The answer is no.
The question: Does the Czar ever get tired of being right?
No. No I don’t.
The other question: Can you obtain TCPA permissible express written consent via a disclosure read on a recorded call?
No. No you cannot.
The reason? The underlying agreement the consumer is accepting must be in the form of a written disclosure. Period. Full stop.
The signature can be captured orally. But the agreement must be in writing.
This seems straightforward–but it is actually really tough to glean from the regs– and many lawyers (some pretty good ones) have been wrong about this.
It has lead to a massive state of confusion in the lead gen industry with many companies swearing they can do what they simply cannot do.
And with the FCC’s new one-to-one rules coming into place (and R.E.A.C.H. Standards v. 2.0 out in July) clarity on this subject is absolutely critical. And yet there was –oddly–very little case law on this subject.
Enter the federal district court in Maryland.
In a new and very thoughtful decision, the court in Bradley v. Dentalplans.com, 2024 WL 2865075 (D. Md. June 6, 2024) walks through the applicable regs–which the court calls “complex” four different times–and arrives at the unsurprising conclusion that the Czar was right.
🙂
Here’s the background:
DentalPlans operates a “direct-to-consumer marketplace” that sells “dental savings plans” that allow customers to receive discounts on dental treatments. At least one of these dental savings plans is provided by Cigna.
Plaintiff placed a call to DentalPlans in November 2018, intending to sign up for a dental savings plan. The representative to whom Plaintiff spoke confirmed Plaintiff’s phone number and then asked Plaintiff if she consented to DentalPlans “contact[ing] [her] with an automatic dialing system or a prerecorded message.”
The representative to whom Plaintiff spoke during this initial sign-up process utilized a sales script during the call. The script calls for DentalPlans’s agents to (1) “collect[ ] the consumer’s name and telephone number,”; then (2) ask if the caller would “like to receive plan updates and promotions via text message”; before (3) asking for the caller’s consent to “contact [them] using an[ ] automated telephonic dialing system and/or prerecorded message”; and finally, (4) informing the caller that they “are not required to agree as a condition of purchasing any products and or services.” This script is used by DentalPlans for all incoming calls from non-customers, though the actual conversations vary naturally depending on the caller’s response.
Plaintiff agreed to receive the calls as described by the representative. Plaintiff proceeded to successfully sign up for a Cigna dental discount plan through DentalPlans during the phone call.
After the plan expired DentalPlans called the consumer using prerecorded calls to try to “winback” the consumer. Plaintiff sued under the TCPA for the calls arguing she did not consent.
So there is your scenario. Pristene and perfect.
The TCPA’s required PEWC language is all in the script. But the script was read over the phone in a recorded call. Is it valid consent to permit DentalPlans to make the calls it later made?
Nope.
The court goes through a very thorough and lengthy analysis that I won’t recite because its dull and, with love, you probably wouldn’t get it anyway. It is a rather complex legal analysis but the court’s final conclusion is simple and CRITICAL for everyone to understand:
“[T]he required written disclosures outlined in § 64.1200(f)(9)(i) of the TCPA cannot be provided via voice recording. Because these disclosures were not adequately provided, the voice recording cannot constitute a valid written signature.”
The end.
The Czar was right. Other lawyers were wrong.
Again.
Tell ’em Johnny:
Nobody is as smart as the guy…. and I’m the guy….
It gets worse for DentalPlans, of course.
After doing what they ought not do, they did what they probably shouldn’t have done and raise THE critical merits issue in the case before certification. That, of course, lead to an easy certification decision in the Plaintiff’s favor:
The primary issue in this case that might require individual analysis is whether the conversations each individual member of the class had with a DentalPlans representative contained sufficient language to give rise to a “clear and conspicuous” explanation of the nature of the prerecorded calls as required for prior express written consent.
