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UNSOLICITED COMMERCIAL FAXES
STATUS
On July 9, 2005, President Bush
sign into law the "Junk Fax Prevention Act of 2005,"
P.L.109-021.
On July 3, 2003,
the Federal
Communications Commission (FCC) issued amendments to the
Telephone and Consumer Protection Act of 1991 (TCPA). The
amendments would have made substantial changes to the rules
regarding unsolicited faxes. Under the proposed rules, the
FCC would have required express approval with a signature to
receive faxes. Under prior rules, if an existing business
relationship existed, express permission was not required.
The FCC had also singled out trade association membership
lists as explicitly not constituting an existing business
relationship. The law signed by the President reverses the
FCC action.
On December 9, 2005, the FCC
issued a notice it was seeking comments on various aspects of
the new law, in particular whether there should be limits on
the duration of an established business relationship. It
also delayed the effective date of the rules technically still
pending until April 5, 2006, until it can address some of the
rulemaking issues generated by the new law.
ANALYSIS
The TCPA prohibits the use of
any telephone facsimile machine, computer, or other device to
send an "unsolicited advertisement" to a telephone facsimile
machine. An unsolicited advertisement is defined as "any
material advertising the commercial availability or quality of
any property, goods, or services which is transmitted to any
person without that person's prior express invitation or
permission." The FCC was given the responsibility to enforce
the law.
In enforcing the law, the FCC
allowed that facsimile transmission from persons or entities
that have an established business relationship (EBR) with the
recipient could be deemed to be invited or permitted by the
recipient. The term "established business relationship" means
a prior or existing relationship formed by a voluntary two-way
communication between a person or entity and the potential
recipient of the facsimile with or without an exchange of
consideration, on the basis of an inquiry, application,
purchase, or transaction by the potential recipient regarding
products or services offered by such person or entity, which
relationship has not been previously terminated by either
party.
NEW RULE
The FCC has determined that the
TCPA requires a person or entity to obtain the prior express
invitation or permission of the recipient before transmitting
an unsolicited fax advertisement. This express invitation or
permission must be in writing and include the recipient's
signature. The recipient must clearly indicate that he or she
consents to receiving such faxed advertisements from the
company to which permission is given, and provide the
individual or business's fax number to which faxes may be
sent. The FCC also proposed a change to the EBR definition to
require current contact. The EBR would now have to be based
on the potential facsimile recipient's purchase or transaction
with the entity within the eighteen (18) months immediately
preceding the date of the facsimile or on the basis of the
potential recipient's inquiry or application regarding
products or services offered by the entity within the three
months immediately preceding the date of the call, providing
the relationship has not been previously terminated by either
party. However, as of the effective date of these rules, the
FCC said the EBR would no longer be sufficient to show that an
individual or business has given their express permission to
receive unsolicited facsimile advertisements.
Advertisers may obtain consent
for their faxes through such means as direct mail, websites,
and face-to-face interaction with customers. Under the new
rules, the permission to send fax advertisements must be
provided in writing, include the recipient's signature and
facsimile number, and cannot be in the form of a "negative
option." For example, a company that requests a fax number on
an application form could include a clear statement indicating
that by providing such fax number the individual or business
agrees to receive facsimile advertisements from that company.
Such statement, if accompanied by the recipient's signature,
will constitute the necessary prior express permission to send
facsimile advertisements to that individual or business.
The FCC believes that even
small businesses may easily obtain permission from existing
customers who agree to receive faxed advertising, when
customers patronize their stores or provide their contact
information. The FCC believes that given the cost shifting
and interference caused by unsolicited faxes, the interest in
protecting those who would otherwise be forced to bear the
burdens of unwanted faxes outweighs the interests of companies
that wish to advertise via fax.
LEGISLATION
In 2003, the FCC rule decided to eliminate the EBR exemption, thus requiring all businesses to have prior
written consent from anyone to whom they wanted to send a
business-related fax. This new legislation, will reverse that
FCC rule. However, the new law puts in place some
restrictions for senders as well as creating an opt-out
mechanism for recipients.
The sender must obtain the
number of the telephone facsimile machine through the
voluntary communication of such number, within the context of
such established business relationship, from the recipient of
the unsolicited advertisement, or a directory, advertisement,
or site on the Internet to which the recipient voluntarily
agreed to make available its facsimile number for public
distribution.
All unsolicited advertisement
faxes must have an opt-out notice.
The notice must be clear and
conspicuous and on the first page of the unsolicited
advertisement.
The notice must state that the
recipient may make a request to the sender of the unsolicited
advertisement not to send any future unsolicited
advertisements to a telephone facsimile machine or machines
and that failure to comply, within the shortest reasonable
time, (the FCC is charged with the responsibility of
establishing what is a reasonable time) with such a request is
unlawful.
The notice must include the
legal requirements for how the recipient must make the opt-out
request. Those requirements are that the request identifies
the telephone number or numbers of the facsimile machine or
machines to which the request relates; the request is made to
the telephone or facsimile number of the sender of such an
unsolicited advertisement and the person making the request
has not, subsequent to such request, provided express
invitation or permission to the sender, in writing or
otherwise, to send such advertisements to such person at such
telephone facsimile machine.
The notice must include a
domestic contact telephone and facsimile machine number for
the recipient to transmit such a request to the sender and a
cost-free mechanism for a recipient to transmit a request.
The telephone and facsimile machine numbers and the cost-free
mechanism must permit an individual or business to make such a
request at any time on any day of the week.
Finally, the opt-out notice
must comply with the other requirements of current law, which
requires that any unsolicited fax being sent contain in the
margins at the top or bottom of each page the date and time
the fax was sent, the identification of the sender of the
message, and the telephone number of the sending machine.
Current fax lists are
grandfathered from the rules regarding how and from where the
sender obtained the fax number. You can send an unsolicited
advertisement, which is sent based on an established business
relationship with the recipient that was in existence before
the date of enactment of the Junk Fax Prevention Act of 2005,
if you possessed the facsimile machine number of the recipient
before the date of enactment. The fax, however, must include
the opt-out notice.
Congress has given the FCC
discretion to decide whether to impose time limitations on how
long a sender can rely on the initial contact that created the
established business relationship.
With respect to providing the
cost free method of opting out, Congress has granted the FCC
authority to exempt classes of small businesses from that
requirement if it decides the cost of providing a cost-free
mechanism is unduly burdensome.
OUTLOOK
On April 5, 2006, the
FCC adopted the new rules, which codified an “established
business relationship” exemption to the general prohibition on
sending unsolicited fax advertisements.
I42100807
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