MUST READ: A $25k PER VIOLATION SUPER TCPA IS IN THE WORKS IN MICHIGAN–And it is BIGGER, BADDER (And BETTER WRITTEN) Than Any Other Robocall Statute to Date

Florida has its Mini TCPA, with all of its expansive robocall regulating glory.

Washington has its CEMA, which applies to text messages that a company merely encourages others to make.

But Michigan’s new proposed “Telephone Solicitation Act” puts them all to shame.

Indeed, this thing is an outright monster. Combining a more expansive robocall restriction than the TCPA, huge UDAAP elements of the TSR, and a remarkably unusual protection of “vulnerable numbers” that looks like Elder Abuse protections the Michigan TSA is the stuff of compliance nightmares.

And it has a MASSIVE private right of action allowing up to $1,000 a call PLUS attorney’s fees. Plus the AG can pursue suit for up to $25k per violation–and serve discovery demands on any party with information regarding a violation–pre suit!

But it puts them to shame in another way, as well. Pretty much every state bill to come to market previously has been a vague and shifting mess of provisions, most of which are unintelligible.

The Michigan TSA is different. Although it is comprehensive–again, it combines multiple bodies of law into a single statute–it is surprising elegant and easy to understand. I dare say, this thing is pretty well drafted–even if I disagree with it from a policy standpoint.

Here’s what you need to know about this HUGE new bill RIGHT NOW:

1. THE BILL WOULD OUTRIGHT BAN THE USE OF PRERECORDED CALLS TO MAKE MARKETING MESSAGES 

The Michigan TSA would outright ban the use of a recorded calls to make telephone solicitations.

2. A TELEPHONE SOLCITATION IS BROADLY DEFINED–BUT STILL EXCLUDES CALLS MADE WITH CONSENT OF A SUBSCRIBER

The term “telephone solicitation” in the Michigan TSA is broadly defined–but, mercifully, it is actually a pretty clear definition (unlike the ridiculous Florida and Oklahoma bills).

(o) “Telephone solicitation” means calls made:

(i) For the purpose of encouraging the recipient to purchase, rent, receive, or invest in goods or services or make a contribution to a charitable organization.

(ii) For the purpose of encouraging the recipient to provide personal information, including, but not limited to, identity, financial, or preferences information, to defraud or wrongfully obtain anything of value.

(iii) For the purpose of encouraging the recipient to accept or participate in any employment, whether temporary or permanent, contracting, investment, or other income opportunity, to defraud or wrongfully obtain anything of value.

(iv) For the purpose of encouraging the recipient to accept a prize promotion.

(v) For the purpose of encouraging the recipient or a member of the recipient’s family to avoid liability, legal or otherwise, to defraud or wrongfully obtain anything of value.

(vi) On behalf of a political organization.

Does NOT include:

(i) A telephone communication to a residential telephone subscriber with that subscriber’s express verifiable authorization.

(ii) A telephone communication to an existing customer of the person on whose behalf the telephone communication is made, unless the existing customer is a consumer who has requested to not receive telephone communications from or on behalf of that person under section 17(f).

(iii) A telephone communication made consistent with and not in violation of any federal or state law relating to debt collection.

(iv) A telephone communication to a business telephone number, unless the business has requested that it not receive telephone communications from or on behalf of that person under section 17(f).

3. THE MICHIGAN TSA REQUIRES “EXPRESS VERIFIABLE AUTHORIZATION” –NOT EXPRESS WRITTEN CONSENT 

One of the TSA’s most novel provision is its focus on something called “(h) “Express verifiable authorization.”

Unlike the FCC’s CFR rules–requiring the “Troutman Nine” of conspicuous express written consent–the Michigan TSA only requires that consent be “verifiable” as:

(i) A prior written authorization or confirmation.

(ii) A prior electronic authorization or confirmation.

(iii) A prior oral authorization recorded by the telephone solicitor.

(iv) A prior confirmation through an independent third party.

Case law will need to clean this up a bit but pretty obviously a lower standard than PEWC in my view.

4. THE MICHIGAN TSA BANS SOLICITATION CALLS TO NUMBERS ON THE DNC LIST– NO SURPRISE THERE

Under Section 5 of the TSA, a telephone solicitor shall not make a telephone solicitation to a residential telephone subscriber whose home or wireless telephone number is on the most current version of the do-not-call list. (Some charitable and political calls exempted depending on content of calls.)

5. BUT THE MICHIGAN TSA ALSO PROHIBITS “LEAD GENERATION” INVOVING NUMBERS ON THE DNC-WHICH IS A SURPRISE

In another fascinating provision, the TSA appears to prohibit any lead generation involving numbers on the national DNC.

The bill provides: “[a] person shall not include the telephone number of a residential telephone subscriber that is on the most current version of the do-not-call list in a lead generation.”

Read literally–and there is no other way to read it–numbers on the DNC can never be passed or sold as part of lead generation.

“Lead generation” is defined to mean the sourcing, sale, subscription, leasing, renting, distribution, purchase, wholesaling, or transfer of a list of telephone numbers utilized or intended to be utilized for telephone solicitations.

6. THE MICHIGAN TSA REQUIRES CERTAIN DISCLOSURES BY ALL MARKETERS

The TSA requires disclosure of:

  1. telephone solicitor’s true first and last name and the full name, address, and telephone number of the organization or other person on whose behalf the call was initiated.
  2. The telephone number provided must be answered during traditional business hours between 9 a.m. and 5 p.m. local time at the subscriber’s residence.

7. THE MICHIGAN TSA REQUIRES VALID DIDs BE USED FOR SOLICITATIONS AND NO CALLER ID BLOCKING

The TSA provides a marketer may not:

(a) Block, restrict, circumvent, or otherwise interfere with a subscriber’s caller identification service so that the telephone number of the telephone solicitor is not displayed properly on the caller identification service of the subscriber.

