March 27, 2020
Authored by: BCLP, Daniel Rockey and Thomas Kinzinger
Many businesses, including retailers, rely on inbound lead generators to identify prospective customers for telephone or text-based direct marketing campaigns. Sourcing inbound leads from a variety of providers allows firms to tap into market segments that might otherwise be unavailable to them and improve conversion rates on their marketing spend. But outsourcing lead gen to downstream providers also carries risk, as it is not uncommon for the original source of the lead to be several layers removed, making it difficult to verify the quality of the leads or to ensure that the proper consents were obtained. Given the daily deluge of class action lawsuits brought under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (”TCPA”) by industrious plaintiff’s lawyers, it is only a matter of time before your company comes into their crosshairs. How can you protect your company?
The TCPA prohibits calls or texts to a cellular telephone using an automated telephone dialing system (“ATDS”) or prerecorded voice, or calls to a landline using a prerecorded voice, without the express consent of the called party (or contrary to a do-not-call listing). 47 U.S.C. § 227; 47 C.F.R. § 64.1200. Violators are subject to $500 in statutory damages for each call or text, or $1,500 for knowing violations, thus making TCPA class actions an irresistible enticement to the plaintiff’s bar. Although liability under the TCPA generally falls upon the entity that generated the call or text, the courts have held that sellers can be vicariously liable for the actions