Yeah…. that’s a common issue folks. And it is the primary issue. And DentalPlans lost it. So now everyone in the class knows they won a massively important issue. One-way intervention problems everywhere… but too late! More importantly, the class was certified– 57,240 members who received prerecorded winbacks after signing up over the phone.
My goodness.
Plaintiff received 10 calls. Assuming all the other class members received the same number there are 572,400 calls at issue here. That’s MINIMUM damages of $286,200,000.00.
All because they obtained oral recorded consent.
Brutal. Absolutely brutal.
But I am glad all of this happened because now I can–once again–say I was right, and also because we now have a clear rule on an issue of wide impact and at a VERY important time, which is arguably more important.
So repeat after me:
- You cannot obtain TCPA-valid express written consent orally from a consumer during an inbound call.
- You cannot obtain TCPA-valid express written consent orally from a consumer during an inbound call.
- You cannot obtain TCPA-valid express written consent orally from a consumer during an inbound call.
- You cannot obtain TCPA-valid express written consent orally from a consumer during an inbound call.
- You cannot obtain TCPA-valid express written consent orally from a consumer during an inbound call.
But there are ways to do it legally. You can use the transactional message exception (that I invented) to send an SMS message containing the required disclosures. You can have the consumer view terms on a website while “signing” the agreement. You can send snail mail. You can drive to an ap. Lots of things can be done—in theory, and with much precaution. But you need a REALLY good lawyer to help you implement these processes in a manner that will pass muster. (DO NOT try to set this up without legal counsel. I am telling you, big mistake. A lot of fine lines here.)
So now that you’ve been reminded of just how important it is to pay attention to pretty much every syllable I speak, you might want to sign up for the Law Conference of Champions where we will be giving you about 8 hours of stuff you definitely need to know about the TCPA, mini-TCPAs, data privacy, AI, and other critical developments in the marketing and lead generations space:
Or, you know, be stubborn and don’t come.
Chat soon. 🙂
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Hail to the Czar! He is right on the money once again. I wish more telemarketers would heed the sage wisdom that the Czar shares with them. Maybe, then, my telephone would be blessedly silent… for more than 15 minutes. But, alas, they do not listen, and that means some attorney, somewhere, is going to take money from that telemarketer (or, worse, the seller that the telemarketer was hawking for) to defend them because they failed to do what the Czar warned everyone (on a pro bono basis, no less!) that they should not do.
Almighty Czar, would you also provide some of your sage clarification. The DentalPlans.com case was based upon obtaining consent during an inbound call initiated by the plaintiff. Turn it around. Can a telemarketer obtain prior express written consent for recorded message calls during an outbound call to a consumer whose telephone number is on the National Do Not Call Registry?
What if after getting the oral TCPA consent, the caller says, to confirm your consent to receive future telemarketing calls, please key in the last four digits of your phone number.” We used to use a variation of this method when we upsold consumers on subscription programs on inbound order calls. I think with this extra step, this would be valid under the e-Sign act and would be valid PEWC.
under the TCPA.
This seems like a non-binding district court decision that stands against 1,000 years of common law relating to verbal agreement, but reasonable on its face thanks to the FCC’s poor use of the word “written”. I can understand if the court were to require the “agreement” be sent in writing after the fact (though that is legislating from the bench, we’re in an era of judicial takeover not seen since Marbury v. Madison, with ignoring stare decisis being above Holmes-levels, so no surprise).
If this was nationally binding, most phone-derived leads/consents produced and used since TCPA was enacted would be invalid and subject to fines amounting to potentially TRILLIONS if enforced and would put many businesses, from fortune 500’s to mom-and-pop’s, into bankruptcy.
Maybe a few weeks ago, the FCC could respond and clarify, but thanks to no more Chevron, even that is out. Maybe an appeal, roll the dice on a business friendly higher court? Or maybe someone can fly some SCOTUS members to belize in exchange for them granting cert and overturning this (I’m kidding, but that is clearly how our judiciary works).