(b) Display, or cause to be displayed, a fictitious or misleading name or telephone number, or to otherwise misrepresent the location of origin of a telephone solicitation or the identity of the telephone solicitor, on a subscriber’s caller identification service.

(c) Use a third party to display, or cause to be displayed, a fictitious or misleading name or telephone number, or to otherwise misrepresent the location of origin of a telephone solicitation or the identity of the telephone solicitor, on a subscriber’s caller identification service.

(d) Use a telephone number associated with a direct inward dialing or direct dial-in system or use a telephone number otherwise purchased, leased, licensed, or rented from a person, for  any telephone solicitation that misrepresents the location of  origin of a telephone solicitation or the identity of the telephone solicitor, or otherwise violates this act.

8. THE TSA PROTECTS OLDER FOLKS FROM AUTOMATIC CALLS–AND IT INCLUDES A BROAD DEFINITION OF AUTOMATIC AKIN TO FLORIDA  

In another unusual provision, the Michigan TSA would ban ADAD calls to “vulnerable numbers.”

ADAD calls are those made using any device or system of devices that is used, whether alone or in conjunction with other equipment, for the purpose of automatically selecting or dialing telephone numbers.

Vulnerable Numbers include hospitals, emergency lines, and those belonging to folks 75 or older and those who have disabilities.

9. BUT THE TSA DOES NOT PROHIBIT THE USE OF AN AUTODIALER THE WAY FLORIDA AND OKLAHOMA DO

While the TSA contains a similar autodialer definition to Florida and Oklahoma–one focused on automatic selection or dialing of numbers–it does not wholesale ban the use of such dialers to make solicitations without consent.

Rather it bans only the use of dialers to make calls to numbers on the DNC or to vulnerable numbers. This is MUCH more likely to withstand constitutional scrutiny than the Florida bill.

11. THE TSA INCLUDES ELEMENTS OF THE TSR–INCLUDING CONTENT REQUIREMENTS FOR TELEPHONE CONTRACTS AND RULES PROHIBITING ABUSIVE AND FRUAUDLENT CONDUCT

The TSA contains a litany of rules for over-the-phone sales, and provides a 7 day return policy on all such sales. It also requires all contracts to contain, in bold, conspicuous type immediately preceding the signature the words “You are not obligated to pay any money unless you sign this contract and return it to the seller.”

More broadly a, contract made under a telephone solicitation is not  valid and enforceable against a consumer unless the contract complies with all of the rules in the TSA.

Like the TSR, the TSA also bans making false or misleading statement or misrepresentations in connection with telephone solicitations.

12. THE TSA ALSO INCLUDES TIME LIMITS BEYOND THOSE IN THE TCPA

Like Florida and Oklahoma, the TSA limits calls to 9 a.m. and 8 p.m. local time at the subscriber’s residence.

Unlike Florida and Oklahoma, however, the TSA clearly permits earlier or later calls with the consent of the subscriber.

13. A VIOLATION OF THE TCPA OR CFR AUTOMATIALLY VIOLATES THE MICHIGAN TSA

That means calls to Michigan that violate the TCPA will now carry a double penalty!

14. THE MICHIGAN AG’S OFFICE CAN SEEK $25K (or even $50K) PER VIOLATION!

The Michigan TSA would afford a massive penalty of $25k per violation and it authorizes the AG’s office to go after these fines.

If the activity involved “vulnerable” numbers the fine goes up to $50,000.00!!!

15. A PRIVATE RIGHT OF ACTION WITH MINIMUM DAMAGES OF $1K PER CALL (PUS ATTORNEYS FEES) IS ESTABLISHED–BUT THERE’S A TWIST

The Michigan TSA permits individuals to sue for a flat $1,000.00 per violation PLUS FEES.

However, unlike the TCPA, a person must actually have suffered “loss” as a result of the calls to sue.

It will be VERY interesting to see what qualifies as “loss” in this context–is annoyance enough, or is monetary loss (such as from being scammed) required?

16. FINALLY A BUNCH OF YOU CAN EXPECT TO RECEIVE SUBPOENAS AND INTERROGATORIES FROM THE MICHIGAN AG, EVEN IF YOU DIDN’T VIOLATE THE MICHIGAN TSA

In another interesting provision, the Michigan TSA would empower the AG to serve discovery demands on parties merely because they might have information about a violation of the TSA–even if they, themselves, are not a target of any investigation.

And this can be done PRE-SUIT. That means the AGs office can conduct numerous investigations simultaneously without ever launching a public proceeding.

The demands must be responded to UNDER OATH and depositions are permitted.

+++

At bottom this bill represents a massive effort by the Michigan legislature to take the lead on state-level telemarketing restrictions.

The Bill is thoughtful and comprehensive, and far better drafted than other state bills.

If it passes–remember, this is not yet law–I suspect it will serve as a more moderate model for other states to follow.

We will be keeping a very close eye on this one.

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3 Comments

  1. Thank you for keeping us posted about this. I am in Michigan – so this is of particular interest to me. The good news is that it seems there are only democrat sponsor/co-sponsors on the bill right now. I take this as a sign it is unlikely to move in a GOP controlled House and Senate. If House/Senate leadership was interested in moving this bill they would have vulnerable GOP members attach as co-sponsors to generate positive press for them when it passes. It seems to be a trend that if no GOP co-sponsors appear on a bill it will not move far along in the process. IMO we need to watch this bill carefully in the lame duck session (when many crazy Michigan laws tend to get approved) or if it is reintroduced next session with support of the majority party.

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