FCC Proposes Rule That Would Severely Impact Text Messaging and Result in BIG Lead Generation Implications

Lead generators beware.  The FTC has issued a Notice of Proposed Rulemaking that would turn the lead generation industry on its head.

Amongst numerous items currently on the FCC’s agenda, there is discussion on closing the “lead generator” loophole.

The FCC Chairwoman has proposed a new rule that would block unlawful robotexts.  Read more, here.

The FCC first issued a Report and Order requiring mobile wireless providers to block text messages from numbers on a reasonable Do Not Originate list, which includes numbers that purport to be from invalid, unallocated or unused North American Numbering Plan numbers, and numbers for which the subscriber to the number has requested that texts purporting to originate from that number be blocked.  The FCC already requires similar blocking of voice calls by gateway providers.

The Report and Order would also ensure that any erroneous text blocking can be reported to the provider doing the blocking by requiring mobile wireless providers to maintain a single point of contact for texters to report erroneously blocked texts. This single point of contact is already required for voice call blocking.

Even more significant for lead generators is that the FCC has issued a NPRM that would require carriers to “investigate and potentially block texts from a sender after they are on notice from the Commission that the sender is transmitting suspected illegal texts…”

Additionally, the FCC has proposed an extension of DNC protections to text messages.  Historically, the FCC has failed to state that SMS text messages are subject to do-not-call protection.

If that weren’t enough, according to the FCC:

“We propose to ban the practice of obtaining a single consumer consent as grounds for delivering calls and text messages from multiple marketers on subjects beyond the scope of the original consent. In an illustration of the issue, Company A describes a website that purports to enable consumers to comparison shop for insurance. The website sought consumer consent for calls and texts from insurance companies and other various entities, including Company A’s  ‘partner companies.’ The ‘partner companies’ were listed in a hyperlink on the web page (i.e., they were not displayed on the website without clicking on the link) and the list of ‘partner companies’ included both insurance companies and other entities that did not appear to be related to insurance.”

Public Knowledge, a non-profit Washington, D.C.-based public interest group involved in the fields of intellectual property law, competition and choice in the digital marketplace, argues that lead generators and data brokers use hyperlinked lists to harvest consumer telephone numbers and consent agreements on a website and pass that information to telemarketers and scam callers.  Commenters also provide an example of another insurance company website that has 8,423 entities on the hyperlinked page.  The telemarketer that obtains the consumer’s contact information from the lead generator may believe that it has the consumer’s prior express consent, but, commenters argue, the consumer has not consented to the particular caller or callers, which may be listed as “partner companies” in these arrangements.

The FCC seeks comment on amending TCPA consent requirements to require that such consent be considered granted only to callers logically and topically associated with the website that solicits consent and whose names are clearly disclosed on the same web page.

The FCC has not addressed this aspect of consent in the past.

The FCC seeks comment on whether its NPRM better protects consumers from receiving large numbers of calls and texts they do not wish to receive when they visit websites such as comparison shopping websites.  The Commission states that consumers may find comparison shopping websites helpful, but asks how it can ensure that they can consent to obtain further information from the website without receiving numerous calls and texts from unrelated companies.

It invites commenters to discuss whether its NPRM would limit the value of comparison-shopping websites to consumers.  It asks whether there are alternatives to its proposal that would better protect consumers from the harms identified.

Importantly, the FCC also seeks comment on Public Knowledge’s request that prior express consent to receive calls or texts must be made directly to one entity at a time.

More broadly, the FCC seeks comment on the extent of the problem, its proposed rule and whether the proposed rule will clarify consent and help to eliminate unwanted and illegal text messages and calls.  “Are there different or additional limitations on multi-party consent we should consider?”

This attempt to limit the sale of consents obtained only is huge.  But not surprising.  For example, consider the recent FCC ruling on lead generation “consent farms” to capture consent for telemarketing purposes.

The NPRM is also consistent with the FTC’s expectation that lead generators will only utilize consumer data for legitimate purposes, those reasonably anticipated by consumers.  The FCC’s attempt to limit telemarketing efforts to callers clearly and conspicuously disclosed to consumers, and that are related to the product/service (vertical specific) associated on the applicable website was predictable.

This was a matter of time.  And it is a legitimate threat to the lead generation industry.

For more information on the FCC’s NPRM and lead generation best practices, consult with an experience FTC defense attorney.

Information on the Open Commission Meeting Webcast on March 16, 2023 can be found, here.

Richard B. Newman is an digital advertising and telemarketing compliance attorney at Hinch Newman LLP.  Follow FTC defense lawyer on Twitter.

Informational purposes only. Not legal advice. May be considered attorney advertising.