Commission (FTC) study of 90 million consumer accounts with a face value of $143 billion found that collection agencies attempt to collect approximately one million dollars each year that consumers claim they do not owe.22 Moreover, according to the FTC study, collection agencies were only able to verify 51.3 percent of the debts that consumers disputed. The FTC report noted that the accuracy of the data obtained by collection agencies is often suspect as there is often very little supporting documentation provided to these agencies to verify the consumer’s contact information.

Collection agencies that are able to verify consumer phone numbers and link this information with a name and address and other identifiers such as additional phone numbers are better positioned to improve their collection rates and locate hard-to-find debtors.

Authenticating phone data can also enable marketers to assemble more accurate Customer Relationship Management (CRM) data that can be used to improve the performance of marketing campaigns and targeted offers. Industry research reveals that 2 percent of customer records in CRM systems become obsolete each month due to changing conditions (death, divorce, marriage, relocation).23 Meanwhile, duplicate customer records lead to inefficiencies and can decrease customer satisfaction for those who receive redundant messaging and offers. The ability to verify and maintain accurate customer data upfront and on an ongoing basis can lift conversion rates significantly.24

Getting Started

As the nation’s courts and regulators continue to change the TCPA regulations, companies need to develop effective risk mitigation strategies. They need the ability to verify their consumer phone records consistently and accurately. They also need procedures to capture consumer preferences about being contacted.

Neustar’s Verification for TCPA solution offers multiple benefits to companies initiating outbound communications. The beauty of Neustar’s verification solution is that it does more than just help companies mitigate TCPA compliance risk.

Here’s how it works: Each Neustar client submits a consumer’s name and phone number. Neustar then instantly identifies whether the phone number is a wireless or wireline. The solution further verifies whether the name and phone number go together or whether the phone now belongs to a different person. If the name and number go together, companies that have the consumer’s prior written consent can feel confident they are contacting the right person.

Only Neustar’s Verification for TCPA solution leverages the full power of Neustar’s unparalleled phone data repository. The solution provides users with the most accurate, comprehensive and up-to-date consumer and business data in the industry – updated every 15 minutes from over 250 sources, including the nation’s leading telecommunications service providers. “With access to more than 70 percent of all wireless and hard-to-find phone numbers supported by our proprietary linking logic, you can instantly and accurately verify consumer contact information,” says Xavier Riley, Vice President, Product Development at Neustar.

This is a critical distinction as consumer phone numbers contained in a company’s database are often out of date or inaccurate. Neustar’s data audit across credit and collections, marketing, and other various industries demonstrated that 20 percent of client and prospect phone numbers are no longer linked to the person who initially submitted the information.25

In addition, many companies are intent on obtaining clear, affirmative consent from consumers. While that is necessary, it is not sufficient. “You also need a methodology to know – at the time you make the call – whether you are calling a landline or a mobile number and whether a mobile number that is dialed still belongs to the person who provided consent,” says Burr.

When it comes to mitigating TCPA risks, the stakes are higher than ever. Developing a structured approach to address TCPA requirements using the right technology solutions will enable your organization to navigate the bumpy regulatory landscape while driving business and operational value. These benefits include achieving greater operational efficiencies, increasing right-party contact rates, and generating additional value from each lead.

TCPA Risk Mitigation: Best Practices:

  • Capturing Consent: Obtain and store prior written express consent from the consumer.
  • Determining Phone Type: Know if the phone is landline or wireless.
  • Verifying Phone Ownership: Verify that the person who gave consent still owns the phone.

Developing a structured approach to address TCPA requirements using the right technology solutions will enable your organization to navigate the bumpy regulatory landscape while driving business and operational value. These benefits include achieving greater operational efficiencies, increasing right-party contact rates, and generating additional value from each lead.


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2. Lunsford, Patrick (2013, September 27). FDCPA Lawsuits Continue Steady Decline as TCPA Suits Rise. www.insidearm.com

3. Sheppard Mullin (2013, June 11). New FCC Interpretation of “Express Consent” To Increase TCPA Class Action Liability. www.classactiondefensestrategy.com

4. Lueder, Michael C. (2013, August 23). More TCPA lawsuits coming: express consent can be revoked at any time. www.lexology.com

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6. 2013. Neustar Information Services Video. Avoiding Telephone Consumer Protection Act (TCPA) Traps. www.neustar.biz

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11. Johnson, Katie W. (2013, August 30). Seventh Circuit: Attorney’s Faxes Were Unsolicited Advertisements Under TCPA. www.bna.com

12. Schaffer, Scott (2013, July 1). Florida Judge Again Disregards FCC Interpretation of TCPA. www.lfirm.com

13. Anthony, David; Flynn, Virginia Bell (2012, May 31). Case Study: Soppett V. Enhanced Recovery. www.law360.com

14. CTIA.org. Wireless Quick Facts.

15. Abkowitz, Alyssa, Wrong Number? Blame Companies’ Recycling, The Wall Street Journal, December 1, 2011, http://online.wsj.com

16. Goldman, David (2012, April 4). Phone customers ditch their carriers faster than ever. www.money.cnn.com

17. Anthony, David; Flynn, Virginia Bell (2012, May 31). Case Study: Soppet V. Enhanced Recovery. www.law360.com.

18. Broady, Gavin (2013, May 23). Coca-Cola Can’t Flush TCPA Text Spam Action. www.law360.com

19. August 26, 2013. TCPA Attorney Sergei Lemberg Says Appellate Court Ruling Advances Consumer Protection from Unwanted Robocalls. www.consumerelectronicsnet.com

20. Balasubramani, Venkat (2012, March 17). Text Spam Class Action Against Jiffy Lube Moves Forward – In Re Jiffy Lube Int’l, Inc., Text Spam Litigation. www.blog.ericgoldman.org

21. Neustar, Inc., Internal Study, July 7, 2013.

22. Federal Trade Commission. January 2013. The Structure and Practices of the Debt Buying Industry. www.ftc.gov

23. BtoB Magazine. January 13, 2013. Study: Poor data quality plagues customer experience. www.btobonline.com

24. 2013. Neustar Information Services Literature. Neustar SecondApproach: Don’t Let Hot Prospects Go Cold. www.neustar.biz

25. NeuStar, Inc., Internal Study (July 7, 2013). www.neustar.biz