If you aren’t familiar with the TCPA, you should familiarize yourself with this important statute that is currently sparking a ton of litigation in the cannabis industry. The TCPA stands for the Telephone Consumer Protection Act – a statute that was passed in 1991 to fight the incessant “robocalls” that were plaguing consumers at the time. The TCPA provides, in relevant part:
It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States … to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States …
Although the relevant text above only refers to calls, the Federal Communications Commission and courts have agreed that the TCPA also applies to text messages. The term “automatic telephone dialing system” means “equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Confused as to what that really means? That’s exactly why these claims are rampant and wreaking havoc on nearly every major industry. That’s exactly why TCPA litigation becomes expensive, fast.
The stakes are also high. If a company has potentially violated the TCPA, it prescribes a penalty ranging from $500 – $1,500 for EACH violation of the statute. That’s each call, text message, etc. For example, say you want to do some quick promoting and you send out 1,000 promotional text messages to your best customers. If those text messages aren’t TCPA-compliant, you can get hit with a verdict that’s easily over $500,000 – and that doesn’t even include the cost of litigating! Damages under the TCPA are uncapped, and it hasn’t been uncommon for larger companies to be hit with verdicts in the millions of dollars in recent years.
Uncapped damages means that there unfortunately is also a growing group of both consumers and consumer attorneys who are looking to capitalize on these very claims. Some file complaints that have just enough basis to obtain a quick settlement – they know that smaller companies don’t have the bandwidth to really defend against these types of claims (especially because insurance policies usually have explicit TCPA exceptions!), so they figure they can make a “quick buck” with a two-week shakedown. This is just more reason to make sure you’re staying up to date with the latest TCPA news and your marketing efforts are staying compliant.
If you’d like advice or tips on how to stay compliant, we’re here to help. And, if you find yourself facing a demand letter or worse, a complaint, for allegedly violating the TCPA (that’s either valid or not), you should absolutely contact us to defend you.
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Author: Jihee Ahn