NEW RECORD-KEEPING REQUIREMENTS?: Why an Overlooked Portion of the FCC’s New Ruling May Be Among its Most Impactful

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Editor’s Note: This is the fifth in a series of articles from TCPAWorld.com addressing the impact of the FCC’s new ruling on express consent. For a copy of the ruling click here. For additional information see here.

So the FCC’s new ruling is already creating headaches and it hasn’t even been officially adopted yet.

While I’ve already addressed the impact on small businesses and third-party concerns there is still tons to unpackage here.

Consider this: the FCC seems to be imposing a wholly new record keeping requirement–and it is one that should make third-party attestation software like Jornaya and TrustedForm very important in the future (even as CIPA issues need to be kept in mind.)

In the current environment a lead buyer may purchase a lead and then make outbound calls to the consumer who supplied consent. The lead will include data from the lead form but it may or may not include the leadform itself. That is, some leads will include tokens from third-party attestation services, and some will not. And even as to those that do those tokens may or may not be “claimed” by the caller before the call is placed.

This is generally ok. So long as the lead form data can be obtained from the lead source or third-party attestation software provider at the time a lawsuit is filed the caller should have a steady defense to any ensuing TCPA claim. (At least where the webform complies with the law.)

The FCC’s new ruling seems to destroy that practice, along with so many others.

Specifically, the ruling states:

41. Burden of Proof for Valid Consent. We take this opportunity to reiterate that the burden
is on the texter or caller to prove that they have consent that satisfies the TCPA and our rules.92 They may
not, for example, rely on comparison websites or other types of lead generators to retain proof of consent
for calls the seller makes. And, in all cases, the consent must be from the consumer. “Fake leads” that
fabricate consumer consent do not satisfy the TCPA or our rules.

The focus on fake leads in this paragraph is interesting but the real core is the bolded portion above. The FCC just found directly that the caller cannot rely on the lead generator to retain proof of consent for them. Rather, it seems, the caller must take physical possession of leadform cosent records before calls are made.

Crazy, right?

So this ruling begs a number of questions.

First, why?

As long as a record of consent exists it does not seem to matter to the consumer who is holding the record. And courts certainly do not care so long as the record can be authenticated. Why the FCC has decided to turn this issue on its head is confusing.

Second, can the FCC do this?

Unclear. This provision is not built into the CFR edit as part of the proposed rule. So it seems to be some sort of declaratory ruling. But what provision of the TCPA is the FCC interpreting here? And what is the factual underpinning for this finding?

Third, is this provision enforceable in court–and if so, how?

At the Summit we were discussing whether this provision would operate as some sort of evidentiary prohibition–like the court cannot admit evidence not obtained by the caller before the call was made.  Seems nuts but also seems to be the suggestion. Perhaps it simply operates to prevent callers from issuing subpoenas in litigation. Unclear. but no matter what it is another headache for TCPA defendants relying on third-party consent records.

Yet another issue to keep in mind here.

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Published by Eric J. Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

2 Comments

  1. “The FCC just found directly that the caller cannot rely on the lead generator to retain proof of consent for them. Rather, it seems, the caller must take physical possession of lead form consent records before calls are made.

    Crazy, right?”

    I disagree.

    The burden is on the lead seller, as they have the actual consent (well excluding the 45+% of fake/fraud leads you’ve documented in previous posts).

    This will actually protect the callers, and they’ll have the needed proof as a matter of the transaction. The ONLY ones actually hurt will be those selling crap leads since they won’t have legit consent – oh wait, wasn’t that something REACH was also trying to accomplish (cleaning up the industry?)

    WIN-WIN

    Reply

    1. What about the first amendment? Why do we need all these rules in the first place? To protect our privacy? Do you truly believe that? Small business won’t be able to compete in the marketplace. Large corporations will be burdened by spurious lawsuits. The costs will be passed on to the consumer. The only people that win will be the attorneys.

      Reply

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